Main points of investment:
The company manufactures leaders for sanitation equipment, focusing on the coordinated development of sanitation services and equipment. The company is the double leader of sanitation equipment and sanitation service. The actual control of the company is Mr. he Jianfeng, the son of Mr. Midea he Xiangjian, with a strong shareholder background and strong financial strength. The company issues three-phase equity incentive and two-phase employee stock ownership plan, which will effectively stimulate employee motivation.
The short-term fluctuation of the sanitation industry does not affect the long-term development logic, and the future "marketization + integration + intelligence + low carbon" will push the industry into a new stage of development. 1) urbanization + marketization: it is estimated that the market space of the three traditional sanitation projects, including road cleaning, garbage removal and public toilet maintenance, will reach about 250 billion in 2025. 2) Integration: continue to expand the depth and breadth of sanitation services, including service content integration (the development of integrated urban management is expected to double the target market space), urban and rural sanitation integration (to township sanitation, improve sanitation market space), industrial chain integration (integration of garbage collection, storage, transportation and end treatment, expand service links, improve service efficiency). 3) Mechanization and intelligence: promote the industry to reduce costs and increase efficiency, and create new demand for sanitation equipment. Among them, the promotion of mechanization can reduce the labor cost, and the sales of sanitation vehicles have exceeded 100,000 vehicles per year in the past 4 years, and the corresponding market space is about 30 billion yuan per year. Intelligence will optimize the efficiency of project management, achieve service standardization and replicable management, improve the profitability of the project, and contribute to the government's real-time and effective supervision of sanitation services, which will lead to the outbreak of intelligent equipment market. 4) low carbon: the national plan requires that from 2021, the proportion of new energy vehicles in new sanitation vehicles in key areas will not be less than 80% of the total electrification in 2035. In 2021, the penetration rate of China's sanitation equipment new energy industry is only 3.97%, and there is a huge space for the future.
There are significant advantages in sanitation equipment, and sanitation services are growing rapidly. 1) the company has a solid advantage in traditional sanitation equipment. In 2021, the total sales of equipment was 16521, with a market share of 15.79%, ranking first in the industry for 21 consecutive years. At the same time, the company's new energy and sanitation robots are developing rapidly. 2) benefiting from the promotion of the marketization of sanitation and the national layout in the field of sanitation machinery, the company's new annualized contract value of sanitation services in 2021 was the second in the industry. In recent years, the CAGR of sanitation services reached 70%, ranking first among comparable companies. The company released the core strategy of the "5115-year Plan" with a target of 10 billion yuan in sanitation service revenue by 2024. 3) hydrogen energy sanitation vehicle orders continue to be released, and the company won the first 10 million hydrogen energy order in the country last year, and another 2786 million hydrogen energy order in Jingzhou this year, and the hydrogen business is ready to start. 4) the development of the company's other business (environmental monitoring and solid waste, etc.) is stable, and its junior college shares are being split and listed, and its capital strength will be further strengthened in the future to promote the continuous expansion of the business.
Profit forecast and valuation: we expect the company's return net profit from 2022 to 2024 to be RMB 999,1.94 million, and the current market capitalization corresponding to PE valuation is 20-16-14 times. The average valuation of comparable companies in 2022 is 20 times PE. Considering that the company is the double leader of sanitation equipment and sanitation services, the synergy benefit of "equipment manufacturing + service" is obvious, the future performance growth of the company is more certain, and the company has obvious first-mover advantages in the field of hydrogen energy sanitation vehicles, and the future is expected to usher in rapid growth, taking into account, we give the company 22 times PE valuation premium, covering for the first time and giving "overweight" rating.
Risk hints: traditional sanitation equipment has the risk of slow down in procurement and impairment of goodwill; short-term competition in sanitation services aggravates the risk.