"Twelfth Five-Year Plan" Water Investment Will Reach 1.8 trillion Yuan to Benefit First from the Cement Industry

The National Water Resources Planning and Planning Working Conference announced on February 10 that China's "Twelfth Five-Year Plan" for the development of water conservancy projects and related construction plans have been completed. The total estimated investment for the five-year period is 1.8 trillion yuan, of which central government water investment is about 800 billion yuan, and the rest 1 The trillions of yuan were raised by local governments through multiple channels. Industry analysts believe that the first benefit of this move in the A-share market is the cement industry. Drainage pipeline listed companies will benefit in the later stages of construction.

“The investment of 1.8 trillion yuan in water conservancy is in line with our previous forecast. Among them, the amount of investment in the central government has increased, which has, to some extent, reduced the pressure on local government water conservancy investment.” The 1.8 trillion yuan of water conservancy investment reflects the A-share market. The first benefit is the cement industry. However, due to the low proportion of water conservancy investment in the total amount of cement industry, cement consumption is estimated to be approximately RMB 1.8 trillion. More than 70 million tons, accounting for only 3.5%, so the investment in cement and cement related to the elasticity of the use of weak concrete. However, in the later stages of water conservancy construction and construction, the benefits of pipeline listed companies will gradually show up, and it is expected that the growth rate of such companies this year will be more than 30%.

According to Liu Jinming, an analyst with Bohai Securities and Building Materials Industry, the pipeline market capacity directly corresponding to the 1.8 trillion water conservancy investment will reach 200 billion yuan, and the annual market capacity will be 40 billion yuan. Liu Jinming believes that “as there are many key projects for water conservancy construction, market orders will gradually be concentrated among the strongest companies in the industry. In the water supply sub-sector, it is recommended to focus on the national shares. As of now, the company has signed new contracts and pre-winning bids this year. The amount was 816 million yuan, an increase of 89.8% over the same period of last year. In the quality of orders, this year's orders were signed at high raw material prices. If the price increase next year is smaller than this year, the profit rate will increase next year."