Water Development Plan for the 12th Five-Year Plan issued to benefit construction machinery

During the holiday season, the National Development and Reform Commission announced that it has officially issued the Water Conservancy Development Plan (2011-2015) with the Ministry of Water Resources and the Ministry of Housing and Urban-Rural Development. It is necessary to use water conservancy as a key area of ​​public finance, significantly increase the investment in water conservancy construction, and study the expansion. Water conservancy construction loan discount interest scale and other measures . In this regard, market analysts pointed out that investment in future water budgets is also expected to continue to increase, the water sector is expected to continue to usher in favorable policies, and investors can follow the three main lines of the water sector layout, it is recommended to focus on the top ten beneficiaries.

Good water and water-saving irrigation It is understood that according to the 12th Five-Year Plan, the total investment of the central water conservancy project is 1.8 trillion yuan; the total investment in the next 10 years will be as high as 4 trillion yuan. The total investment of the National Development and Reform Commission approved a 175% year-on-year increase in water conservancy projects. This year, these projects will gradually start tenders. According to reports, rural water conservancy will become one of the key points of the "12th Five-Year Plan" for water conservancy investment. The "plan" has identified 10 major indicators. In addition to the 8 major indicators, the increase of rural drinking water safety population is one of the binding indicators. In response, some analysts pointed out that under the support of the above policies, investment in rural water supply projects will grow rapidly. Many leading companies in the water sector already have the advantages of business expansion experience and cash flow support, and are expected to seize this. Development Opportunities.

"Planning" also identified four key tasks for the development of water conservancy, and irrigation and water conservancy ranked first. The "Planning" requires that by 2020, basically complete the task of rehabilitative support and water-saving reconstruction for large-scale irrigation areas and key medium-sized irrigation areas; strive for a new efficient and water-saving irrigation area of ​​50 million mu within five years, and the effective utilization coefficient of farmland irrigation water will reach 0.53 or more. The general method to increase the coefficient of agricultural irrigation water use is to promote efficient water-saving technologies such as pipeline water delivery, sprinkler irrigation and micro-irrigation. Among them, the micro-irrigation technology has a small amount of water, but it can be directly and evenly and accurately transported to the soil near the root of the crop, and the irrigation is more efficient and water-saving, and it is favored by the market.

Three main lines layout ten beneficiary stocks “We estimate that the large-scale water projects to be opened for major projects in 2012 will be expected to exceed 100 billion in size and are expected to gradually enter the opening phase in the second half of the year. The hydropower investment in the first 5 months of 2012 increased significantly by 45.57% year-on-year. The start of hydropower investment.” Haitong Securities said that in the context of government investment to stabilize the economic downturn, the progress of investment in water projects is expected to accelerate in the second half of the year, and the release of orders will become a catalytic factor for the theme of water conservancy. Therefore, investors are advised to pay close attention to the water conservancy sector. The industry's large orders in the second half of the year.

Changjiang Securities advises investors to focus on the two major sub-sectors of water pumps and construction machinery. Its research report pointed out that investment in water conservancy is expected to continue to stimulate new demand. It is expected that the annual market capacity will reach RMB 10 billion. The main beneficiary products are water pumps for agricultural pumps, submersible axial pumps and long shaft deep well pumps. At the same time, the increase in the demand for construction machinery from the water conservancy investment is in descending order: excavators, bulldozers, loaders, and cranes. Among them, bulldozers may have the greatest growth elasticity due to their small sales base.

In terms of individual stocks, the major securities companies have focused their attention on the following ten shares: Daban Water (300021), South Pump (300145), Guotong (002205), Qinglong Pipe (002457), New Territories Pump Industry (002532), Yasheng Group (600108), Xinjiang Tianye (600075), Leo Company (002131), Anhui Water Resources (600502), Julong Pipe Industry (002619).