The central economic work conference will set the tone that next year’s economy will focus on stability, and infrastructure investment should be carried out moderately ahead of schedule. Ning Jizhen, deputy director of the national development and Reform Commission, said on December 22 that infrastructure investment should be carried out moderately in advance to support the construction of water conservancy, municipal and new infrastructure. We will accelerate the completion of short boards in gas pipelines, disaster prevention and reduction, systematically control urban waterlogging, and comprehensively promote the construction of drainage and waterlogging prevention facilities. The Ministry of water resources pointed out that in accordance with the requirements of properly advancing the policy, we should give full play to the important role of water conservancy in stabilizing investment and expanding domestic demand by focusing on improving the river basin flood control project system and implementing major national water network projects. Under the background of “stabilizing the economy”, the pipeline industry is expected to accelerate the release of demand again, and a new business cycle of the industry may start.
Key investment points
The construction of national water network and urban municipal pipe network is expected to become an important driving point of new infrastructure
The national water network is a comprehensive engineering system based on natural rivers and lakes, with diversion and drainage projects as channels, regulation and storage projects as nodes and intelligent regulation as means, integrating the functions of optimal allocation of water resources, flood control and disaster reduction of river basins and protection of water ecosystems. China’s 14th five year plan should clearly implement major projects of the national water network. Municipal pipe network is not only an important infrastructure of a city, but also the lifeblood of a city. Municipal pipe network works include: underground power supply pipeline, rainwater pipeline, sewage pipeline, water supply pipeline, fire pipeline, gas pipeline, communication pipeline, community intelligent pipeline, etc. We are facing the increasing demand for pipeline investment due to the continuous in-depth development of urbanization and the construction of new rural areas; At the same time, it also faces the stock transformation demand for the renewal and transformation of old urban pipelines in the early stage.
Pipes fully benefit from steady growth and are expected to open a new business cycle
In the context of stable economy, as an important channel for water resources and energy transmission, pipeline is expected to accelerate the release of China’s current needs in terms of uneven distribution of water resources, urban disaster prevention and reduction, systematic treatment of urban waterlogging, and overall promotion of the construction of drainage and waterlogging prevention facilities. In 2020, the fixed asset investment of water supply, drainage, sewage treatment and gas pipelines for the construction of urban municipal public facilities was 74.942 billion yuan, 211.478 billion yuan, 104.340 billion yuan and 23.861 billion yuan respectively, with a total investment of 414.6 billion yuan, a year-on-year increase of 31%. With the increase of investment in national water network construction and municipal pipe network transformation, we believe that the pipeline industry is expected to usher in a new business cycle driven by “stock + increment”.
At present, the main application materials of pipeline are prestressed reinforced concrete pipe, welded steel pipe and nodular cast iron pipe. With the continuous improvement of the scale of China’s pipe network, the requirements for pipe performance and service life are more stringent. The three materials have gradually replaced the commonly used concrete pipes in terms of performance and become the main pipe materials for the development of China’s pipe network in the future.
Related subject matter
We believe that it is expected to fully benefit from the key focus of the construction of national water network and urban municipal pipe network, including nodular cast iron pipe: Xinxing Ductile Iron Pipes Co.Ltd(000778)
