Events: (1) on February 9, the supervision required local governments to make up a number of special debt projects, focusing on urban pipe network construction, water conservancy and other fields.
(2) on January 19, the Ministry of housing and urban rural development and the national development and Reform Commission issued a document to strive to control the leakage rate of urban public water supply management within 9% by 2025.
Current situation: China's water supply network is seriously old, and the laying coverage of drainage network is not perfect. In 2019, the leakage rate of China's urban water supply pipe network is 14%, and the aging of urban pipe network is still very serious. The local special debt supplementary application project requires all localities to take key areas such as urban pipe network construction and water conservancy as supplementary focus. In December 2021, the Ministry of finance has issued a special debt quota of 1.46 trillion in advance in 2022. After the "two sessions" in March this year, the subsequent quota of about 2.2 trillion will be issued again. The supplementary report of the special debt on the construction of urban pipe network and water conservancy reflects the trend that the state is trying to find ways to solve the source of funds for the large-scale transformation of water pipe network.
*** In 2019, the three-year action plan for improving the quality and efficiency of urban sewage treatment (2019-2021), jointly issued by the Ministry of housing and urban rural development and other three ministries and commissions, focused on "accelerating the completion of the shortcomings of urban sewage collection and treatment facilities, and realizing the full coverage, collection and treatment of sewage pipe network as soon as possible". During the 13th Five Year Plan period, China's sewage treatment infrastructure construction has made great progress. By the end of the 13th Five Year Plan period, the national urban sewage treatment rate has reached more than 95%. However, the pipe network has always been a short board in China's sewage treatment, and problems such as insufficient coverage, leakage, passenger and water crowding the pipe network, wrong connection and mixed connection, overflow and so on are common, This is also the main reason why China's sewage treatment rate is high, but the sewage collection and treatment rate is still relatively low, and black and smelly water bodies occur frequently.
The water supply network in China should be reformed intellectually and intelligently; The reconstruction of drainage end focuses on the construction of drainage pipeline. Since 2019, from the high performance of intelligent water meter industry and water information companies to the end of 2021, the central economic work conference emphasized the construction of drainage pipe network, and China's intelligent water has officially moved from intelligent water supply to intelligent water supply and drainage. In 2019, China's urban water supply penetration rate reached 98.78%, while the township water supply penetration rate was 80.50%. Therefore, for the construction of water supply network, more focus is on intelligent and information construction, while the construction of drainage network focuses on pipeline laying.
Subject matter: it is recommended to pay attention to the investment opportunities of drainage pipe industry and smart water industry. It is recommended to pay attention to the leader of pipeline and pipe industry [ Xinxing Ductile Iron Pipes Co.Ltd(000778) ], recommend intelligent water faucet [ Wpg (Shanghai) Smart Water Public Co.Ltd(603956) ], [ Zhejiang Heda Technology Co.Ltd(688296) ], ultrasonic water meter faucet [ Meter Instruments Co.Ltd(301006) ]
Risk tip: the risk that the macro-economy is less than expected, the risk that the intensification of industry competition leads to the decline of gross profit margin, etc
