China-Singapore latitude and longitude client (July 17th) (Xiong Siyi) Since June, there has been continuous heavy rainfall in the south, and heavy floods and floods have occurred in the middle and lower reaches of the Yangtze River. Has the flood disaster affected local listed companies? Recently, many companies have responded to intensive questions from investors through the interactive exchange platform of the Shenzhen Stock Exchange.
A section of the Yangtze River in Hubei during the 2020 flood season shot by local residents
Was it affected?
When floods come, agricultural production is most vulnerable. The Sino-Singapore Jingwei client query and interaction found that Jindan Technology was recently questioned by investors because the production of raw materials involves corn. "Is the company's raw material corn affected by this year's floods, which has caused costs to rise, which has led to a decline in company profits?"
In response, Jindan Technology responded that “China’s main corn production areas are mainly concentrated in the East China North Spring corn area and the Huanghuaihai Plain summer sowing corn area, which is currently not affected by floods. The company’s location is Zhoukou, the Huanghuaihai Plain summer sowing corn area. The company buys corn locally."
Image source: Interactive Exchange of Shenzhen Stock Exchange
In addition, aquaculture enterprises such as New Hope, Tianbang shares, and Zhengbang Technology have also attracted investors' attention. New Hope stated that the recent southern flooding may have an impact on the rhythm of some pig farms, but due to the company's relatively small business in the south, the impact on the overall operation is limited; Tianbang shares said that the company's pig farms are currently not affected; Zhengbang Technology also said that the company is currently operating normally.
Some industrial enterprises were also asked about "has it been affected". Fertilizer producer ST Yihua said, "The company's production and operation are normal and the prices of fertilizers are stable. The precipitation weather has an adverse effect on the construction of the company's projects under construction." Shangfeng Cement Said, "The short-term rains and floods in some areas in East China have a certain impact on the cement market and logistics delivery of some bases in the short term." Wan Nianqing, who is also a cement manufacturer, said, "At present, the company's production and operation are stable, and major projects in supply are not affected by the flood."
Did you rescue the disaster?
What is even more touching is that many listed companies revealed in their replies to participate in flood prevention and relief work. Henghua Technology stated, "At present, the company is involved in the construction of emergency command systems for flood control and drought relief in several provinces. It is also involved in the construction of river and lake hydrological monitoring and weather forecasting systems in some places to protect people's lives and property through information technology." Shantui The stock said, "In the face of danger, Shantui equipment and the emergency service team formed at the first time, rushed to the rescue site with the rescue team, and the service team was on standby at all times throughout the scene."
Sichuan Meifeng said, "Woven bags produced by wholly-owned subsidiaries, in addition to being widely used in fertilizer, grain, petrochemical and other industries, are also used as emergency supplies to participate in regional flood and flood emergency rescue"; Longping High-tech said, "Agricultural service personnel are in Do our best to help farmers participate in the protection of crops during floods and floods"; Huazi Technology said, "The company sent personnel after the sale to the site of the cooperative project for site survey and maintenance as soon as possible to ensure the normal operation of the equipment during the flood season." According to reports, the reservoir information system it developed , Can real-time sense of water and rain, dam displacement, seepage and other information throughout the day to achieve automatic warning of heavy rain, flood, dam safety over-alert."
Image source: Interactive Exchange of Shenzhen Stock Exchange
Yueyang Xingchang made a positive statement, "The company has 10 million/year woven bag production lines, which can be used as flood control materials... The company has requested the woven bag production workshop to do its best to prepare for flood control materials"; Hainengda said, "The company is actively contacting Local emergency departments strive to provide special communication products and services for disaster relief work"; Wan Nianqing said, "The company will actively participate in and strongly support post-disaster reconstruction work in the disaster-stricken areas in the region."
Are there orders for flood control products?
The Sino-Singapore Jingwei client noted that several flood control emergency equipment manufacturers have attracted investors' attention. An investor asked China Shipbuilding Emergency, "The company's main business includes flood control emergency equipment. Is the company's main business currently operating normally?" China Shipbuilding Emergency responded affirmatively, and said, "The company is fully active in 24 hours to support flood relief." .
Image source: Interactive Exchange of Shenzhen Stock Exchange
In addition, Weihai Guangtai said, "The company is one of the few listed companies whose main business is emergency rescue equipment products, and there are many types of products that can be invested in flood prevention... This kind of product is one of the company's main products, and product orders continue Sufficient." Zhejiang Linuo also said, "Many products produced by the company's control valves, butterfly valves, knife gate valves and other products are suitable for water conservancy projects and can meet the requirements of flood control and flood prevention." Jinzhou Pipeline said, "The company will continue to pay attention to the dynamics of the project engineering market involved in major water conservancy projects and actively strive for orders."
An investor of CSCEC thinks more deeply, "Will the company (in) carry out water treatment business to purify the water quality after the flood?" In response, CSCEC replied, "Historically, the company has also responded to the flood Experience in project implementation of sewage treatment issues... The company will actively expand related business according to the existing situation."
Brokers: Flood and waterlogging disasters increase demand for water conservancy investment
A section of the Yangtze River in Hubei during the 2020 flood season shot by local residents
Societe Generale Research indicated that the overall impact of flood disasters on macroeconomics may be relatively limited. In terms of food, the worst floods in the north and south are estimated to reduce grain output by 46.2 billion kilograms or cause short-term fluctuations in food prices. However, the current ratio of major grain storage to sales is at an all-time high, which is expected to ensure the stability of grain prices. In terms of vegetables, the overall growth rate of national vegetable output has been stable in recent years. In terms of pork, the price of pigs also diverged in the years when the floods were severe, and the impact of floods on live pig supply was limited. With regard to aquatic products, when past floods occurred, the efficiency of aquaculture farming tended to continue to rise, and production in some years increased, with less impact.
Minsheng Securities believes that the impact of the flood has two sides. Although the flood will delay the construction progress of the project, the flood will also bring more livelihood projects and financial investment. On July 13, Ye Jianchun, deputy minister of water resources, said at the State Council’s regular policy briefing that 2020-2022 will focus on promoting 150 major water conservancy projects, including flood control and disaster mitigation, optimal allocation of water resources, irrigation and water conservation, and water supply , 5 categories of water ecological protection and restoration, and smart water conservancy, with a total investment of 1.29 trillion yuan.
Guohai Securities believes that the flood disaster in the south has increased the demand for water conservancy investment. Since the beginning of this year, the cumulative precipitation in the country has been significantly higher than in the same period of the previous year. The rainfall is concentrated in the Yangtze River Basin. The Ministry of Water Resources has upgraded the emergency response of water disaster prevention to the second level, and the south has entered the main flood season. The National Convention on July 8 emphasized the need to promote the construction of major water conservancy projects, especially the requirements for the proactive layout of northern rivers. On the one hand, it is recommended to pay attention to the opportunities for hydropower brought about by the advance of the flood season and the influx of water. On the other hand, the demand for flood protection and flood discharge has greatly increased the construction of water conservancy facilities, river dredging and dredging, drainage pipe network encryption, sponge city, wetland construction, etc. conducive to water conservation, prevent urban waterlogging, and improve investment demand drain efficiency of investment growth is expected to occur after the flood season, the construction proposed to focus on. (Sino-Singapore Jingwei app)
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