Under the “triple pressure”, the equity incentive target of Yutong Bus was only half fulfilled

2022-08-15 0 By

Yutong Bus, whose sales are not improving at all, has no hope of achieving the equity incentive target.Recently, Yutong Bus (600066.SH) announced that in the first two months of 2022, the company’s sales volume reached 2,668 vehicles, down 36.26% year-on-year.Reporters from Changjiang Business Daily found that Yutong bus sales started to decline in July 2021 and have declined for eight consecutive months.Its full-year 2021 sales were flat, but about 35% of its capacity remains idle.In February 2021, Yutong Bus released the equity incentive draft, in which the performance assessment target in 2021 was 1.115 billion yuan, but the actual net profit is expected to be 566 million to 666 million yuan, only about half of the assessment target.With no hope of achieving the target, Yutong Bus voluntarily terminated the 2021 restricted stock incentive plan, citing the triple pressure of shrinking demand, supply shock and weakening expectations.Yutong Bus is a large manufacturing enterprise integrating bus product research and development, manufacturing and sales. The main products can meet the market demand of different lengths from 5 meters to 18 meters. It has a complete product chain of 131 product series.In February 2021, Yutong Bus issued the equity incentive draft, and planned to grant about 49 million shares of the company’s stock to 555 people, including the company’s vice president, chief financial officer, secretary of the board of directors and core staff, at an exercise price of 6.99 yuan per share.At that time, Yutong bus share price more than 13 yuan/share, exercise price is equivalent to a 50% discount.The assessment year for the lifting of restricted shares in the incentive plan of Yutong Bus is from 2021 to 2023. The performance assessment benchmark is the net profit in 2020, and the net profit increase in the three years shall be no less than 116%, 202% and 315% respectively.Data show that from 2017 to 2020, The operating revenue of Yutong Bus was 33.222 billion yuan, 31.746 billion yuan, 30.492 billion yuan and 21.705 billion yuan, with year-on-year growth of -7.33%, -4.44%, -3.99% and -28.82%, respectively.Net profit was 3.129 billion yuan, 2.301 billion yuan, 1.942 billion yuan and 516 million yuan, up -22.62%, -26.45%, -15.61% and -73.43% respectively.Therefore, from 2021 to 2023, the net profit of Yutong Bus should reach 1.115 billion yuan, 1.558 billion yuan and 2.141 billion yuan respectively to complete the performance assessment.Obviously, yutong Bus’s draft equity incentive requirement is not very high after its net profit dropped sharply due to the epidemic. Even the net profit in 2023 has not recovered to the level of 2018.In the 2020 annual report, Yutong Bus also plans to have a revenue of 24.777 billion yuan in 2021, a cost plan of 19.741 billion yuan, and an expense plan of 3.79 billion yuan.If the company can meet that target, its net profit will also be in line.The reality, however, is that yutong bus fails even if the standards are not high.Recently, Yutong bus released 2021 annual performance forecast shows that the net profit attributable to shareholders of listed companies is expected to increase by 50 million yuan to 150 million yuan compared with the same period last year (statutory disclosure data), a year-on-year growth of 10% to 30%.This means that Yutong Bus in 2021 net profit of 566 million to 666 million yuan, far less than the performance assessment of 1.115 billion yuan, only about half.On January 11, Yutong Bus terminated the implementation of 2021 restricted stock incentive plan.The reason given by Yutong Bus is that due to the repeated impact of COVID-19, domestic economic development is faced with triple pressures of demand contraction, supply shock and weakening expectations, and the demand recovery of the bus industry is still uncertain. It is difficult to achieve the expected incentive purpose and effect by continuing to implement the incentive plan.The stock price of Yutong Bus is hovering around 8 yuan per share since February 2021.On the evening of March 7th, Yutong Bus issued the announcement of increasing the holding of Yutong Group, the controlling shareholder of the company, which planned to increase the holding by no less than 100 million yuan and no more than 200 million yuan, and no price range was set for the increase.On March 8 and 9, Yutong Group successively increased its holdings of Yutong Bus, spending 19.8668 million yuan and 40.1281 million yuan respectively, totaling 59.9949 million yuan, but the stock price of Yutong Bus continued to decline.Sales fell by more than 30% for two consecutive months, which was closely related to the poor sales of Yutong Bus.From 2016 to 2020, The sales volume of Yutong Bus was 71,000, 67,600, 60,900, 58,700 and 41,800 respectively, with year-on-year growth of 5.92%, -4.82%, -9.51%, -3.58% and -28.85% respectively, declining for four consecutive years.In 2021, The sales volume of Yutong bus reached 41,800 units, an increase of 72 units compared with the same period last year, with a year-on-year growth rate of 0.17%.Reporters from Changjiang Business Daily found that Yutong bus sales started to decline in July 2021, eating up all the gains saved in the first half of the year.Among them, since September, the sales volume of the company has dropped more than 30% for three consecutive months, respectively 30.14%, 38.44% and 34.31%.Although Yutong bus sales have maintained positive growth throughout the year, the company still has a lot of idle capacity.According to the 2020 annual report, Yutong Bus owns Zhengzhou Yutong Bus Co., LTD., Zhengzhou Yutong Bus Co., LTD. New energy Branch and Zhengzhou Yutong Bus Co., LTD. Special vehicle branch. The design capacity of the three factories is respectively 30,000 cars, 30,000 cars and 5,000 cars, totaling 65,000 cars.In 2020, the output was 21,000 units, 16,500 units and 0.4,500 units, with capacity utilization rates of 69.89%, 55.04% and 90%, respectively. The comprehensive capacity utilization rate reached 64.58%, and about 23,000 units of idle capacity.In 2021, Yutong bus production reached 42,100 vehicles, 86 more than the same period last year, an increase of 0.2%, about 23,000 vehicles idle capacity, idle rate of about 35%.In his speech for the New Year of 2022, Tang Yuxiang, chairman of Yutong Group, named “No wind, strong sails, new ambition and vigorous endeavor”. He said that looking forward to 2022, although the situation is still not optimistic, it is in line with the national development strategy and based on the electric track of commercial vehicles, and the market segments where Yutong is located have broad prospects.However, entering 2022, Yutong bus sales continued to decline.In the first two months of 2022, Yutong bus sales reached 2,668 units, down 36.26% year-on-year.In January and February, the company sold 1,828 and 840 units respectively, up by -36.20% and -36.41% year-on-year respectively.It also said Yutong bus sales have fallen for eight consecutive months and have fallen by more than 30 percent since 2022.Specifically, in the first two months, Yutong Bus sales of large buses, medium buses and light buses were 1,271, 878 and 519, respectively, year-on-year growth of -19.71%, -47.77% and -43.71%, the three models are “lost”.In the first three quarters of 2021, yutong Bus’s monetary capital and trading financial assets were 4.646 billion yuan and 1.755 billion yuan respectively, but the company’s notes payable and accounts payable totaled 10.664 billion yuan in the same period.In addition, the semi-annual report of 2021 shows that Yutong Bus receivables reach 7.262 billion yuan, including 4.14 billion yuan within one year, 3.122 billion yuan in total over one year, and 1.233 billion yuan in bad debt reserve.On November 27 and December 28, 2021, Yutong Bus successively issued announcements on the implementation of receivables factoring, saying that due to operation and management needs, the company and institutions will carry out receivables factoring without recourse, with a total scale of RMB 700 million and RMB 1.690 billion respectively.Yutong bus said that the implementation of receivables factoring is conducive to reducing the cost of receivables management, improving the efficiency of fund use and improving the operating cash flow, which is in line with the company’s development plan and the overall interests of the company, and is expected to have a positive impact on the company’s cash flow and other aspects.Visual Map of China