WILLING CORP.(SZ:002667) Jin Rong Jie·2025-08-05 07:45Core Viewpoint - Weiling Co., Ltd. (002667.SZ) has announced a restricted stock incentive plan for 2025, proposing to issue 18.5655 million shares, accounting for 7.66% of the total share capital, aimed at the management and core technical personnel [1][2]. Summary by Sections Incentive Plan Details - The restricted stock will be granted at a price of 6.10 CNY per share, which is approximately 50% of the closing price of 12.03 CNY on August 4 [2]. - The plan includes two unlocking periods of 12 and 24 months, with each unlocking 50% of the shares. The first unlocking condition is for the company to achieve a positive EBITDA in 2025, while the second condition requires a positive EBITDA in 2026 and a minimum EBITDA of 60 million CNY from its subsidiary [3][4]. Management and Shareholder Dynamics - If the performance targets are not met, the restricted shares will not be unlocked, and the company will repurchase them at the grant price plus bank interest, indicating a low-risk scenario for management [5]. - The allocation of 7.66% of total share capital for this incentive plan suggests that management is not solely relying on the buyback as a safety net, but rather is taking a significant gamble [6]. Industry Context - Weiling Co., Ltd. has experienced fluctuating performance in the lithium carbonate sector, with a peak net profit of 79 million CNY in 2022, followed by revenues of 1.141 billion CNY and 533 million CNY in 2023 and 2024, respectively, resulting in net losses of 217 million CNY and 322 million CNY [6]. - The lithium carbonate market has seen a drastic decline in prices, with spot prices dropping from a peak of 600,000 CNY per ton in Q4 2022 to below 60,000 CNY per ton, leading to significant losses across the industry [7][10]. Future Outlook - Recent developments, including the sixth meeting of the Central Financial Committee, have sparked optimism in the lithium carbonate and polysilicon industries, with prices rebounding to around 80,000 CNY per ton, indicating potential recovery [10]. - The incentive plan reflects management's strategy to mitigate uncertainty while capitalizing on potential market rebounds, although the appropriateness of using EBITDA as a performance metric has been questioned [12][15]. Financial Metrics and Concerns - The use of EBITDA as a performance target has raised concerns, as it does not account for depreciation and amortization, which are significant costs for capital-intensive manufacturing companies [12][13]. - The company's forecast for H1 2025 indicates a potential net profit of 0 to 5 million CNY, with a projected loss of 5.2 to 6.9 million CNY in non-recurring net profit, highlighting the disparity between EBITDA and net profit metrics [14][15].