Event: (1) on December 14, 2021, at the central economic work conference, the general secretary of Xi Jinping gave instructions: during the 14th Five Year Plan period, pipeline transformation and construction must be taken as an important infrastructure project, and the era of intelligent transformation of water supply and drainage in China has come. (2) On January 6, 2022, the Ministry of water resources issued the guiding opinions on vigorously promoting the construction of smart water conservancy, requiring to accelerate the construction of smart water conservancy.
Current situation: the construction of drainage system in China is not perfect, and insufficient pipe network coverage is common. The sewage treatment industry often says that “the black odor is in the water, the root is on the shore, the key is the outlet, and the core is on the official website”. The drainage pipe network can not be seen or touched, but the existing problems are very prominent. To truly improve the quality and efficiency of sewage treatment, it is bound to achieve full coverage of the drainage pipe network. Whether it is to solve sewage treatment, or to improve rainwater drainage standards and solve urban waterlogging, the construction of drainage pipeline must be the top priority.
*** 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, the national urban sewage treatment rate has reached more than 95%, but the pipe network has always been a short board in China’s sewage treatment. Problems such as insufficient coverage, leakage, passenger water crowding over the pipe network, wrong connection and mixed connection, overflow and so on are common, This is 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.
China’s water supply network reform focuses on water informatization and intelligence; The reconstruction of drainage end focuses on the construction of drainage pipeline. Since 2019, the performance of smart water meter industry and water information companies has increased rapidly. By the end of 2021, the central economic work conference emphasized the construction of drainage pipe network, and China smart water has officially moved from intelligent water supply to intelligent water supply and drainage., In 2019, China’s urban water supply penetration rate will reach 98.78%, while the township water supply penetration rate will reach 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 drainage 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, and the risk that the gross profit margin will decline due to the intensification of industry competition
