Big deal! Shenzhen Dama plans to let employees buy shares at half price

Big deal! Shenzhen Dama plans to let employees buy shares at half price

Huakai Yibai launched an employee stock ownership plan.

In the cross-border circle, many companies often offer generous rewards to maintain rapid growth in performance, which not only motivates employees to work actively and creatively, but also improves the cohesion and competitiveness of the company. In the past, Cross-border Communication took 43 million shares as equity incentives, followed by Aosen E-commerce, and now Huakai Yibai allows employees to buy shares at half price. This method of gathering people and "making money" is also used as a reference by many cross-border sellers.

Huakai Yibai plans to allow employees to buy shares at half price

In the first half of this year, after Huakai Yibai completed the acquisition of Yibai Network, the company's name was changed from "Huakai Creative" to "Huakai Yibai", and Yibai Network also completed a backdoor listing in a substantial sense. At the same time, Huakai Yibai began to adjust the company's business. After shrinking the company's space environment art design business, it adjusted the cross-border export e-commerce business to the company's main business.

Huakai Yibai's move is precisely because it sees the money-making ability of the cross-border e-commerce track. As Huakai Yibai's main source of profit, Yibai Network contributed a net profit of 106 million yuan to its parent company in the first half of 2022, which is much higher than the annual net profit of some cross-border e-commerce companies. Compared with the net profit of 159 million yuan attributable to the company in 2021, it has grown rapidly.

It is not difficult to see why Huakai Yibai launched an employee stock ownership plan. Having an efficient and strong team is an important guarantee for the company's performance to maintain rapid growth.

It is reported that the total number of shares acquired in the employee stock ownership plan launched by Huakai Yibai this time does not exceed 8 million shares, mainly for employees who currently work in the company's holding subsidiary Yibai Network or have made direct contributions to the operation and management of Yibai Network, such as the company's directors, supervisors, senior managers, middle-level managers and core backbones. Among them, the number of middle-level managers and core backbones who intend to participate in the stock ownership plan shall not exceed 7 people, and the total number of employees who can eventually participate in the stock ownership plan shall not exceed 15 people.

Of course, in this employee stock ownership plan, the price at which employees repurchase company shares is also very attractive, at 7.36 yuan per share, which is 50% of the average trading price of the company's stock in the 20 trading days before the announcement of the draft plan. This is equivalent to employees who meet the requirements of the stock ownership plan directly getting the opportunity to buy shares at half price.

If this plan is successfully implemented, the company predicts that based on the closing price of the draft shareholding on the day (14.62 yuan per share), the total expenses that Huakai Yibai will have to amortize will be 58.08 million yuan.

However, for eligible employees, it still takes a certain amount of time and conditions to successfully hold shares.

Firstly, employees' successful shareholdings need to be unlocked in two batches . The first batch, 50%, will be unlocked 12 months after the company announces the transfer of the last batch of target stocks to the employee stock ownership plan ; the other 50% will be unlocked after 18 months.

Secondly, the employee stock ownership plan also has performance assessment, which also needs to be unlocked in two batches. The first batch of unlocking requires Yibai Network's net profit attributable to shareholders after deducting non-recurring items in 2022 to be no less than 270 million yuan, otherwise it will be unlocked according to performance completion; the second batch of unlocking requires Yibai Network's net profit attributable to shareholders after deducting non-recurring items in 2022-2023 to be no less than the target value of 600 million yuan or the trigger value of 570 million yuan.

If the company-level performance assessment does not reach the target value or trigger value during a certain assessment period, the underlying stocks corresponding to the non-unlockable shares during that period will be sold at an appropriate time 12 months after the company announces the transfer of the last batch of underlying stocks to the name of this employee stock ownership plan , and the original capital contribution amount of the corresponding shares plus the bank deposit interest for the same period (calculated based on the actual number of days) and the amount obtained from the sale will be returned to the holder at the lower value. If there is still income after the return to the holder, the income belongs to the company.

Obviously, if Yibai Network's net profit reaches the target, employees can obtain unlocked stocks and profits, but if it does not, employees can get the original investment amount and the interest on bank deposits during the same period.

A group of sellers are implementing equity incentives. Is this a good thing or a bad thing?

Sellers have different attitudes towards Huakai Yibai’s employee stock ownership plan.

The optimistic sellers are based on the following two points. First, Yibai Network has exceeded its performance commitments in the three-year bet from 2019 to 2021. The net profit attributable to the parent company's owners after deducting non-recurring gains and losses was 175 million yuan, 363 million yuan, and 216 million yuan, respectively. Second, Yibai Network has already achieved a net profit of 106 million yuan in the first half of 2022, so it is not difficult to achieve a net profit of over 100 million yuan in the second half of the year.

Sellers who are not optimistic believe that the unlocking target value and trigger value set in 2023 are too high. Judging from the trigger value, it is almost impossible to unlock the net profit of no less than 570 million yuan. Whether it can be achieved or not, we still need to wait for next year's data.

However, in terms of equity incentives, many big sellers have already put it into practice. Not only Huakai Yibai, but also a number of big sellers such as Kuaijietong, Jihong Shares, Aosen E-commerce, and JIMI Technology have all spent millions or even tens of millions of shares for equity incentives.

From the average data analysis given by the big sellers, as long as the incentives are true, the results achieved are basically favorable. Some sellers said: "I haven't seen any actual unfavorable cases yet." But it is not ruled out that unfavorable cases will appear in the future due to external factors.

As we all know, equity incentives are the core weapon for corporate operations and development. Good equity incentives can make employees work harder and help companies move to a higher level! When listed companies engage in equity incentives, they simply want to motivate company executives to use all their talents and energy to actively strive for the company's performance growth goals.

When the employees who are the targets of the incentives improve their performance, the company's stock price will go up . Employees not only have the right to receive labor remuneration according to their work , but also can obtain the benefits brought by capital appreciation, thus establishing a deeper community of interests with the company. It can be said that this plan fully mobilizes the enthusiasm of the company's key talents, improves the interest sharing and corresponding constraint mechanism, and binds the interests of the company, shareholders and the personal interests of the core team.

For sellers, they are very clear about the importance of maintaining a stable core team and deeply binding key employees through equity incentives and other means. This is also an important reason why many sellers invest a lot of resources and even implement various incentive plans.

Here, the editor recommends that when formulating an equity incentive plan, do not blindly follow the trend, make relevant agreements and investigations in advance, choose the right time, formulate appropriate entry mechanisms, assessment mechanisms and exit mechanisms, and set reasonable goals. Finally, it can achieve the goal of protecting the interests of the company, the boss, and the interests of the people being motivated.

Huakai Yibai

stock

Shareholding