Downgrade profit forecast and maintain "overweight" rating
Yutong heavy Industry released semi-annual report that in 2023, H1 realized revenue of 1.365 billion yuan (yoy-15.09%), net profit of 96.74 million yuan (yoy-42.08%), and deducted non-net profit of 47.3 million yuan (yoy-57.61%). Among them, Q2 realized revenue of 738 million yuan (yoy-14.98%,qoq+17.59%) and net profit of 67.44 million yuan (yoy-17.87%,qoq+130.18%). With the intensification of competition in the sanitation equipment market, we downgrade the sales volume and gross profit margin of Yutong equipment. It is estimated that the company's EPS in 2023-2025 will be 0.55,0.62,0.68 yuan respectively (the previous value is 0.72,0.82,0.92 yuan in 2023-2025). Comparable company's 23-year Wind unanimously expected the average PE to be 15.1 times. Considering the obvious advantages of the company's new energy sanitation vehicles and mining vehicles, the company was given a 23-year 18.1 times PE, with a target price of 9.96 yuan (the previous value was 11.66 yuan), maintaining the "overweight" rating.
Yutong New Energy Sanitation vehicle market accounts for 16% of the market, and the policy target is 80% of new energy penetration. According to CNAC data terminal retail data, 1H23 China has 41000 sanitation vehicles (yoy-7.8%), of which 2469 are new energy vehicles (yoy+21%), with a new energy penetration rate of 6.1%. The number of cities requiring more than 10 new energy has expanded from 27 in the first half of 2022 to 38 in the first half of 2023, an increase of 40.7% over the same period last year. Yutong heavy Industry Sanitation vehicle Insurance 1305 (1H22:1912), of which 401 new energy vehicles (1H22:622), market share of 16%. The goal of the electrification policy of the Ministry of Industry and Information Technology is 80% of the new energy penetration in the leading area, and the company has the advantages of differential competition and "chassis + top" supply chain coordination. We are optimistic about the performance of Yutong heavy Industry in the new energy wave of sanitation.
Focusing on the high-quality regional market, the annualized amount of new sanitation contracts is-11% compared with the same period last year. According to the statistics of the Environment Department, the company is the largest sanitation service enterprise in Henan Province, mainly provided by its subsidiary Aolande. 1H23 sanitation service revenue is 291 million yuan, + 12% compared with the same period last year. Focusing on the high-quality regional market, the company successfully won contracts such as 1.2 billion Zhengzhou Economic and technological Development Zone Environmental Sanitation and Greening Integration Project (in the form of consortium) and 260 million Zhengzhou Upper District Sanitation Project. The company's 1H23 added an annual contract of 278 million yuan (1H22:3.14 billion yuan), and the sanitation service contract in operation included an annual tax amount of 877 million yuan (1H22:8.81 billion yuan). In the second half of the year, the company will optimize business layout, strengthen accounts receivable management, and form a new low-carbon intelligent sanitation service model.
New energy mining vehicles and construction machinery maintain strong competitiveness
The company took the lead in promoting new energy mining vehicles in 2018 and is currently the number one brand in China. Compared with fuel-fired vehicles, the energy consumption cost of pure electric mining vehicles is reduced by more than 70%. The company's products have been in batch operation or trial operation in more than 100 mining areas in 28 provinces across the country, with a cumulative operating mileage of more than 30 million km, a maximum operating mileage of more than 200000 km and operating days of more than 2000 days. In terms of construction machinery, the company's main products such as new energy rotary drilling, dynamic compaction and bridge inspection vehicles all maintain strong competitiveness.
Risk hint: the sales of sanitation equipment are not as expected, the competition in the sanitation service market is intensified, and the sales growth of mining vehicles is not as expected.