Hong Kong stocks concept tracking: National Water Investment Hits New High, Pipeline Construction Brings Incremental Demand for Building Materials (with concept stocks)

Recently, the National Bureau of Statistics released the latest economic operation statistics, with outstanding performance in water conservancy investment. The data shows that in the first three quarters, China's GDP achieved a growth of 4.8%, while infrastructure investment (excluding the electricity, heat, gas, and water production and supply industry) increased by 4.3% year-on-year. Among them, investment in water conservancy management industry grew by 37.9%, far higher than investments in the aviation transportation industry (19.2%) and railway transportation industry (14.5%). Entering the fourth quarter, multiple policies supporting "steady growth" have been implemented, providing strong support for maintaining high prosperity in water conservancy investment. On October 8th, the National Development and Reform Commission clearly stated the implementation of a package of incremental policies, with the full release of 700 billion yuan of central budgeted investment, which is now being accelerated for project construction and fund disbursement. On November 8th, during the 12th meeting of the 14th National People's Congress Standing Committee, China announced a direct increase of 10 trillion yuan in local bond resources. On October 8, the Anhui Province held a mobilization meeting for the start of the fourth batch of major projects, with 551 projects starting, totaling 426.81 billion yuan in investment, and an annual planned investment of 42.61 billion yuan. Since the fourth quarter, Shaanxi Province has started the construction of 318 key projects, with a total investment of 171.638 billion yuan, and an annual planned investment of 22.152 billion yuan. In Sichuan Province, several regions have launched major project promotion activities in the fourth quarter of 2024, with a total investment of 364.5 billion yuan in 601 infrastructure projects, accounting for 46.4%. The General Office of the State Council issued an "Opinion on Optimizing and Improving the Management Mechanism of Local Government Special Bonds" aiming to better leverage the positive role of special bonds in strengthening infrastructure, making up for shortcomings, benefiting the people, and expanding investment, with 17 measures in 7 aspects. Industry institutions have stated that under the background of bond issuance, the relief of local debt pressure has released more space for infrastructure investment. At present, the peak period of water conservancy project construction driven by the issuance of national bonds in 2023 has begun, coupled with the high prosperity of water conservancy investment and policy support for underground pipe network renovation, building materials for pipelines and other infrastructure are expected to usher in a new round of development opportunities. In water conservancy projects, plastic pipelines have become an important material for water supply, drainage, and irrigation systems due to their light weight, corrosion resistance, ease of construction, and long service life, and are expected to directly benefit from this round of industrial chain upturn. Stocks related to underground pipe network building materials: CHINA LESSO (02128): CHINA LESSO has long been a leading player in the plastic pipeline industry. In terms of production value, according to the financial reports of various companies, in 2023, CHINA LESSO, Era Co., Ltd., and Zhejiang Weixing New Building Materials had sales volumes of plastic pipelines of 2.65 million, 620,000, and 290,000 tons, with revenues from plastic pipelines of 24.6 billion, 5.8 billion, and 5.4 billion yuan, respectively. Lesso holds a market share of approximately 20% in the domestic market (calculated by production volume), ranking first in the industry, far surpassing competitors.