福龙马：新能源渗透率持续提升

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 11.68 [1][4][7] Core Insights - The company, Fulongma, is a leading player in the domestic waste management industry, driven by both service and equipment segments. The sales of new energy sanitation vehicles increased by 6% year-on-year from January to October, with a penetration rate up by 4 percentage points. The sales are expected to continue growing due to national policies promoting the electrification of public sector vehicles [1][3] - The company is expected to benefit from cash flow improvements due to debt reduction policies, which will enhance its financial statements and growth prospects [1] - The company has secured multiple sanitation service projects, with a total annual contract amount of RMB 7.55 billion for 2023, reflecting a year-on-year increase of 1% in total contract value [2] Summary by Sections Sales and Market Performance - From January to October, the sales of new energy sanitation vehicles reached 6,919 units, a year-on-year increase of 41%, with a penetration rate of 12%, up by 4 percentage points. Fulongma's own sales of new energy sanitation vehicles were 561 units, also up by 6%, with a penetration rate of 23% [3] - The overall number of insured sanitation vehicles in the country decreased by 10% year-on-year, primarily due to a decline in fuel vehicle sales [3] Financial Projections - The projected net profits for the parent company are RMB 155.16 million, RMB 209.92 million, and RMB 261.56 million for the years 2024, 2025, and 2026 respectively. This reflects a downward revision from previous estimates due to increased market competition [4][5] - The expected revenue for the company is projected to be RMB 5.15 billion in 2024, RMB 5.94 billion in 2025, and RMB 6.93 billion in 2026, indicating a growth trajectory [5][13] Valuation Metrics - The target price corresponds to a PE ratio of 22.9 times for 2025, reflecting an increase from the previous estimate of 20.2 times, indicating a positive outlook based on the company's growth in new energy sanitation vehicle penetration [4][5] - The company's market capitalization is approximately RMB 4.063 billion, with a closing price of RMB 9.78 as of December 10 [7][9]