Yangtze River Business Daily News ● Yangtze River Business Daily reporter Huang Cong
Under the continuous improvement of performance, the controlling shareholder of Flextron Electric transferred its equity at a low price.
On May 5, Flextron Electric (688698. SH) announced that the company's controlling shareholder Huai'an Weichuang intends to transfer its 10.513 million shares (accounting for 5.00% of the company's total share capital) of the company to Lai Tianlu No. 2 by way of agreement transfer.
It should be noted that Huai'an Weichuang, the controlling shareholder of Flextron Electric, has added Diners Clubs Tianlu No. 2 as persons acting in concert, and the company's directors Luo Peng and Mo Zhuqin are the holders and beneficiaries of all the shares of Diners Clubs Tianlu No. 2.
The Yangtze River Business Daily reporter found that the transfer price of the above transaction was 22.82 yuan per share, totaling about 240 million yuan. As of the close of the trading day before the announcement date, the share price of Flextron Electric was 28.8 yuan per share, and the transfer price was equivalent to a 7.92 discount.
It is worth mentioning that in April 2022, Flextron Electric released the 2022 restricted stock incentive plan (draft), which was adjusted nearly 5 months later. Moreover, after receiving inquiries from regulatory authorities, the company adjusted the incentive plan again.
However, Flextron Electric has not completed the 2023 A-level assessment target under the two adjustments to the incentive plan.
It should be noted that in April 2024, Flextron Electric released the 2024 stock option incentive plan (draft), in which the net profit assessment target for 2024 decreased by about 20 million yuan compared with the adjusted version in 2022.
The transfer price is discounted by 7.92%.
Since its establishment, Flextron Electric has always focused on the field of electrical transmission and industrial control, and is a national high-tech enterprise engaged in the research and development, production and sales of industrial automation products.
On the evening of May 5, the announcement issued by Flextron Electric showed that the company's controlling shareholder, Huai'an Flextron Electric Technology Co., Ltd. (hereinafter referred to as "Huai'an Flextron"), intends to transfer its 10.513 million shares (accounting for 5.00% of the company's total share capital) of the company to Shenzhen Qianhai Diners Private Securities Fund Management Co., Ltd. - Diners Club Tianlu No. 2 Private Securities Investment Fund (hereinafter referred to as "Diners Clubs No. 2") by way of agreement transfer.
It should be noted that Huai'an Weichuang, the controlling shareholder of Flextron Electric, has added Diners Clubs Tianlu No. 2 as persons acting in concert, and the company's directors Luo Peng and Mo Zhuqin are the holders and beneficiaries of all the shares of Diners Clubs Tianlu No. 2.
Flextron Electric said that this change in equity belongs to the increase of the controlling shareholder Huai'an Flextron and the transfer of shares by agreement within the concerted actor, which will not lead to a change in the total number and proportion of shares held by the company's controlling shareholders and persons acting in concert, and will not change the company's controlling shareholders and actual controllers.
The transfer price of the shares sold by Huai'an Weichuang to Diners Tianlu No. 2 is 22.82 yuan per share, totaling about 240 million yuan. As of the close of the trading day before the announcement date, the share price of Flextron Electric was 28.8 yuan per share, and the transfer price was equivalent to a 7.92 discount.
At the end of 2023, Flextron Electric's share price reached 34.51 yuan/share, and then went all the way down, of which it once fell to 22.36 yuan/share on February 6, 2024. Since then, the company's stock price has maintained a volatile upward trend.
Some industry insiders said that if the price is lower, the controlling shareholder of Flextron Electric can reduce the corresponding expenses such as taxes and fees if the price is lower.
Lowering the assessment target to receive inquiry letters
Since its listing in December 2020, Flextron Electric's performance has grown well.
From 2020 to 2022, Flextron's operating income was 572 million yuan, 819 million yuan and 906 million yuan respectively, an increase of 28.24%, 43.10% and 10.64% year-on-year, respectively, and the net profit was 87.5555 million yuan, 127 million yuan and 140 million yuan, an increase of 52.13%, 44.76% and 10.38% year-on-year respectively.
In April 2022, Flextron Electric released the 2022 restricted stock incentive plan (draft), which shows that the company's performance assessment target (A) is also the highest level, and the 2022 assessment target is based on the operating income in 2021, and the growth rate of operating income in 2022 is not less than 30%, or the net profit in 2021 is based on the growth rate of net profit in 2022 is not less than 25%.
However, five months later, the 2022 restricted stock incentive plan (revised draft) released by Flextron Electric in September 2022 shows that in the company's performance appraisal target (A), the 2022 assessment target is based on 2021, with a growth rate of no less than 10% in operating income or no less than 6% in net profit in 2022.
Obviously, there is a huge difference between the assessment objectives of the two versions before and after Flextron Electric.
In this regard, in response to the inquiry letter of the Shanghai Stock Exchange, Flextron Electric said that since April 2022, the company has experienced a year-on-year decline in operating income and a significant slowdown in the growth rate of profit indicators.
In September 2022, Flextron Electric adjusted the assessment target again, and the company took the operating income in 2021 as the base, and the growth rate of operating income in 2022 was not less than 20%, and the net profit growth rate in 2022 was not less than 10% based on the net profit in 2021.
In the end, Flextron Electric increased its net profit by more than 10%, or "exceeded" the A-level assessment target lowered in 2022.
The new net profit target fell by 20 million
It is worth noting that in the re-adjustment of the assessment target, Flextron Electric's 2023 performance appraisal target (A) shows that based on 2021, the growth rate of operating income in 2023 will not be less than 60%, or the growth rate of net profit will not be less than 55%.
This also means that Flextron Electric's A-file performance target in 2023 is to achieve an operating income of 1.31 billion yuan or a net profit of 196 million yuan.
In 2023, Flextron Electric achieved operating income of 1.305 billion yuan, a year-on-year increase of 44.03%, and net profit of 191 million yuan, a year-on-year increase of 36.38%. From this point of view, the company has not completed the A-level target in 2023.
In the re-adjustment of the assessment target, Flextron Electric's 2024 performance appraisal target (A) shows that based on 2021, the growth rate of operating income in 2024 will not be less than 100%, or the growth rate of net profit will not be less than 95%.
In other words, Flextron Electric's assessment target for 2024 is an operating income of 1.638 billion yuan or a net profit of 254 million yuan.
On April 26, 2024, the 2024 stock option incentive plan (draft) released by Flextron Electric shows that the performance assessment target (A) requires that the company take 2023 as the base, and the growth rate of operating income in 2024 shall not be less than 25.51%, or the growth rate of net profit shall not be less than 22.28%.
Therefore, in the new version of Flextron Electric's incentive plan, the company's assessment target for 2024 is operating income of 1.638 billion yuan or net profit of 234 million yuan. Among them, the company's net profit target decreased by about 20 million yuan compared with the adjusted version in 2022.
In the first quarter of 2024, Flextron Electric's operating income reached 328 million yuan, a year-on-year increase of 15.21%, and its net profit was 53.652 million yuan, a year-on-year increase of 25.29%, and the company's net profit growth rate reached the latest downward target standard.
On the whole, in the past two years, Flextron Electric has adjusted the stock incentive plan three times, of which the 2023 A-level assessment target has not been met after the first two adjustments.