Shenzhen-based cross-border e-commerce leader Huakai Yibai has launched an ambitious employee stock ownership plan, offering core staff the opportunity to purchase company shares at half price. This initiative represents more than just employment—it's a chance for employees to share in the company's growth and wealth creation.
Strategic Transformation: From Spatial Design to E-Commerce Powerhouse
Originally known as Huakai Creative, the company specialized in spatial art design for exhibitions and showrooms. Demonstrating keen market insight, Huakai Creative acquired cross-border e-commerce platform Yibai Network, completing a strategic pivot. The company has since rebranded as "Huakai Yibai," marking Yibai Network's effective backdoor listing and ushering in a new era.
Yibai Network has emerged as a top player in China's cross-border e-commerce sector, reporting 4.756 billion yuan in revenue and 159 million yuan in net profit for 2021. In the first half of 2022 alone, it generated 106 million yuan in net profit, becoming the listed company's primary profit driver.
Generous Terms: Half-Price Shares for Select Employees
The employee stock plan targets no more than 15 key personnel currently contributing directly to Yibai Network's operations. Participants can acquire shares at 7.36 yuan per share—50% below the 20-day average trading price prior to the plan's announcement.
This substantial discount aligns employee interests with corporate performance while fostering entrepreneurial spirit among participants. However, full realization of these benefits requires meeting stringent performance benchmarks.
Performance-Based Vesting with Safeguards
The plan features a two-year vesting schedule beginning 12 months after share allocation. Full vesting of the first tranche requires Yibai Network to achieve at least 270 million yuan in adjusted net profit for 2022, with partial vesting available for partial achievement.
The second tranche presents greater challenges, requiring 570 million yuan in 2023 adjusted net profit for any vesting to occur. This ambitious target reflects management's confidence in the company's growth trajectory while motivating employees to drive performance.
Notably, the plan includes capital protection. For unvested shares, the company will sell them and return either the original investment plus interest or the sale proceeds—whichever is lower—effectively guaranteeing participants' principal.
Financial Commitment and Growth Projections
The incentive program carries significant financial implications, with the listed company anticipating approximately 58.08 million yuan in expense amortization over three years.
Yibai Network's financial projections underscore the plan's rationale:
- 2021: 159 million yuan net profit
- 2022 Target: 270 million yuan
- 2023 Target: 600 million yuan
These forecasts suggest near-100% annual growth, highlighting management's bullish outlook for the cross-border e-commerce sector and providing a solid foundation for the equity incentive scheme.
Industry Implications
As a leading cross-border e-commerce operator, Huakai Yibai's confidence in its growth prospects signals broader sector optimism. The employee stock plan not only serves as an internal retention tool but also demonstrates the company's commitment to sharing success with key contributors.
The initiative represents a rare opportunity for industry professionals to participate directly in a high-growth e-commerce enterprise's equity upside while benefiting from principal protection—an unusual combination in employee stock programs.