Core viewpoints

The performance growth is in line with expectations. in 2021, the company achieved operating income of 3.757 billion yuan, an increase of 7.82% over the same period last year. The net profit attributed to the shareholders of the parent company was 393 million yuan, an increase of 33.55% over the same period last year, deducting 249 million yuan of non-parent net profit and-51.36 million yuan in the same period in 2020.

Seize the new energy sanitation market opportunities, price for volume performance growth. In 2021, the operating income of the company's sanitation equipment was 1.6 billion yuan, an increase of 33.17% over the same period last year, and the gross profit was 460 million yuan, an increase of 18.8% over the same period last year. Of this total, the operating income of new energy sanitation equipment was 738 million yuan, an increase of 18.5% over the same period last year. In 2021, the company sold 4450 units of sanitation equipment, an increase of 64.15% over the same period last year. Among them, new energy sanitation equipment accounted for 28.72% of 1278 units, an increase of 41.84% over the same period last year, and its market share reached 28.5%, ranking first in the industry. The average sales price of new energy sanitation equipment is-22% compared with the same period last year, and the average sales price of traditional sanitation equipment is-17% compared with the same period last year, resulting in a decline in overall gross profit margin-3.4pct to 28.5%.

The steady growth rate of newly signed orders for sanitation services far exceeds the industry average, with annual orders-on-hand reaching 760 million. In 2021, the company's sanitation service revenue was 610 million yuan, a year-on-year increase of 22.57%, a gross profit of 120 million yuan, a year-on-year increase of 26.24%, and a gross profit margin of + 0.7pct to 24.4%. In 2021, the contract value of the national sanitation market-oriented bid opening project was 216.3 billion yuan, with an annual value of 71.6 billion yuan, an increase of 4.4% over the same period last year. Among them, the annualized value of the Aolande bid-winning project reached 191 million yuan, and the annual number of sanitation service projects in operation reached 760 million, an increase of 20.4% over the same period last year. The growth rate far exceeds that of the industry.

Affected by the prosperity of the real estate industry, construction machinery is under short-term pressure. In 2021, the company's construction machinery revenue reached 1.349 billion, down 7.88% from the same period last year, gross profit decreased by 400 million yuan, down 12.46% from the same period last year, and gross profit margin decreased by 1.55pct to 29.81%. It was mainly affected by the decline of the domestic real estate industry and the slowdown in fixed asset investment in 2021. The company continues to promote product iteration, new energy rotary drilling products, new energy mining vehicles have rapidly formed a number of market breakthroughs. Continue to be optimistic about the operating capacity of the company, as well as the profit potential brought by the recovery of downstream prosperity.

Profit forecast and investment suggestion

We estimate that the return net profit of the company in 22-24 is 445 million yuan (500 million yuan). The profit forecast is mainly due to the impact of the epidemic, and the government expenditure on sanitation is lower than expected. The estimated earnings per share is 0.83 qqq1.09 yuan, of which the 22-year net profit of new energy sanitation vehicles is 192 million yuan (22-year PE24x), construction machinery, traditional sanitation equipment and services are 253 million yuan (22-year PE12x), and the target price is 14.17 yuan.

Risk hint

New energy sanitation vehicle procurement demand decline risk, penetration increase less than expected risk, sanitation service order decline risk.