In January this year, the issuance scale of local bonds was 698.9 billion yuan, a significant increase compared with the same period last year.
In December 2021, the Ministry of finance has issued a special debt quota of 1.46 trillion in advance in 2022.
The investment in large-scale water conservancy and municipal projects has increased, which is directly beneficial to Donghong Co., Ltd., which is mainly engaged in the manufacturing of engineering pipeline products.
Under the background of moderately advanced infrastructure construction and steady growth, infrastructure investment may have a bright performance in 2022.
At the same time, the declaration of special debt projects has also been carried out gradually.
Adjust the profit forecast according to the company’s performance express.
In 2021, the company won the bid for the procurement project of PCCP pipe, ductile iron pipe, penstock pipe and pipe fittings of the second phase of Han Ji Wei River Diversion Project, with a total amount of 820 million yuan.
It is estimated that the company’s EPS from 2021 to 2023 will be 0.49/1.33/1.93 yuan.
Among them, 484.4 billion new special bonds were issued, an increase of 484.4 billion compared with the same period last year, completing one third of the amount approved in advance.
The procurement length of the bid winning pipe fittings is the longest among the four bid sections, accounting for about 33% of the total length of the project pipe fittings.
In addition, the company’s profit space was compressed due to the sharp rise in raw material prices in 2021.
The regulatory authorities require all localities to take the key areas such as urban pipe network construction and water conservancy as the focus of supplementary reporting.
(the original securities research report was released on February 11, 2022; Wang Xiaoyong Certificate No.: s0550519100002) for more research contents and wonderful activities, please.
Special bonds were issued in advance, and infrastructure investment gradually warmed up.
The company’s products are widely used in national municipal, water conservancy, industrial and mining, thermal and other large-scale projects.
Then, the company’s performance is expected to achieve a breakthrough by superimposing the high increase in orders.
Risk warning: the project payment collection is less than expected, and the profit forecast and valuation are less than expected.
After the “two sessions” in March this year, the subsequent quota of about 2.2 trillion will be issued again.
Increase investment in pollution and carbon reduction, new energy, new technology and new industrial clusters, and strengthen the investigation and transformation of urban underground pipe networks.
Water conservancy and water engineering has become the focus of infrastructure construction.
In 2022, the raw material prices gradually recovered, and the profit space was released.
The meeting of the national Standing Committee in January 2022 also stressed the need to speed up the implementation of major water conservancy projects that have been demonstrated for many years.
At the end of December 2021, the Ministry of water resources issued the guidance on the implementation of major national water network projects, requiring the construction of a number of national water network backbone projects and the orderly construction of provincial, municipal and county water networks by 2025; In June 2021, the national development and Reform Commission and the Ministry of water resources issued the development plan for urban sewage treatment and resource utilization in the 14th five year plan, requiring 80000 kilometers of sewage collection pipe network to be added and reconstructed during the 14th Five Year Plan period.
Maintain the company’s “buy” rating.
At present, the company’s orders on hand have increased significantly compared with the same period last year, which also confirms that China’s water conservancy and water conservancy projects are accelerating.
