On the evening of March 4, JuneYao Health (605388), the first share of room temperature lactic acid bacteria, released a draft equity incentive. According to the announcement, the company intends to grant no more than 12 million stock options (about 2.79% of the total share capital of the company on the date of publication of the draft) to no more than 63 incentive recipients at a one-time basis, with an exercise price of 20.21 yuan per share. The source of the underlying shares involved is the A-share ordinary shares issued by the company to the incentive recipients, and the incentive plan is valid for a maximum period of no more than 48 months.
"This incentive plan is a form of expression of the increase in the shareholding of employees, through the implementation of this incentive plan and the commitment of employees to performance goals, the establishment of a benefit sharing and constraint mechanism between shareholders, the company and employees, to bring sustainable returns to shareholders, but also help to improve investors' confidence in the company's performance and market value, is conducive to establishing a positive company image, enhance the company's influence and recognition in the secondary market." JuneYao Health said.
Payments are made in equity-settled shares
Set up a double appraisal of company performance and personal performance
Specifically, in terms of timing, the draft shows that the validity period of JuneYao Health's incentive plan is no more than 48 months from the date of authorization of stock options to the date on which all the stock options granted to the incentive recipients are exercised or cancelled. It is worth mentioning that different waiting periods apply to all stock options granted to incentive recipients, with an interval of not less than 12 months between the grant date and the date of first exercise.
In terms of the setting of exercise conditions, at the company level, JuneYao Health chose the performance conditions in the feasible rights conditions and took the revenue growth rate as the assessment indicator. That is, the audited operating income from 2022 to 2024 will increase by no less than 50%, 125% and 238% respectively compared with 2021.
"The setting of the performance indicator is combined with the company's current situation, future strategic planning and the development of the industry and other factors to be formulated, on the one hand, it helps to enhance the company's competitiveness and mobilize the enthusiasm of employees, on the other hand, it can focus on the company's future development strategy direction, stabilize the realization of business objectives, and bring more efficient and lasting returns to shareholders."
At the same time, JuneYao Health has also set up a strict performance appraisal system for individuals.
The announcement shows that the individual assessment of the incentive object is carried out in accordance with the "Company Assessment management measures", and the evaluation results are determined by the individual performance evaluation indicators, and in principle, the performance evaluation results are divided into four grades of "excellent", "good", "qualified" and "unqualified", and the corresponding standard coefficients are 1.0, 1.0, 0.8 and 0. Under the premise that the company's performance target is achieved, the actual exercise quota of the individual in the current year = the standard coefficient × the amount of the individual's planned exercise in the current year.
Finally, in terms of the impact on the company's performance, since the incentive tool chosen by JuneYao Health this time is stock options, the type of share payment involved is equity-settled share payment. In accordance with the relevant provisions of Accounting Standard for Business Enterprises No. 11 - Payment of Shares and Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, the Company shall include the services acquired in the current period in the relevant costs or expenses at the fair value of the stock option grant date, based on the best estimate of the number of stock options available during the waiting period, and other capital reserves in the capital reserve.
JuneYao Health said that if the fair value of the stock options on the authorization date is calculated according to the closing data of the trading day before the draft is released, the total fair value of the equity instruments granted this time is expected to be 30.6939 million yuan. Assuming that the Company grants stock options in March 2022 and all incentive recipients granted meet the exercise conditions and are fully exercised during each exercise period, the Company will need to amortize $1,138.43, 11,291,110,660,860 and $1,379,900 from 2022 to 2025, respectively, and make a statement in administrative expenses.
Leading enterprise of room temperature lactic acid bacteria
Add probiotics to create a second growth curve
It is not difficult to imagine that the equity incentive plan has great positive significance for JuneYao Health, both in terms of its own development and market level. At the level of company development, the vital interests of employees are deeply bound to the company's development interests through equity incentives, which is also conducive to enhancing the competitiveness of the company while greatly enhancing the enthusiasm of employees; and at the market level, the setting of relevant performance conditions has also played a "strong shot" for the market, which has greatly enhanced the confidence of shareholders in the company's future development.
It is worth noting that whether it is the smooth implementation of the entire equity incentive plan or the completion of the performance conditions in the middle, JuneYao Health has enough confidence.
In the milk beverage industry with high brand barriers, JuneYao Health is a pioneer in the domestic room temperature lactic acid bacteria industry and a leading enterprise in the industry, with high brand awareness and market share in the forefront of the industry. According to the data, as early as 2011, JuneYao Health launched the "Flavor Power" lactic acid bacteria series of drinks, strategically entering the ambient lactic acid bacteria beverage market, and is one of the earliest brand enterprises in China to produce and sell room temperature lactic acid bacteria drinks.
According to the financial report data, from 2017 to 2019, JuneYao Health achieved a net profit attributable to the mother of 226, 254 and 295 million yuan respectively, increasing year by year, and although it was lowered under the shadow of the new crown epidemic in 2020, it was still as high as 214 million yuan. In the future, with the continuous improvement of residents' income level and the gradual enhancement of consumers' health awareness, the milk beverage industry will also have good development prospects, and JuneYao Health, as a leading enterprise at that time, will also benefit a lot.
According to the data of the China Food Industry Association, from 2019 to 2023, the mainland milk beverage industry will continue to maintain steady growth, and the growth rate is expected to remain basically at 6% to 8%, and the total output value of enterprises above designated size in the milk beverage industry will increase from 97.350 billion yuan in 2019 to 131.440 billion yuan in 2023.
It is worth mentioning that in recent years, While increasing product research and development and channel investment to stabilize the market share of room temperature lactic acid bacteria beverages, JuneYao Health has also clarified the breakthrough direction with the innovative application of probiotics as the core and actively explored the second growth curve. According to the "2021-2025 China Probiotic Industry Market Panorama Survey and Competition Pattern Analysis Report", China's probiotic market has an average annual growth rate of about 15%, and it is expected that the market size will be close to 90 billion yuan in 2022, and the industry prospects are very impressive.
According to the data, in the first half of 2021, JuneYao Health added a probiotic division, reached a strategic cooperation agreement with Jiangnan University, the world's first food engineering, set up a joint laboratory with Jiangnan University, and invested 3 million yuan per year for basic research on probiotics, while Jiangnan University will exclusively authorize JuneYao Health to productize the core strains with international competitiveness. Among them, "a strain of Lactobacillus curly (CCFM1118) that can prevent or treat Helicobacter pylori infection" and "a strain of Lactobacillus rhamnosus (CCFM1107) that can alleviate chronic alcoholic liver injury" have been used in many Products of JuneYao.
Up to now, through cooperation with well-known universities such as Jiangnan University, JuneYao Health has stockpiled as many as 10 strains. Not only that, the company has also taken the lead in adding China's first infant edible strain approved by the National Health Commission - MP108 to core products such as room temperature lactic acid bacteria and room temperature cheese sticks. "We hope to achieve certain results in this field and find domestic probiotics that are more suitable for the Chinese people's body." JuneYao Health said. （CIS）