In 2022, we must pay attention to the investment opportunities of water network lines: from the performance of mainstream intelligent water meter companies exceeding expectations in 2019 to the full swing and high performance of water informatization industry in 2021, in the process of tracking the intelligent transformation of water network lines, we have paid attention to the internal product expansion of intelligent water meter companies and water informatization (intelligent water company) in the industry from bottom to top The phenomenon of expanding investment shows that water companies have strong demands for intelligent transformation; On December 14, 2021, at the central economic work conference, the general secretary of Xi Jinping pointed out that during the 14th Five Year Plan period, pipeline reconstruction and construction must be taken as an important infrastructure project; This also means that the logic of top-down China’s pipe network transformation is clear.
The growth rate of fixed asset investment in China’s water pipe network has accelerated, and the era of intelligent transformation of water pipe network has come: according to the data in the urban statistical yearbook of the Ministry of housing and urban rural development, the annual fixed asset investment in China’s water supply and drainage construction has far exceeded the fixed asset investment in water supply construction, In 2020, China’s fixed asset investment in drainage construction reached 376.62 billion yuan, a year-on-year increase of 33.6%, of which the investment in urban drainage fixed assets was the largest, reaching 211.48 billion yuan, accounting for 56% of the country; In 2020, China’s fixed asset investment in water supply construction was 157.55 billion yuan, a year-on-year increase of 14.6%.
Industry trend: ductile iron pipes are preferred for the main pipes of water supply network, and plastic pipes are preferred for drainage network: the water supply pipes in use in China are mainly divided into three categories: metal, non-metal and composite pipes, and ductile iron pipes are preferred for the water supply pipes of main roads. At the drainage end, considering the cost and material properties, the traditional pipes are mostly reinforced concrete pipes, plastic pipes or the mainstream direction of drainage pipes.
It is suggested to pay attention to ductile iron pipe faucet [ Xinxing Ductile Iron Pipes Co.Ltd(000778) ], municipal engineering pipeline faucet [ Shandong Donghong Pipe Industry Co.Ltd(603856) ], public utility Internet of things sensor faucet [ Hanwei Electronics Group Corporation(300007) ]: [ Xinxing Ductile Iron Pipes Co.Ltd(000778) ] is the largest manufacturer of centrifugal ductile iron pipe, steel grating and casting products in the world. Under the background of the large-scale transformation of national water pipe network, The company’s main product ductile iron pipe used in water pipe network is expected to usher in high growth. [ Shandong Donghong Pipe Industry Co.Ltd(603856) ] is the leader of municipal engineering pipeline. In 2020, the company’s water supply and drainage pipe revenue accounted for 64% of the total revenue, which is the main source of revenue of the company. During the 14th Five Year Plan period, the transformation of water supply and drainage pipe network is an important part of China’s infrastructure. For pipe network pipe companies, we should first pay attention to the leaders of municipal engineering pipes. [ Hanwei Electronics Group Corporation(300007) ] is the leader of China’s gas detection sensors and is committed to smart water. Smart water is expected to usher in a breakthrough in 2022. Relying on the core sensor technology, the company has developed and produced a variety of intelligent instruments. As the sensing hardware terminal of different scenes, the intelligent instruments transmit the sensing information to the Internet of things monitoring system developed by the company through NB IOT and other communication means.
Risk warning: the risk that the investment in fixed assets of China’s water pipeline network is less than expected; Risks of macroeconomic downturn; The risk of sharp rise in the price of raw materials; Risks of stricter environmental protection policies, etc
