Guotou Securities: New energy + Automation empower a new look for sanitation

According to the Zhitong Finance APP, Guotou Securities released a research report stating that the annualized transaction growth rate of the sanitation operation market will decline in the first half of 2025, while the transaction volume of new business formats will reach a record high. Among them, the transaction volume of three major new sanitation business formats—sanitation vehicle (equipment) leasing, unmanned (intelligent) sanitation, and urban housekeeper—performed well, with an annualized total transaction amount of 7.45 billion yuan, accounting for 16.4%; the total transaction contract amount reached 21.76 billion yuan, accounting for 20.5%. From an economic perspective, under the current prices of unmanned equipment, the replacement of manual labor with unmanned vehicles has significant economic advantages, and as the penetration rate of equipment increases, costs are expected to decline further. Major domestic sanitation operation companies are successively deploying unmanned equipment.

The main viewpoints of Guotou Securities are as follows:

New energy + unmanned, empowering a new look for sanitation

The annualized transaction growth rate of the sanitation operation market will decline in the first half of 2025, while the transaction volume of new business formats will reach a record high. In the first half of 2025, the total annualized transaction amount of national sanitation service projects through public bidding was 45.6 billion yuan, a year-on-year decrease of 3%, marking the largest decline in the sanitation operation industry in the first half of the year since 2015. In terms of the number of bids for franchise projects, there were 17 sanitation franchise projects bid nationwide in the first half of 2025, showing a significant decline both year-on-year and quarter-on-quarter, compared to 30 projects in the first half of 2024 and 38 projects in the second half of 2024. The transaction volume of the three major new sanitation business formats—sanitation vehicle (equipment) leasing, unmanned (intelligent) sanitation, and urban housekeeper—performed well, with an annualized total transaction amount of 7.45 billion yuan, accounting for 16.4%; the total transaction contract amount reached 21.76 billion yuan, accounting for 20.5%, setting a historical record.

Aging population + rising labor costs, unmanned solutions are an important way to address labor shortages

In the traditional sanitation operation model, labor costs account for over 60%. With cities frequently adjusting the minimum wage in recent years, the operating costs of urban service enterprises have further increased. Additionally, by the end of 2024, the elderly population in China had reached 310 million, accounting for 22% of the total population, and the aging trend will increase the labor shortage pressure in the urban service sector. The diversification of employment choices has led to a decreasing number of young laborers willing to engage in sanitation work, making the improvement of sanitation mechanization imperative.

According to Environmental Compass, there were over 200 procurement projects for unmanned intelligent sanitation equipment and services in the first half of 2025. In the "sanitation + unmanned" sector, 102 "sanitation + unmanned pilot" projects were bid in 15 provinces nationwide in the first half of the year, with a total contract amount exceeding 7 billion yuan, requiring the procurement of 347 unmanned sanitation vehicles, accounting for 80% of the total procurement volume of unmanned sanitation equipment that has been bid in the first half of the year.

Accelerated development of unmanned sanitation

From an economic perspective, under the current prices of unmanned equipment, the replacement of manual labor with unmanned vehicles has significant economic advantages, and as the penetration rate of equipment increases, costs are expected to decline further. Major sanitation operation companies are successively deploying unmanned equipment:

For example, Yingfeng Environment officially launched the intelligent connected cleaning robot "Swarm" in April 2025—using the "Swarm" intelligent cleaning robot fleet as the execution terminal and the "Hive" intelligent central platform as the decision-making brain, constructing a three-dimensional intelligent sanitation ecological system covering closed scenarios to open road networks, and from single-machine intelligence to cluster collaboration; Yutong Heavy Industry has jointly developed unmanned sanitation vehicles with leading companies such as WeRide to jointly promote the commercialization and operational implementation of unmanned driving QiaoYin Co., Ltd. collaborates with the National and Local Center to build humanoid robots, becoming the first officially announced company in the urban service industry to cooperate with the "national team" of the humanoid robot industry; EIT's wholly-owned subsidiary Yushu Intelligent has received investment from Zhiyuan Robotics, which is expected to create a strong alliance and accelerate the application progress of unmanned equipment in the sanitation field.

Risk Warning

Policy advancement may fall short of expectations, project production progress may lag behind expectations, risks of large-scale unlocks, risks of subsidy reductions, and product price declines may not meet expectations