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Why do executives of listed companies voluntarily give up more than one million yuan in salary? Just now, the news that some senior executives of Minglida voluntarily gave up their salaries has attracted widespread attention in the market.

Minglida announced on the evening of August 20 that the company's general manager Tao Cheng and deputy general manager Zhang Xianming voluntarily gave up their salaries from July 1, 2024 to December 31, 2024. Tao Cheng gave up a basic salary of 480,000 yuan, and an annual salary of 80,000 to 640,000 yuan (subject to the results of the annual assessment), totaling 560,000 to 1.12 million yuan; Zhang Xianming gave up a basic salary of 360,000 yuan, and an annual salary of 60,000 to 180,000 yuan (subject to the results of the annual assessment), totaling 420,000 to 540,000 yuan.

According to the company's 2023 annual report, Tao Cheng and Zhang Xianming's salaries in 2023 were 1.3853 million yuan and 803,200 yuan respectively.

Among them, Tao Cheng directly holds 2.72% of the company's shares, controls 38.22% of the company's shares through Shenzhen Dalei Investment Development Co., Ltd., and directly and indirectly controls a total of 40.94% of the company's shares, making him the actual controller of the company.

As for the reason why the two executives voluntarily gave up their salaries, the company said that in 2024, faced with the complex and changing international situation, the sharp fluctuations in the industry, and the policy of destocking of overseas core customers, the company encountered unprecedented challenges. The two executives, based on their continuous attention to the business environment and a high sense of responsibility, proposed to voluntarily give up the remaining uncollected salary in 2024 in order to show their determination to overcome the crisis with the company, boost the confidence of all employees and investors of the company, and hope to demonstrate the determination and responsibility of managers through practical actions.

Also to express its confidence in future development prospects, Minglida issued a repurchase announcement on the same day, stating that it plans to repurchase the company's shares for 100 million to 160 million yuan, with the repurchase price not exceeding 20 yuan per share, to maintain the company's value and shareholder rights.

Public information shows that Minglida specializes in the design, development, production and sales of precision structural parts and molds. The company has a complete product spectrum of precision structural parts, covering a variety of molding methods such as precision die-casting, precision injection molding and profile stamping. Precision structural parts products are widely used in photovoltaics, energy storage, new energy vehicles, security and consumer electronics.

In 2023, the company's operating income was 4.07 billion yuan, a year-on-year increase of 26.42%, and its net profit was 320 million yuan, a year-on-year decrease of 20.68%. The company previously stated in an institutional survey that from the first quarter of 2024, due to the destocking of major overseas photovoltaic customers, overseas photovoltaic energy storage has dropped significantly year-on-year, which has directly affected the operating conditions in the first quarter. Both operating income and profit in the first quarter decreased compared with the same period last year, of which operating income decreased by 42.84% compared with the same period last year, and the net profit loss was 19.32 million yuan, and the loss after deducting non-operating items was 22 million yuan.

Minglida said that the company's internal target for 2024 is to maintain at least 10% growth. Despite the pressure in the first quarter, it is expected that there will be continuous improvement on a month-on-month basis as the business recovers. The goal of the photovoltaic energy storage business is to maintain last year's level and try not to fall. The automotive business is expected to maintain good growth, especially in new production projects for major overseas and domestic customers. The security business is expected to grow slightly, and the consumer electronics business is expected to remain the same or increase slightly.

The company said that the focus of future investment and business development will be mainly overseas. Overseas markets are the focus of the company's investment and business growth in the next 3 to 5 years.

However, the destocking situation seems to have improved recently. On August 12, the company responded to investors' questions through the investor interaction platform, saying that the inventory situation of the company's two largest overseas solar storage customers is gradually returning to normal levels as destocking progresses. Since June, the customer's order volume has been gradually recovering. The specific recovery schedule depends on the customer's destocking and terminal market demand.

The company disclosed in the repurchase plan announcement that as of March 31, 2024, the company's asset-liability ratio was 52.42% and the current ratio was 201.15%. The repurchase of shares will not have a significant adverse impact on the company's debt repayment ability. The company's business development is stable and the cash flow from operating activities is healthy; as of March 31, 2024, the company's consolidated monetary funds balance is 508 million yuan, which is relatively sufficient. The company has sufficient self-owned funds to pay the total amount of the share repurchase price of 160 million yuan.

Source: Shanghai Securities News

Column Editor: Zhang Wu Text Editor: Li Linwei Title Image Source: Shangguan Title Image Image Editor: Yong Kai

Source: Author: Shanghai Securities News