Longma Sanitation (603686): Third quarter revenue maintains high growth. Annual sanitation service contract value exceeds 2.5 billion yuan.

Longma Sanitation (603686): Third quarter revenue maintains high growth. Annual sanitation service contract value exceeds 2.5 billion yuan.
Event: The company released the third quarter report of 2019 on the evening of October 28, 2019, and the company achieved operating income of 30 from January to September 2019.24 ppm, an increase of 21 per year.74%, net profit attributable to mothers1.99 ppm, an increase of 0 per year.11%. Looking at the third quarter alone, the company achieved operating income11.1.3 billion, an increase of 27 every year.14%, net profit attributable to mother is 0.76 ‰, an increase of 19 per year.75%. The growth rate of sanitation equipment revenue picked up, and sanitation service revenue maintained a high growth.The company’s main business income on January 9, 201929.96 ppm, an increase of 21 in ten years.91%, of which sanitation equipment income is 17.53 ppm, an increase of 0 per year.92%, accounting for 58 of the company’s main business income.50%; company sanitation service business income 12.44 ppm, a 72-year increase of 72.47%, accounting for 41 of the company’s main business income.50%.Looking at the third quarter alone, sanitation equipment revenue was 6.29 ppm, an increase of 5 per year.7%, sanitation services income 4.75 ppm, an increase of 68 per year.9%. Profitability is stable, and cash flow has improved in ten years.The company’s consolidated gross profit margin was 25 on January 9, 2019.29%, increasing by 0 every year.46 points, the net profit rate attributable to mother reached 6.59%, a decrease of 1 per year.42 points.Just look at the company’s gross profit margin in the third quarter of 25.23%, an increase of 0 every year.69pct, down from the chain.56 points, the net profit rate attributable to mother reached 6.84%, a decline of 0 every year.42pct, an increase of 0 from the previous month.07pct; the company’s sales expense ratio, management expense ratio, and R & D expense ratio in the third quarter were 7, respectively.91%, 4.85%, 1.21%. The change in the expense ratio was mainly due to the increase in sales staff salaries, business entertainment fees, listing testing fees, marketing service fees and advertising expenses, as well as increased sanitation service items.From the perspective of cash flow, the company’s net operating cash flow in the third quarter was -0.94 trillion, -1 earlier Q3.10 trillion improved, net cash flow from January to September -3.27 ppm, up from -6 in the same period in 2018.210,000 yuan obviously improved. The total amount of service contracts in the first three quarters exceeded 10 billion yuan, and future services are expected to continue to grow.In the first three quarters of 2019, the company won an 深圳桑拿网 annual contract amount of 10 for sanitation service projects.110,000 yuan, the total contract amount is 103.9.3 billion.As of October 28, 2019, the annual contract amount of the company’s on-hand sanitation service project was 25.06 million, the total contract amount is 249.7.2 billion.(Including contract extension service contract amount and government procurement bidding project contract amount).Among them, the Dingyuan County Rural Domestic Waste Treatment Franchise Project, the Sanya Yazhou District Environmental Sanitation Integration Project, and the Tianjin Beichen District and Wuqing District Domestic Waste Classification Service Projects have all taken over the operation.The urban-rural sanitation integration project and the social service projects for cleaning and cleaning and garbage collection and transportation of roads and waters in the towns, farms (forests), parks and parks of Quzhou City are entering the preparation stage. profit prediction.The company’s sanitation service revenue has maintained a high growth, while new signings and orders in hand are abundant. We believe that with the development of market-oriented sanitation services, the company’s sanitation service business space will gradually open.Taking into account the company’s financial costs and credit impairment losses, we have made fine-tuning of performance forecasts. It is expected that the company’s diluted EPS for 2019-2021 will be 0.64, 0.75, 0.87 yuan / share, the company’s closing price on October 28, 2019 11.49 yuan per share, corresponding to our forecast of 17-20 PE in 2019-2021.95, 15.32, 13.21 times.Based on the situation of comparable companies, 16-20 times PE in 2019 will be given, corresponding to a reasonable value range of 10.24-12.80 yuan, given the “primary market” investment rating. Risk reminder: The development of the sanitation industry is less than expected, the accounts receivable increase, and the gross profit margin decreases.