The target price is 10.71 yuan, maintaining the “increase in holdings” rating
The battle to protect the blue sky is a top priority in the fight against pollution. Improving air quality, speeding up the formation of a green and low-carbon production lifestyle, and promoting high-quality economic development are related to a win-win situation of environmental, economic and social benefits. National level policies continue to gain strength and accelerate the electrification of sanitation vehicles. Yutong Heavy Industries is expected to benefit fully. We expect the company's net profit from 2023-2025 to be 2.41/2.85/330 million yuan respectively. Comparable to the company's 2024 Wind unanimously forecast the average PE value of 16.8 times. Considering the obvious advantages of the company's new energy sanitation vehicles and mining vehicles, we gave the company 20.2 times PE in 2024, with a target price of 10.71 yuan (previous value of 9.01 yuan), maintaining the “increase in holdings” rating.
The policy continues to gain strength. The market space for new energy sanitation vehicles in 24-25 is expected to reach 9.7 billion yuan/December 7. The State Council issued the “Action Plan for Continuous Improvement of Air Quality”. The key regions include Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta, and the Fenwei Plain. The document proposes to accelerate the improvement of the level of motor vehicle cleaning, and add no less than 80% of new energy for sanitation vehicles in key regions. On November 13, the Ministry of Industry and Information Technology launched the first batch of comprehensive electrification pilots to accelerate the electrification of sanitation vehicles. Huatai's December 13 report “Yingfeng Environment: Equipment/Services Work Together, Leading the Formulation of International Standards” estimates the market space for new energy sanitation vehicles. In 24-25, the national sales volume was about 16,700 units/year, corresponding to a market space of about 9.7 billion yuan/year. We believe that the penetration rate of new energy for the company's sanitation vehicles is high and is expected to benefit from market expansion.
Sanitation vehicle sales were under pressure in the short term. The company's new energy penetration rate in January-November increased 7 percentage points year on year. According to the Banking Insurance Regulatory Commission's sanitation vehicle insurance data, in January-November, 71,000 sanitation vehicles were insured, -6% year on year, new energy sanitation vehicle sales volume was 5142 units, +14% year on year, penetration rate 7.2%, up 1.3 percentage points year on year; Yutong Heavy Industries sanitation vehicle sales increased 2,333 vehicles, -17% year over year, penetration rate increased 7 percent year over year; Yutong Heavy Industries also sold 2,333 vehicles. Percentage points.
Executives actively increase their holdings and show confidence in development
Based on confidence in the company's future development prospects and recognition of the long-term investment value of stocks, Mr. Dai Lingmei, the company's chairman and general manager, increased his holdings of the company by 4.54 million shares through centralized bidding from November 8, 2023 to December 7, 2023, accounting for 0.84% of the company's total share capital, and the increase in holdings was RMB 43.5054 million. As of December 8, Mr. Dai Lingmei held 11.55 million shares of the company, accounting for 2.13% of the company's total share capital. We believe that the active increase in holdings of senior management shows confidence in the company's development, which is expected to improve management efficiency.
Risk warning: Sales of sanitation equipment fell short of expectations, competition in the sanitation service market intensified, and sales of mining vehicles fell short of expectations.