The share price has soared, and the giant with a market value of 230 billion plans to launch a restricted stock incentive for more than 1,500 key employees, with a discount of over 30%. An employee stock ownership plan is also launched simultaneously, and the president, vice presidents and other personnel are all included in the plan.

On the evening of July 20, Shenghong Technology (SZ300476) released the draft of its 2026 A-share Restricted Stock Incentive Plan, proposing to grant no more than 4.8624 million restricted shares to 1,545 incentive recipients, accounting for approximately 0.4948% of the company's total share capital.

Reporters from National Business Daily (hereinafter referred to as "NBD Reporters") noted that Shenghong Technology also released the draft of its 2026 Phase I A-Share Employee Stock Ownership Plan that same evening, planning to raise a total of no more than 700 million yuan. Eligible participants include no more than 564 personnel such as directors, senior executives, and core backbone employees.

Incentive Recipients Reach 1,545, Including 131 Foreign Employees

According to the announcement, the number of initial grant recipients under this incentive plan of Shenghong Technology totals 1,545, including the company's middle-level managers and core technical (business) backbones, excluding the company's directors, senior management personnel, as well as shareholders or actual controllers holding individually or in aggregate more than 5% of the company's shares, and their spouses, parents, and children. Meanwhile, the incentive plan recipients include 131 foreign employees (including personnel from Hong Kong, Macao and Taiwan, the same hereinafter).

Image Source: Announcement of Shenghong Technology

Shenghong Technology stated that after the incentive plan is reviewed and approved by the board of directors, the company will publicize the names and positions of the incentive recipients within the company through the company's website or other channels before convening the shareholders' meeting, with a publicity period of no less than 10 days.

According to the announcement, the incentive instrument adopted in this incentive plan of Shenghong Technology is the second type of restricted stock, and the underlying stock involved comes from the company's repurchases on the secondary market and/or the targeted issuance of A-share common stocks of the company to the incentive recipients.

Of the no more than 4.8624 million restricted shares proposed to be granted to incentive recipients, 4.6624 million shares will be granted initially, and 200,000 shares will be reserved for grant. The grant price of the restricted shares (including reserved shares) under this incentive plan is 155.94 yuan per share. That is, after the grant conditions and vesting conditions are met, the incentive recipients can purchase the company's A-share common stocks, which are repurchased by the company from the secondary market and/or targeted issued to the incentive recipients, at a price of 155.94 yuan per share.

Although Shenghong Technology adopted the closing price of 241.50 yuan per share on July 17 when calculating the scale of the employee stock ownership plan, according to East Money Information, as of the close of trading on July 20, the stock price of Shenghong Technology closed at 224.11 yuan per share. In other words, the grant price of 155.94 yuan per share represents a 30.42% discount relative to the company's closing price on July 20.

In terms of performance assessment, this incentive plan implements a dual assessment system of "company-level + individual-level". At the company level, taking the 2025 operating revenue or the net profit excluding the impact of share-based payment expenses as the base, the target growth rates from 2026 to 2028 are set to be no less than 50%, 125% and 237.50% respectively (the corresponding benchmark trigger values are 40%, 96% and 174.40% respectively). At that time, the actual vesting ratio at the company level will be dynamically adjusted in a stepped manner between 0 and 100% based on the growth rate. At the individual level, the assessment results are divided into four tiers: the vesting coefficient for tiers A and B is 1.0, tier C is 0.8, and tier D is 0. The final actual vesting quantity is calculated as "individual planned quantity × company vesting ratio × individual assessment coefficient". The unmet portion will be directly invalidated and cannot be deferred.

Employee Stock Ownership Plan Launches Simultaneously, With Total Participants No More Than 564

In addition to the aforementioned incentive scheme, Shenghong Technology also disclosed the draft of its 2026 Phase I A-Share Employee Stock Ownership Plan that same evening. The total number of employees proposed to participate in this employee stock ownership plan is no more than 564, including 4 company directors and senior management personnel. The specific number of participants will be determined based on the actual contribution status of employees.

The total amount of funds proposed to be raised under this employee stock ownership plan is no more than 700 million yuan. Among this amount, the total self-raised funds from employees through legal and compliant methods such as compensation will not exceed 350 million yuan. The ratio of financing funds obtained through methods permitted by laws and regulations such as margin trading to self-raised funds will not exceed 1:1, meaning the financing amount will not exceed 350 million yuan.

According to the announcement, the company's senior executives participating in this employee stock ownership plan include Liu Chunlan, a director of Shenghong Technology; Zhao Qixiang, a director and president; and Zhu Guoqiang, the chief financial officer. All three intend to subscribe for 10 million shares respectively, each accounting for 1.43% of the total shares under this employee stock ownership plan. Meanwhile, Chen Yong, a company director and vice president, intends to subscribe for 8 million shares.

Image Source: Announcement of Shenghong Technology

NBD Reporters noted that Liu Chunlan is the spouse of Chen Tao, the actual controller and a concert party acting in concert with the controlling shareholder of Shenghong Technology, while Chen Yong is the brother of Chen Tao, the actual controller and a concert party acting in concert with the controlling shareholder of the company. The company stated that the reason for including the two in this employee stock ownership plan is that Liu Chunlan, as a company director, and Chen Yong, as a company director and vice president, participate in the decision-making of all major matters of the company and play important roles in the company's operation, management, and development strategy.

According to the announcement, this employee stock ownership plan voluntarily waives the voting rights of the shares it holds. The holders of this plan also voluntarily waive the voting rights of the company's shares they indirectly hold by participating in this plan, and only retain other rights such as the dividend right and the right to investment returns of such shares.

On July 21, the stock price of Shenghong Technology surged sharply. As of the midday market close, it rose by more than 5.5%, with a total market capitalization of 232.4 billion yuan.

(Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Investors who act accordingly shall bear their own risks.)

This article is from the WeChat Official Account "National Business Daily", author: Cai Ding, published by 36Kr with authorization.