Shougang Fushan Resources Group Limited (Shougang Resources, HKEX: 00639) has released the draft details of its 2026 Share Option Scheme, designed to strengthen long-term incentives for key staff and align management interests with shareholders.
Key Parameters • Total Options: Up to 48.47 million share options, representing 0.95% of the company’s 5.09 billion issued shares. • First Grant vs. Reserved Grant: 43.36 million options (0.85% of share capital) allocated to a maximum of 111 participants at launch; 5.11 million options (0.10%) reserved for up to 10 additional employees within 12 months. • Participants: Executive directors, senior management and core technical or business personnel; municipal officials, external directors and shareholders holding ≥5% are excluded. • Scheme Term: Six years from shareholder approval. Vesting periods of 24, 36 and 48 months; options exercisable in three tranches of 33%, 33% and 34%. Unexercised options lapse after 60 months from grant. • Exercise Price: Set at the highest of (1) the closing price on the grant date, (2) the 5-day average closing price before grant, or (3) par value. A simulated example cites HKD 2.69 per share; final pricing will be fixed on the actual grant date. Price and quantity will adjust for corporate actions (bonus, rights, splits, etc.).
Performance & Individual Hurdles Exercise requires meeting both company-wide and individual targets: • Company metrics (vary by year/tranche) include minimum ROE (3.2%–7.2%), cumulative profit thresholds (HKD 0.85 billion to HKD 3.76 billion), rising per-capita coal output (≥1,430 to ≥1,520 tonnes/employee), intelligent-mine ratings, and zero major safety incidents. • Individual exercise ratios scale from 100% to 0% based on annual performance ratings (A to E).
Governance & Compliance • The general meeting is the ultimate approving body; Beijing SASAC consent is required. • Independent non-executive directors will opine on grants and exercises; the Remuneration Committee oversees implementation. • The company will not provide loans or guarantees to participants for option exercises.
Financial Impact Estimate Using the Black-Scholes model, the first-grant tranche (43.36 million options) carries an indicative fair value of approximately HKD 9.97 million (HKD 0.23 per option). Estimated amortisation (assuming a 15 September 2026 grant) is HKD 0.36 million in 2026, HKD 3.59 million in 2027, HKD 3.10 million in 2028, HKD 1.62 million in 2029 and HKD 0.60 million in 2030. Management expects the performance benefits of the scheme to offset the non-cash expense.
Next Steps Following Beijing SASAC approval, Shougang Resources will seek shareholder endorsement, after which the board will confirm the grant date and complete registration and disclosure formalities.