Won the bid for Shenzhen Sakata Street City Butler Project, with a total contract amount of about 980 million yuan:
On December 15, 2021, the company successfully won the bid for the city butler service project in Sakantian Street, Longgang District, Shenzhen City, Guangdong Province. it is estimated that the total contract amount is about 978 million yuan, the contract period is 5 years, and the annual service fee is 196 million yuan. the scope of service covers the whole district of Sakata street. The scope of services include municipal cleaning and cleaning, refuse removal / transfer station management, public toilet management, deodorization equipment management of refuse transfer stations, road greening / greenway / park management and other sanitation services.
The sanitation project has won the bid continuously, and the future performance growth can be expected:
Following Shenzhen Sakata Dadan, the company recently announced that it has won the bid for the procurement project of integrated urban and rural sanitation services in Anyue County, Ziyang City, Sichuan Province. it is estimated that the total value of the contract is about 152 million yuan, the contract period is 3 years, and the annual income is expected to reach 50.55 million yuan. According to preliminary statistics, the total contract for sanitation projects won by the company in 2021 reached 2.144 billion yuan, with an additional annual income of about 376 million yuan, which continued to contribute to the steady growth of the company's performance.
The demand for sanitation increases under the "normalization" of the epidemic:
Under the "normalization" of the epidemic situation, remarkable achievements have been made in the prevention and control of the domestic epidemic situation, but local outbreaks occur from time to time. Therefore, it is very important to do a good job in urban environmental sanitation. We believe that under the "normalization" of the epidemic, the society has higher requirements for high-quality, high-standard and fine sanitation services. as a mature enterprise in the deep ploughing industry for many years, the company can not only continue to provide professional and high-quality sanitation services for the market, but also enhance fine management capacity by continuously increasing mechanization and intelligent investment, and have the ability to cope with market changes, with the improvement of national sanitation service demand. The marketization process is accelerated, and the company's performance is expected to achieve sustained and steady growth.
Maintain the buy rating with a target price of HK $0.83:
Combined with the company's profit forecast and industry valuation, we update the company's target price of HK $0.83, which is equivalent to 6.0x and 4.6x PE of the company in 2021 and 2022. the target price has 32% room to rise from the current price and maintains the "buy" rating.