联合水务：深耕水务二十载，乘“一带一路”东风前行

Investment Rating - The report initiates coverage on the company with a "Hold" rating and sets a target price of 12.25 CNY per share [6][84]. Core Views - The company is a comprehensive water service provider with a focus on water supply, sewage treatment, and water resource recycling, boasting a processing capacity of approximately 2.7 million cubic meters per day as of June 2024 [1][15]. - The company is actively expanding into international markets, with a notable investment in a water supply operation in Dhaka, Bangladesh, which has a designed capacity of 340,000 cubic meters per day [2][43]. - There is an expectation for price increases in water services, alongside a reduction in leakage rates, indicating further growth potential in the sector [3][50]. Summary by Sections 1. Comprehensive Water Service Platform - The company has developed a complete water service industry chain from source to tap, with a focus on municipal engineering and ecological restoration [1][18]. - The company has maintained a compound annual growth rate (CAGR) of 15.49% in revenue from 2018 to 2023, despite challenges in net profit growth during 2020-2022 due to a decline in new construction in the real estate sector [20][28]. 2. Expansion into Overseas Markets - The company has established 26 operational companies across various provinces in China and has invested in a water supply operation in Dhaka, Bangladesh, which will serve a population of 2 million [35][43]. - The annual water sales volume from 2020 to 2023 has shown consistent growth, with 2023 seeing a year-on-year increase of 7.88% [2][37]. 3. Price Increase Expectations and Leakage Rate Reduction - Water pricing in key cities has increased from 1.91 CNY per ton in March 2013 to 2.35 CNY per ton by March 2024, reflecting a CAGR of approximately 1.90% [3][68]. - The company has successfully maintained a sewage treatment gross margin of 41.43% in the first half of 2024, indicating stable profitability [2][47]. 4. Profit Forecast and Investment Recommendations - Revenue forecasts for 2024 to 2026 are projected at 1.14 billion CNY, 1.25 billion CNY, and 1.37 billion CNY, with corresponding net profits of 177 million CNY, 207 million CNY, and 239 million CNY [84]. - The report employs a price-to-earnings (P/E) valuation method, predicting a P/E of 26 times for 2025, leading to a market capitalization estimate of 5.39 billion CNY [84].