Rising water prices are not the same as improving the efficiency of water companies

There are many factors that affect the benefits of water supply companies. First of all, China's water supply price management measures limit the average level of reasonable profitability of water supply companies to 8-10% of net assets profit margin. The premise of water price adjustment is that the increase in water supply costs obviously affects corporate profits; secondly, water prices It includes a certain percentage of sewage treatment fees, which are collected by the water supply company and handed over to the local finance. Only the remaining water fees will affect the profitability of the water supply company. Finally, the National Development and Reform Commission stipulated the minimum water Resource fees will be one of the necessary costs for water supply companies.

Tiered water price is the inevitable result of market reform in water supply industry

In the first stage of market-oriented reforms, the water-making and water-supply enterprises in the water supply industry only achieved separation of government and enterprises and the establishment of a modern enterprise system, but they have not yet truly achieved market-oriented operation. Foreign-funded enterprises bring technology and rich management experience. State-owned enterprises need to seize the opportunity, practice their internal skills, and gradually improve the market mechanism. Promoting water price reform is the inevitable result of market reform in the water supply industry.

Tiered water price promotes the demand for the construction of the national recycled water market

Rising water prices have stimulated market demand for urban secondary water sources. The huge price difference between recycled water and non-residential water and water for special industries will directly affect market purchases. We believe that the construction of the national recycled water market will accelerate. The Beijing Municipal Government put forward the "Three-year Action Plan for Beijing to Accelerate the Construction of Sewage Treatment and Reclaimed Water Utilization Facilities". According to the current construction situation, the construction scale of Beijing Reclaimed Water Plant is 1.94 million tons and the planned construction is 260,000 tons. 2.2 million tons, of which the investment in membrane project construction may reach 5.5 billion yuan. According to the national "Twelfth Five-Year Plan" mentioning a 15% utilization rate of recycled water, the construction market for membrane projects across the country may reach 50 billion by 2015.

Tiered water prices have limited impact on the desalination industry

Although the rise in water prices has narrowed the gap between the price of tap water and the cost of desalination, the treatment cost of reclaimed water is much lower than that of desalination. At the same time, sewage treatment plants basically cover all cities in the country, and the construction of reclaimed water plants is close to the sewage treatment plants, and the water source is not restricted. However, general desalination projects need to be established in coastal areas or island cities, and the service radius of their products is limited. We believe that reclaimed water has obvious advantages as the city's second water source, and the impact of stepped water prices on the desalination industry is limited.