Key Takeaway

The company launched its 2026 restricted stock incentive plan, proposing to grant 6.6558 million shares to 78 directors, senior management, middle management and core technical (business) personnel, representing 1.04% of total share capital. The plan uses net profit attributable to shareholders of the parent company as the core assessment metric. The targets for 2026-2028 are for growth of no less than 10%, 21% and 33% respectively compared with 2025, corresponding to a three-year compound growth rate of approximately 10%, reflecting the company's development objective of driving profit recovery and steady growth. Phase IV capacity is currently entering the release stage and construction of the Phase V high-end equipment project has commenced. The high-end product and capacity development continues to advance, providing support for medium- to long-term development.

Event

On 27 July 2026, Neway CNC released a draft restricted stock incentive plan, proposing to grant 6.6558 million Class II restricted shares to 78 incentive recipients at RMB7.34 per share in a single tranche with no reserved portion. The shares will vest in three phases at a ratio of 50%, 30% and 20%.

Risks

(1) Equity incentive assessment targets may not be met: if downstream manufacturing demand, market competition or the improvement in the company's profitability falls short of expectations, some restricted shares may not vest;

(2) High-end product R&D and market expansion may fall short of expectations: the R&D of high-end CNC machine tools such as five-axis simultaneous machining and turn-mill compound machines is highly challenging. If progress in product performance enhancement, customer validation and volume sales falls short of expectations, it may affect the company's advancement into the high-end segment and product mix optimization;