Recently, in order to implement the "opinions" the CPC Central Committee and State Council on deepening the reform of the oil and natural gas and "revolution in energy production and consumption strategies (2016-2030)", the national development and Reform Commission and the National Energy Bureau jointly issued the "long-term oil and gas pipeline network planning".

"Medium and long term oil and gas network planning" issued

Points of investment:

The total size of over the next ten years of oil and gas pipeline road investment of about 16790 yuan

According to the "planning", to 2020, the national oil and Gas Pipeline Road total mileage will reach 169 thousand km, natural gas, crude oil and refined oil pipeline in 13th Five-Year during the incremental scale were 40 thousand km, 5 thousand km and 12 thousand km. By 2025, the total mileage of the backbone of the national oil and gas network will be further increased to 240 thousand km. According to our estimates, "13th Five-Year" and "14th Five-Year" during the total scale of oil and gas pipeline road investment will reach 712 billion yuan and 967 billion yuan, a total of about 16790 yuan, 30 billion yuan more than the corresponding demand for industrial valves.

Strengthening the network key equipment of autonomous capabilities, the company is expected to benefit fully

This "planning", strengthen basic research and technological innovation, promote large-scale compressor, SCADA system, large caliber high pressure valves and other key network equipment independent ability. In 2015 the company successfully passed the "natural gas transmission pipeline, high pressure, large caliber full welded ball valve" identification group expert review, the relevant products to the localization of trial production technical conditions, test program and the requirements of the relevant standards. On the other hand, the company has been involved in include the west east gas pipeline 1-3 line, the Central Asian gas most domestic oil and gas pipeline network construction project pipeline project, the China Burma oil and gas pipeline project, Sichuan East gas transmission pipeline project, is expected to fully benefit from this round of new peak of pipeline construction.

Maintain the recommended rating

Is expected in 2017 ~2019 EPS were 0.47 yuan, 0.63 yuan and 0.82 yuan, corresponding to the current price earnings ratio of 34.32 times, 25.65 times and 19.72 times, maintain the recommended rating.

Risk warning

Raw materials prices rose sharply; new orders decline in gross margin; the downstream industry boom is less than expected.