Guotai Junan: YIXIN (02858) rated as "buy" with a target price of HKD 2.45.

Guotai Junan released a research report stating that it has adjusted YIXIN's (02858) revenue for the years of 2025-2027 to be 115.64/132.93/150.42 billion yuan (previously 115.64/131.95/148.27 billion yuan), with a year-on-year growth of 17%/15%/13%. The adjusted net profit is 11.34/13.86/16.98 billion yuan (previously 11.34/13.25/15.64 billion yuan), with a year-on-year growth of 40%/22%/23%. Considering the company's fast performance growth, the company is given a 11x P/E for 2026, corresponding to a target price of 2.45 Hong Kong dollars, and a "hold" rating. The company's high stock incentive performance targets demonstrate confidence in the company, with the acceleration of the used car industry and the decrease in funding costs under the asset shortage, the prospect for the company's growth remains positive. Guotai Junan's main points are as follows: Stock incentives bind core personnel to company interests, stimulating team motivation On March 25, YIXIN announced that, based on the 2024 share plan implementation of stock incentives, 101,363,921 share options and 67,575,947 share rewards were granted to Chairman Zhang Xuan and 25,800,000 share options and 17,200,000 share rewards were granted to Co-CEOs, representing approximately 2.50% and 0.64% of the issued shares respectively. Twenty-four million share options and 131.78 million share rewards were granted to 3 and 213 other employees, respectively. The exercise price of the share options is 1.694 Hong Kong dollars per share. This stock incentive allows employees to benefit from the appreciation of shares, stimulating employees to improve company performance, promote long-term stable development, and enhance the company's competitiveness in the industry. High performance assessment targets demonstrate company confidence According to the performance assessment targets corresponding to this stock incentive, if the adjusted net profit reaches above 3 billion Hong Kong dollars within the 5-year vesting period, the full stock incentive will be granted. Two-thirds of the stock incentive can be received for a net profit of 2.5-3 billion Hong Kong dollars, one-third for 2-2.5 billion Hong Kong dollars, and no stock incentive for profits below 2 billion. The company's stock incentive target is high, and based on a net profit of 3 billion Hong Kong dollars adjusted for 2029, the compound growth rate for 2025-2029 is approximately 21%, demonstrating the company's confidence in future performance, and continuing to be optimistic about the company's growth. Catalyst: Rapid growth in the automotive finance market, continued decline in funding costs.