Longma Sanitation (603686) incident review: sanitation service orders continue to break through demand for waste sorting equipment
Event: The company announced on the evening of June 18: The company won the bid for the Anyang High-tech Environmental Sanitation Integration Project of the Municipal Management Office of Anyang High-tech Zone in Henan Province. The project contract period is 30 years and the annual contract amount is 4471.820,000 yuan / year, the total contract amount is 13.4.2 billion.We comment as follows: Win the bid for the Anyang High-tech Zone Sanitation and Integration Project, and the sanitation service order continues to break through the press release. The Anyang Emerging Industrial Development Zone Municipal Management Office of the Anyang High-tech Sanitation Integration Project won the bid., The small-scale advertisements on the surface of buildings, municipal facilities, etc. within the ownership scope of the high-tech zone are clear, the project period is 30 years, and the annualized contract amount is 4471.820,000 yuan / year, the total contract amount is 13.4.2 billion.This project is the company’s follow-up Anyang (demonstration area) environmental sanitation integration project (annual contract 30.32 million yuan / year, the total contract amount of 9).The second project that won the bid in Anyang City after the bid was awarded has expanded the company’s market influence in Anyang and even Henan Province, which is conducive to obtaining more market orders.In the current process of continuous advancement of sanitation 杭州夜网论坛 marketization, the company combines brand advantages and continues to make breakthroughs in sanitation service orders. Until now, the company has successfully won 28 new sanitation service projects in 2019, totaling the annual amount for the first year.With a contract value of US $ 5.1 billion and a total contract value of US $ 7 billion, the company currently has an annualized contract of sanitation service contracts of nearly US $ 2 billion and a total contract value of more than US $ 26 billion. The excess orders in hand provide guarantee for the company’s performance growth. The garbage classification policy has been increased, and equipment needs have increased. The company will fully benefit from the relevant “Notice on Comprehensively Carrying Out Domestic Waste Classification Work in Cities at and Above the 武汉夜网论坛 National Level” issued by the Ministry of Housing and Construction and other ministries in June 2019. By 2020, 46Domestic garbage classification and processing system basically built in key cities; by 2025, domestic garbage classification and processing system basically built up in cities at the prefecture level and above, the waste classification policy will be enhanced, and it is expected that waste classification will be gradually promoted throughout the country, and the demand for sanitation equipment will beAs a leading sanitation equipment company, the company will benefit fully from lifting, especially wet waste collection and transportation equipment. Earnings forecast and investment rating: Maintain the company’s “overweight” rating.In 2018, due to the weakening of the government’s solvency and corporate financing difficulties and other factors, the output of sanitation equipment decreased. We lowered the company’s profit forecast and expected the company’s 2019-2021 EPS to be 0.94, 126.96.36.199 yuan, corresponding to the current expected PE of 18, 14, 12 times, but with the recent increase in waste classification policies, the industry’s prosperity has increased, and the company’s valuation is at the average level of its peers. Therefore, the company maintains an “overweight” rating. Risk reminders: the risk of intensified competition for sanitation equipment, the risk of slow progress of sanitation service projects, the risk that the progress of orders in hand is less than expected, the risk of slow progress of garbage classification policy, and the risk of macroeconomic downside.