Water conservancy starts to accelerate pipeline stocks to reach the market of one hundred billion

Abstract: Water investment has doubled, and the “12th Five-Year” PCCP (pipeline) industry has reached the market of one hundred billion. The "Twelfth Five-Year Plan" for water conservancy investment is expected to reach 1.8 trillion, which is as high as 2.8 trillion according to the planning investment statistics in various regions. With the increase in water investment, the demand for PCCP industry is expected to explode. According to 26.2% of total investment in pipeline investment, the pipeline demand is about 235.8 billion yuan. It is expected that the demand for PCCP will exceed 100 billion yuan, with an annual average of over 20 billion yuan, an increase of nearly 170% over 10 years.

The implementation of funds helped the project start, and orders are expected to be gradually transformed into performance. Although water conservancy investment in 2011 reached 345.2 billion yuan, a record high, PCCP industry orders have also increased accordingly, but affected by the implementation of funds, large-scale water projects started to slow down, the 2011 performance of listed companies was lower than market expectations. In 2012, the investment in water conservancy will increase again, with plans to invest more than 480 billion yuan. From the progress of the project, according to incomplete statistics, the amount of investment in water projects passed the project proposal and feasibility study report in 2011 was 123.5 billion yuan, a substantial increase of 56% from the same period of the previous year of 79.1 billion yuan. It is expected that the first half of 2012. Large-scale water conservancy projects started to focus on bidding. In order to further implement the water conservancy funds, seven ministries recently issued strong financial support for water conservancy construction, placing water conservancy construction at the top of national infrastructure, and the probability of implementation of water conservancy funds has greatly increased. It is expected that major and medium-sized water conservancy projects will start one after another in the second half of 2012, PCCP. The company's performance is expected to increase significantly with orders.

The release of orders was concentrated and the performance ushered in an inflection point. In the second half of the year, it gradually improved. We gave the industry an “optimistic” rating, and large-scale water projects will be the catalyst for bidding in succession. PCCP listed company orders are gradually implemented, and the results will usher in an inflection point. The second half of the year is expected to gradually improve. We give the industry a "look" rating company recommendation: Guotong Shares, Qinglong Pipe, and Dragon Management. Judging from previous bids, in the large-scale water conservancy construction projects, Guotong’s shares have a relatively high probability of winning the bid. Judging from the performance elasticity, the proportion of PCCPs in the gross profit of Longquan Pipeline, Guotong Co., Ltd. and Julong Pipeline Co., Ltd. is relatively high and the flexibility is relatively large. The proportion of PCCP business in Qinglong Pipeline Industry is relatively small.