Water development plan will release favorable policies are expected to gradually introduce

Summary of contents: It is understood that in 2011 the scale of central water investment exceeded 100 billion yuan for the first time, reaching 114.1 billion yuan. Various water conservancy investment policies have been introduced in succession. 13 provinces have issued implementation rules, and accrued 10% of land transfer proceeds for farmland water conservancy construction funds, 17 provinces, autonomous regions, and municipalities have implemented provincial-level overall planning; 24 provinces, autonomous regions, and The municipality established a provincial water conservancy investment and financing platform.

Last year, one of the popular stocks in the A-share market was the water sector, which was followed by a good news policy. Chen Lei, Minister of Water Resources, disclosed at the working conference of the 2012 National Water Planning Plan held recently that the “Twelfth Five-Year Plan” for water conservancy development will be released soon. Analysts said that the favorable policies of the water conservancy industry are expected to be introduced one after another. From the perspective of policy support and national construction, the water sector has a greater industry prospect and potential, and related concept stocks are ready to make a comeback.

The “Twelfth Five-Year Plan” for water conservancy development will be introduced by Chen Lei. Large-scale water conservancy construction will focus on three key points in the future. The first is to promote flood prevention and drought relief, rational allocation of water resources and efficient use of water, soil and water conservation and ecological construction, and industrial capacity building. By 2020, four major systems will be basically built for water conservancy security and support for economic and social development. The second is to focus on the five weak links, and comprehensively strengthen the rural drinking water safety, the management of small and medium-sized rivers and the reinforcement of small reservoirs, and the construction of key water resources and farmland water conservancy facilities in the southwest to ensure flood control, water supply security and food security. The third is to accelerate the reform of water conservancy and enhance the momentum and vitality of water conservancy development. During the “12th Five-Year Plan” period, the total investment in water conservancy in the country is expected to reach 1.8 trillion yuan, of which the central government will invest about 800 billion yuan in water resources.

Rongrong New Blue-chip Fund Manager Wang Zhongyuan stated that due to various reasons, the historical accounts for water conservancy investment in our country are relatively large. At present, the water conservancy-related facilities have become a shortcoming that restricts economic development to a certain extent. In the future, economic and social development is also proposed for water conservancy construction. With higher requirements, China's efforts to increase investment in medium and long-term water resources are very certain.

Industry analysts pointed out that as a hot plate in the A-share market last year, water resources have been quiet for quite some time, and related concept stocks are ready to make a comeback. The release of the “Twelfth Five-Year Plan” for water conservancy development may be one of the catalysts.

Good policies are expected to be introduced in succession. Although the No. 1 document this year is not focused on water conservancy construction, Document No. 1 still emphasizes strengthening the construction of farmland water conservancy and accelerating the construction of water source projects. The government’s policy on water conservancy construction is still it is good. In 2012, there was no lack of favorable water conservancy terms in the Central No. 1 article, such as “Persevering in strengthening farmland water conservancy construction”, “Continuing to increase special funds for the construction of central government small-scale farmland water conservancy facilities,” and “Accelerating the use of land transfer proceeds for farmland water conservancy. The central and provincial-level funds for construction funds are planned."

In this regard, analysts said that this year's “No. 1 Document” re-emphasizes the central and provincial-level co-ordination of the proceeds from land transfer for the construction of farmland water conservancy construction funds. It is estimated that there will be a centralized use of the land transfer revenue management policies during the year and no detailed implementation rules will be issued. The details will be issued in the place. Therefore, the favorable policies of the water conservancy industry are expected to be gradually introduced.

The above analysts pointed out that at present, the listed companies engaged in water conservancy business in the A-share market are relatively small, but from the perspective of fundamental changes, policy support and industry potential are more obvious. As one of the industries with high government support, the water conservancy sector has experienced multiple volatility performances in recent history. From the perspective of time, increasing the implementation of related planning has become a top priority for water conservancy work. As a listed company with strong support for the water industry in terms of policy, there are currently better investment opportunities.

Analysts said that during the “Twelfth Five-Year Plan” period, the investment in water conservancy mainly revolved around the construction of four aspects: first, construction of farmland water conservancy; second, construction of flood control projects; and third, construction of water resources and urban and rural water supply capacity improvement; Soil and water conservation and ecological construction. From the perspective of the listed company, the listed companies in the above four aspects are all embodied. Therefore, from the perspective of policy support and national construction, the water sector represents a greater industry prospect and potential.

“Water conservancy stocks still have thematic investment opportunities this year.” Analyst Han Guocheng of Guotai Junan stated that the Department of Water Conservancy Construction is responsible for the people’s livelihood, the government’s support for water conservancy, financial support for the implementation of credit and land transfer payments, and the hedge economy Decline in risk. In addition, the commencement of large-scale water conservancy and hydropower projects and many early stages brought orders to listed companies and ensured an increase in business performance. The stocks of Gezhouba (600068), Anhui Water Resources (600502), Guangdong Hydropower (002060), Guotong (002205), Qinglong Pipe (002457) and others were optimistic.