Longma Sanitation (603686): Service orders landed intensively, and new contract value exceeded 10 billion
In the third quarter, service orders landed intensively. The first year of the new contract amount was close to 1 billion yuan. On September 22, the company announced that it won the bid for the integrated urban and rural sanitation operation service project in Ledong County, Hainan Province.The term of the contract is 9 years and the annualized amount is 1.980,000 yuan, with a total amount of 17.RMB 0.86 million, paid monthly.The successful bid shows the benchmark radiation effect and market expansion ability of the company’s environmental sanitation service projects.The announcement also disclosed that as of the announcement date of September 22, the company won 43 bids for sanitation service projects in 2019, with a total annual amount of 9 in the first year.28 trillion, a total of 101 new contracts received this year.4.4 billion.In addition, the company announced on August 30 that it won the bids for domestic garbage classification projects in Beichen District and Wuqing District of Tianjin, with the bid amounts of 12.82 million yuan and 4.26 million yuan respectively.The smooth operation of the project will provide the company with experience in the efficient and stable operation of the company’s subsequent waste classification projects, and will also promote the sales of front-end domestic waste classification equipment. The leadership has completed the re-election, and the internal governance structure has been streamlined. The company announced on September 11 that it has completed the re-election of the board of directors, the board of supervisors and senior management.According to the disclosure in the 2019 semi-annual report, the company’s organizational structure adjustment was basically completed, the business development responsibilities of all business units were completely eliminated, and the employee stock ownership plan was announced.This is not only an important change for the company to improve its 杭州桑拿 governance structure, improve its incentive and restraint mechanisms, but also shows its confidence in the company’s mid- and long-term development. Investment advice We predict that the company’s EPS in 19-21 will be 0.93/1.07/1.19 yuan / share, the latest expected corresponding price-earnings ratio of 19/16/15.Considering that the intensive implementation of the company’s service orders in the third quarter will have a positive impact on the company’s current revenue, and the adjustment of the internal organizational structure will effectively ensure the key development of the waste classification business, we give the company a 19-year target PE estimate of 20 times, corresponding to a reasonable value of18 years old, 6 yuan / share, maintain “Buy” rating. Risks prompt increased competition in the equipment market; the marketization of sanitation services has fallen short of expectations; government investment has fallen short of expectations.