Zhejiang Dama uses half-year net profit to motivate employees

In the cross-border e-commerce industry, big sellers will implement equity incentive plans for outstanding employees to stimulate the enthusiasm and creativity of the team. The incentive plan launched by Zhejiang Big Seller Kaichuang Electric for its employees for the first time is equivalent to the company's half-year net profit. In 2024, the big seller's performance has grown significantly, and this incentive is expected to form a positive cycle with the company's rapid development.

Zhejiang Dama motivates 31 employees for the first time

In the fourth quarter of 2024, Zhejiang Kaichuang Electric Co., Ltd. (hereinafter referred to as " Kaichuang Electric " ) announced the 2024 restricted stock incentive plan .

According to the authorization of the company's second extraordinary general meeting of shareholders in 2024, 2.90 million restricted shares will be granted to 31 incentive targets for the first time. These 31 targets include directors, senior managers and core employees of the company or its subsidiaries .

Among them, Kaichuang Electric's director, deputy general manager, and board secretary Zhang Yaosi, as well as deputy general managers Wang Shoujiang and Zhang Wei, and director and marketing center key account manager Huang Li will each receive 200,000 shares, accounting for 5.52% of the total grant. The other 27 core employees will receive a total of 2.1 million shares.

Finally, the company will confirm the shares in installments according to the vesting ratio during the implementation of this incentive plan. According to calculations, the total amortization cost of the restricted shares granted under this incentive plan is expected to be 36.1196 million yuan, which is equivalent to the net profit of Kaichuang Electric for half a year.

In the first half of 2024, Kaichuang Electric achieved operating income of 348 million yuan, a year-on-year increase of 18.5%; and achieved net profit attributable to shareholders of the parent company of 35.1849 million yuan, a year-on-year increase of 30.96%.

It is understood that Kaichuang Electric was listed on the Shenzhen Stock Exchange's Growth Enterprise Market on June 19, 2023. This equity incentive is the first stock incentive plan launched by Kaichuang Electric in more than a year since its listing. The company's incentive plan also has performance evaluation indicators.

The performance evaluation conditions set by Kaichuang Electric are that the company's operating income target values ​​from 2024 to 2026 are 735 million yuan, 1.14 billion yuan, and 1.848 billion yuan, respectively, and the net profit target values ​​are 64 million yuan, 99 million yuan, and 161 million yuan, respectively. The total revenue for the three years is 3.723 billion yuan and the net profit is 324 million yuan.

In addition to company-level performance appraisals, Kaichuang Electric has also set up business unit-level performance appraisals and individual-level performance appraisals to establish a more comprehensive appraisal system.

The individual performance appraisal of all incentive targets is implemented in accordance with the company's internal performance appraisal system. The individual appraisal results of incentive targets are divided into five levels: "A", "B", "C", "D", "E and below", and the corresponding attributable situations are 100%, 80%, 60%, 50%, and 0%.

This time, Kaichuang Electric's equity incentive for its employees is based on the company's significant increase in performance.

Revenue and net profit increased simultaneously

Kaichuang Electric was established in December 2015. It is a professional power tool manufacturer mainly engaged in the research and development, production, sales and trade of handheld power tools and core components. The power tool series products produced by the company are widely used in home decoration, wood processing, metal processing, automobile maintenance, construction and road construction and other fields.

The company's products are sold overseas to North America, Europe, Asia, South America, Oceania and other regions, mainly through online and offline channels. Among them, offline channels include foreign tool and building materials supermarkets, brand tool dealers, importers and exporters. Online channels are mainly on Amazon, Taobao, Tmall and other mainstream e-commerce platforms at home and abroad, among which overseas e-commerce sales platforms are mainly concentrated on Amazon.

The company has two main independent brands, Galaxia and Galaxia Pro/Galax Pro. Galaxia products are positioned as professional models. Galaxia Pro is mainly sold online and positioned as a mid-range economical model. On Amazon, some links of Galaxia Pro have accumulated thousands of reviews and are hot-selling items in the category.

Kaichuang Electric's specific products include circular saws, reciprocating saws, multi-function saws, angle grinders, jig saws, electric drills, electric wrenches and other categories, as well as accessories such as battery packs and injection molding boxes. According to statistics from the Electric Tools Branch of the China Electrical Equipment Industry Association, the company's main product, circular saws, ranked among the top five domestic companies in terms of annual sales revenue in 2021-2023.

In terms of revenue and profit in 2023, the company achieved total operating revenue of 586 million yuan, a year-on-year decrease of 1.95%, and net profit of 51.4093 million yuan, a year-on-year decrease of 13.04%.

However, the company's revenue and net profit have increased significantly since 2024. In the first three quarters , Kaichuang Electric achieved a total operating income of 563 million yuan, a year-on-year increase of 32.21%; and a total net profit attributable to the parent company of 54.7907 million yuan, a year-on-year increase of 37.33%.

In the third quarter, the company's performance increased significantly , with operating income of 215 million yuan, a year-on-year increase of 62.77%; net profit attributable to the parent company was 19.6058 million yuan, a year-on-year increase of 50.45%. In other words, both revenue and net profit attributable to the parent company increased by more than 50% year-on-year.

Positive cycle of equity incentives and rapid development

Kaichuang Electric's performance growth is inseparable from the development of cross-border e-commerce channels and the continuous expansion of product categories. Among them, the sales growth achieved through the Amazon platform cannot be ignored.

At present, this big seller is vigorously developing the e-commerce model, and the proportion of cross-border e-commerce sales revenue is gradually increasing. The company has established cross-border e-commerce companies in Jinhua, Hangzhou and Shenzhen , and carried out promotion and sales on third-party e-commerce platforms such as Amazon.

The e-commerce sales model is compatible with power tool companies . It can not only improve product liquidity, but also break through the limitations of traditional sales channels and enhance the company's brand awareness. Since the end users of DIY power tool companies are mostly household consumers, the promotion of the e-commerce model is particularly beneficial to the development of such companies.

According to Research Nester, 55% of Americans own at least 5 power tools, and 23% own 10 or more. In addition , nearly 46% have added to their power tool collection in the past decade.

In addition to selling power tool products, the company's e-commerce platform has also added other product categories based on market demand. With the continuous expansion of cross-border e-commerce channels and categories, cross-border e-commerce sales revenue will gradually increase, laying the foundation for the company's future operating performance growth .

Strengthening innovation and creating new technological advantages also promoted the growth of performance. The company met market demand by launching new products, technological innovation or product upgrades, thus enhancing its market competitiveness.

In the first half of 2024, Kaichuang Electric's technical center has developed more than 90 new products in 17 categories, 14 of which have been put into production and 10 are in trial production. The company has applied for 24 patents, including 9 invention patents and 2 overseas patents.

Power tools have become one of the indispensable household appliances in developed countries. With the improvement of living standards and the increasing demand of global consumers for a better life, the demand for smart power tools is increasing, and the overall market size of global smart power tools will continue to grow in the future.

EVTank predicts that global power tool shipments will exceed 700 million units by 2026, and the market size may exceed US$80 billion .

Since its listing, the support of capital has enabled Kaichuang Electric to enter a rapid development track . The funds raised have achieved certain results in market expansion, overseas factory layout, and product lithium battery transformation . At the same time, the company has strengthened the introduction of talents and provided equity incentives to talents, further enhancing the company's core competitiveness and improving the brand effect.

Zhejiang big seller

Equity Incentive