Weifu Hi-Tech (000581): 300-600 million US dollars repurchase incentive program governance improvement cardiotonics

The company’s total market value is less than 18 billion U.S. dollars, and the volume of monetary funds and wealth management products has reached 7 billion U.S. dollars. Except for the above-mentioned items, the ROE is maintained at 20%.

  Raise target price to 23 yuan (was 22).

88 yuan), maintaining the “overweight” level.

Considering the improvement of corporate governance by the incentive plan, which is conducive to the development of growth space, the EPS for 2019-2021 is raised to 2.

08/2.

30 (+0.

10) / 2.

55 (+0.

10) Yuan, referring to the valuation of comparable companies, giving the company 10 times PE in 2020, corresponding to a target price of 23 yuan.

US $ 3-6 million repurchase of shares is used to implement equity incentive plans, which significantly improves corporate governance.

As of the 2019 interim report, the total number of shares held by the company’s director and supervisor Gao is 10.

70,000 shares, corresponding to a market value of about 0.

The purchase amount of this equity incentive plan is 300,000 to 600 million yuan (accounting for 北京养生 approximately 25% -50% of the total cash dividend in 2018), corresponding to 12.5-25 million shares, and the interest binding is maximized.

Equity incentives accelerate the opening of the company’s growth space.

The growth space is aimed at the core factors of the company’s operations. The company’s joint venture with Bosch, Bosch Automotive, added a fuel cell business in April 2019. In August 2019, its chairman was KIRSCH CHRISTOPHWILHELM (formerly MAIER RUDOLF, focusingFor commercial vehicle injection systems).

It is expected that the equity incentive plan may involve the participation of executives of holding subsidiaries, which will accelerate the opening of growth space.

The company’s high-level dividends are highly sustainable, and it is estimated that the overall cash dividends for 2020/2021 will be 12.

8/13.

0ppm, corresponding to a dividend yield of 7.

2% / 7.

3%.

In 2017 and 2018, the scale of the company’s monetary funds and wealth management products reached 7 billion U.S. dollars, and a total of 12 cash dividends were invested.

1 ‰, corresponding to a dividend yield of more than 7%. It is expected that this incentive plan will significantly improve the company’s certainty of maintaining high dividends.

  The company’s total market value is less than 18 billion U.S. dollars, and the volume of monetary funds and wealth management products reaches 7 billion. After replacing the above projects, the ROE is maintained at 20% and the asset quality is excellent.

Risk reminder: The sales volume of the heavy truck industry is lower than expected, and the progress of hydrogen fuel cells is less than expected.