Construction machinery: How much demand for machinery and equipment will Xiong'an New Area bring?

Event: Recently, the Central Committee of the Communist Party of China and the State Council issued a notice to decide to establish Hebei Xiong'an New Area, which is at the same level as Shenzhen and Pudong.

Comments:

The millennium plan set sail today, and the municipal road network and real estate have become a strong driving force for the demand for construction machinery.

The planning of the new area is short, with Xiongxian County, Rongcheng County, and Anxin County as specific starting areas, and an area of about 100 square kilometers will be developed; the medium-term development area is 200 square kilometers; The long-term control area is about 2,000 square kilometers. In the next 20 years, the National Development and Reform Commission will intensively approve infrastructure projects in the Xiong'an New Area. The country's investment in infrastructure has increased to boost the demand for construction machinery. Referring to the development of the Shenzhen Special Economic Zone: from 1979 to 2009 Chinese New Year's Eve a total of 1.42 trillion yuan of fixed investment was completed, of which 368.7 billion yuan was involved in the construction of municipal and road network infrastructure, and 638.4 billion yuan was invested in real estate. We believe that in the future, Xiong'an New Area will be affected by the multiple pull of urban road network + real estate and other facilities construction, which will significantly drive the demand for construction machinery. According to the municipal road network construction, the demand for construction machinery accounted for 8%, and the demand for construction machinery in real estate investment accounted for 5%, we expect that the market space for construction machinery demand in the next 20 years can reach 93 billion yuan.

Xiong'an New Area will generate a large number of potential intercity railway and urban rail transit demand, with a long-term rail transit vehicle market space of about 61.9 billion yuan.

In December 2016, the National Development and Reform Commission approved the planning of the intercity railway network in the Beijing-Tianjin-Hebei region, with a preliminary estimated investment of about 247 billion yuan, involving 9 projects including intercity railways, with a total mileage of about 1,100 kilometers and an estimated vehicle market space of 20.8 billion yuan. In the long term, by 2030, an intercity railway network with "four verticals, four horizontals and one ring" as the skeleton will be basically formed, which will effectively support and guide the adjustment of regional spatial layout and industrial transformation and upgrading. In the field of urban rail transit, the long-term control area of Xiong'an New Area covers an area of about 2,000 square kilometers, which is equivalent to the area of 1,997 square kilometers in Shenzhen, and the strategic development status of the two is similar, Shenzhen will plan 32 lines of long-term urban rail transit by 2030, with a total length of 1,142 kilometers and an estimated vehicle market space of 41.1 billion yuan, and Xiong'an New Area is expected to replicate. To sum up, the cumulative demand for urban rail transit vehicle equipment in the next 20 years can reach about 61.9 billion yuan.

The demand for urban rail transit + underground comprehensive pipe gallery is strong, and the shield machine market will grow rapidly.

In 2015, about 1,300 kilometers of underground comprehensive pipe corridors were started in China, and in 2016, it reached 2,000 kilometers, with a growth rate of more than 50%. Xiong'an New Area, as a contemporary development area, believes that the concept of underground comprehensive pipe gallery is expected to be gradually realized from the planning end. According to the estimation of each shield machine operation of 8 kilometers and the unit price of 50 million yuan, and the superposition of urban rail transit demand, we estimate that Xiong'an New Area alone is expected to bring more than 7 billion yuan of shield machine market demand in the next 20 years.