Recently, the State Council Information Office held a press conference on the current situation of water conservancy and the 12th Five-Year Plan for water conservancy. Zhou Xuewen, chief planner of the Ministry of Water Resources, stated that the total investment in water conservancy projects during the 12th Five-Year Plan period will reach approximately 1.8 trillion (about 4 trillion yuan in ten years).
Guotai Junan Securities believes that although this investment limit is slightly lower than the original RMB 400 billion per year, the clear planning will help control investment progress. The effective implementation of the "12th Five-Year Plan" for water conservancy will allow listed companies to clearly benefit.
The report issued by Guotai Junan Securities stated that:
The approximate ratio of 1.8 trillion investment in four areas is: about 20% for irrigation and water conservancy construction, about 38% for flood control and disaster reduction, and about 35% for water resources allocation and construction of urban and rural water supply protection projects. , In addition to soil and water conservation and ecological construction. Most of the listed water conservancy and hydropower companies are related to flood control, disaster mitigation and allocation of water resources. We expect the total capacity of the water conservancy project market to exceed RMB 1 trillion in the next five years.
As of the end of September, this year's investment in water conservancy construction has been about 260 billion yuan, of which the central government has invested 113.9 billion yuan. 10% of the proceeds from land transfer is used for better implementation of farmland water conservancy construction policies, and Guangdong and Anhui have extracted 45% and 30% respectively in 10% for overall provincial co-ordination. In July, the Central Water Conservancy Work Conference specifically asked for the need to make overall plans in the country and it has yet to be implemented. The implementation of water conservancy construction investment is better than expected in the first half of the year, indicating that the progress has been accelerated. We believe that with the further implementation of this policy, the scale of water conservancy investment will continue to increase, and the pace of water conservancy construction will further accelerate.
Guotai Junan Securities has a long history of researching water conservancy and hydropower units in the industry and found that there are two types of equity investment in the water conservancy and hydropower industry: value investment and thematic investment.
“According to our research, in the period of inflation expectation and economic downturn, industries that are explicitly supported by policies will have excess returns. This meeting shows that the central government attaches great importance to the construction of water conservancy and hydropower, and investment in water conservancy and hydropower construction has been effectively implemented, and In the future, there is a possibility of acceleration, and at the same time, the clear ratio of planned investment in all aspects eliminates investors' doubts about whether listed companies can benefit, and it is expected that the growth of order growth rate of listed companies in the future will further strengthen investor confidence. , Guangdong Hydropower, Gezhouba, China Hydropower.†Guotai Junan Securities said.
Guotai Junan Securities believes that although this investment limit is slightly lower than the original RMB 400 billion per year, the clear planning will help control investment progress. The effective implementation of the "12th Five-Year Plan" for water conservancy will allow listed companies to clearly benefit.
The report issued by Guotai Junan Securities stated that:
The approximate ratio of 1.8 trillion investment in four areas is: about 20% for irrigation and water conservancy construction, about 38% for flood control and disaster reduction, and about 35% for water resources allocation and construction of urban and rural water supply protection projects. , In addition to soil and water conservation and ecological construction. Most of the listed water conservancy and hydropower companies are related to flood control, disaster mitigation and allocation of water resources. We expect the total capacity of the water conservancy project market to exceed RMB 1 trillion in the next five years.
As of the end of September, this year's investment in water conservancy construction has been about 260 billion yuan, of which the central government has invested 113.9 billion yuan. 10% of the proceeds from land transfer is used for better implementation of farmland water conservancy construction policies, and Guangdong and Anhui have extracted 45% and 30% respectively in 10% for overall provincial co-ordination. In July, the Central Water Conservancy Work Conference specifically asked for the need to make overall plans in the country and it has yet to be implemented. The implementation of water conservancy construction investment is better than expected in the first half of the year, indicating that the progress has been accelerated. We believe that with the further implementation of this policy, the scale of water conservancy investment will continue to increase, and the pace of water conservancy construction will further accelerate.
Guotai Junan Securities has a long history of researching water conservancy and hydropower units in the industry and found that there are two types of equity investment in the water conservancy and hydropower industry: value investment and thematic investment.
“According to our research, in the period of inflation expectation and economic downturn, industries that are explicitly supported by policies will have excess returns. This meeting shows that the central government attaches great importance to the construction of water conservancy and hydropower, and investment in water conservancy and hydropower construction has been effectively implemented, and In the future, there is a possibility of acceleration, and at the same time, the clear ratio of planned investment in all aspects eliminates investors' doubts about whether listed companies can benefit, and it is expected that the growth of order growth rate of listed companies in the future will further strengthen investor confidence. , Guangdong Hydropower, Gezhouba, China Hydropower.†Guotai Junan Securities said.
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