Guotai Junan released a research report saying that 2023 marks the 10th anniversary of the "Belt and Road Initiative" initiative, and China will host the third "Belt and Road Initiative" Summit Forum for International Cooperation, Zhitong Financial and Economic APP has learned. The bank believes that with the convening of the Sino-Arab summit, the joint construction of "Belt and Road Initiative" has entered a new stage, and is optimistic about investment opportunities in energy development / equipment / transmission and major infrastructure projects in countries along the route.
Guotai Junan's main points are as follows:
The layout of the "Belt and Road Initiative" jointly built by China and Argentina has been continuously improved, and cooperation in the field of energy has been deepening day by day.
Located in the confluence zone of "Belt and Road Initiative", Arab countries are important participants in the Silk Road civilization in history and natural partners in jointly building "Belt and Road Initiative". In 2021, the Sino-Arab trade volume reached 330.3 billion US dollars, an increase of 1.5 times over 10 years ago; in the first three quarters of 2022, the Sino-Arab trade volume reached 319.3 billion US dollars, an increase of 35.28 percent over the same period last year, close to the annual level of 2021. In 2021, China imported 264 million tons of crude oil from Arab countries, accounting for 51.47 percent of the total crude oil imports in the same period. In the field of new energy, China and Arab countries actively expand cooperation in the field of clean energy, such as landscape energy and hydropower, and have implemented a large number of cooperation projects such as the photovoltaic project in Harsa, Qatar, the 186MW photovoltaic industrial park in Egypt, and the EPC project of 165MW photovoltaic power station in Egypt.
"Belt and Road Initiative" is an important starting point for economic, trade and energy cooperation among countries along the route, accelerating the formation of a regional energy connectivity system.
China actively promotes the docking of the "Belt and Road Initiative" initiative with the development plans of Arab countries. Important progress has been made in projects such as the main stadium of the Qatar World Cup, the China-Egypt (and) Teda Suez Economic and Trade Cooperation Zone, and the China-Arab (United Arab Emirates) production capacity Cooperation demonstration Park. China and Arab countries have cooperated with Arab countries in 5G, artificial intelligence, big data, cloud computing and other high-tech fields to become new growth points. China's crude oil is highly dependent on the outside world, and the solution lies in the construction of a diversified energy interconnection system.
Since 2018, China's crude oil production has increased only slightly, while the scale of imports has increased significantly, and the degree of external dependence has continued to increase. China's crude oil consumption self-sufficiency rate has dropped to 28.3% in 2021. Arab and Russia are still the main sources of imports, and the proportion of crude oil imports in the Arab region is slightly higher than that in 2020.
The joint construction of "Belt and Road Initiative" will effectively drive the demand for investment in regional infrastructure, energy, cross-border settlement and other areas.
Since the "Belt and Road Initiative" initiative was put forward, the steady growth in the volume of trade between China and the countries along the Belt and Road will significantly drive investment in infrastructure, energy development, and financial services in the countries along the Belt and Road. Investment cooperation between China and Argentina in oil exploration, exploitation, transportation and refining has been continuously deepened, and cooperation in the fields of renewable energy such as landscape energy and hydropower has blossomed. Chinese enterprises are expected to continue to strengthen investment in railways, highways, ports, power, communications and other infrastructure of countries along the route, while in the financial field, they will continue to explore cross-border local currency settlement and other monetary cooperation with central banks along the route.
Investment advice:We are optimistic about investment opportunities in areas such as energy development / equipment / transmission and major infrastructure projects driven by "Belt and Road Initiative" investment.
1) Energy development recommends China Electric Power Construction (601669.SH), China Energy Construction (601868.SH), China National Offshore Oil (600938.SH), China Oil Service (601808.SH)
2) Energy equipment recommended Weisheng Information (688100.SH), Mingyang Intelligence (601615.SH), benefit from Dongfang Electric (600875.SH)
3) Energy transmission recommended COSCO Marine Energy (600026.SH) and Merchants Steamship (601872.SH)
4) major infrastructure projects recommend China Construction (601668.SH), China Rallway (601390.SH), China Railway Construction Corporation (601186.SH), China Timber International (600970.SH), etc.