Core Insights - The trend of energy transition is significantly impacting the sanitation vehicle market, with an increasing number of electric and intelligent sanitation vehicles being deployed in cities [2][3] - The sales of new energy sanitation vehicles have shown remarkable growth, with a 43% year-on-year increase in early 2025, reaching a penetration rate of 14% [2][4] - Leading companies like Yingfeng Environment are capitalizing on this trend, reporting substantial sales growth and maintaining a dominant market share [2][6] Industry Overview - The sales of sanitation vehicles in China decreased by 5.6% in 2024, but new energy sanitation vehicle sales increased by over 55%, indicating a shift towards electric solutions [4][5] - Government policies are increasingly supporting the electrification of sanitation vehicles, with initiatives aiming to promote over 600,000 electric vehicles in public sectors [4][5] - The penetration rate of new energy sanitation vehicles is expected to rapidly approach 50% as the market matures [3][4] Company Performance - Yingfeng Environment has maintained its leadership in the industry, achieving a market share of 30.5% in 2024, with a significant increase in sales of new energy sanitation vehicles [2][6] - The company’s accounts receivable have shown stable growth, indicating a solid financial position despite challenges in the broader environmental sector [6][7] - The upcoming large-scale equipment update projects are expected to boost the sanitation industry significantly in 2025, supported by increased funding from government initiatives [6][7]

Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of RMB 12.25 [7][9]. Core Views - The company achieved a revenue of RMB 3.799 billion in 2024, representing a year-on-year increase of 30.67%, and a net profit attributable to shareholders of RMB 227 million, up 3.97% year-on-year, slightly below expectations due to increased market competition leading to a decline in gross margin [1][5]. - The company has a strong advantage in the new energy sanitation vehicle market, with a significant increase in sales, and is expected to see continued growth in performance and shareholder returns from 2025 to 2027 [1][5]. Summary by Sections Financial Performance - In 2024, the company reported a revenue of RMB 3.799 billion, a 30.67% increase year-on-year, and a net profit of RMB 227 million, which is a 3.97% increase year-on-year [1][6]. - The operating cash flow for 2024 was RMB 572 million, a substantial increase from RMB 36 million in 2023, primarily due to reductions in inventory and contract assets [4][6]. Market Position - The company’s sales of new energy sanitation vehicles grew by 77.4% year-on-year, with total sanitation equipment revenue reaching RMB 1.543 billion, a 17.2% increase [3][6]. - The penetration rate of new energy sanitation equipment reached 13.4%, up 5.3 percentage points year-on-year, indicating a growing acceptance of new energy technologies in the market [2][3]. Future Outlook - The company is expected to benefit from the ongoing trends of electrification and intelligence in sanitation vehicles, with projected EPS for 2025, 2026, and 2027 at RMB 0.49, RMB 0.57, and RMB 0.66 respectively [5][6]. - The report anticipates continued growth in new energy equipment sales from 2025 to 2027, contributing to long-term value for shareholders [1][5].