Smart meter potential market may reach 100 billion yuan

Based on the 345 million user base and the 5 million output base, the potential market capacity of smart water meters nationwide may reach 100 billion yuan, and its replacement for ordinary mechanical water meters has only just begun. Affected by the highly dispersed management system of domestic water companies, the smart meter industry will feature a mild outbreak and it is expected that the compound growth rate of the industry in 2014-2015 will exceed 30%.

Urbanization, smart cities and stepped water prices are three-pronged and the industry is expected to accelerate. The continuous promotion of urbanization will bring about a double increase in the total demand of water meters and the proportion of smart water meters. Smart cities will be based on the intelligent management of water and gas heat, and the water price of ladders will be based on the intelligent metering of terminal water meters. Currently, there are three major policies. The obvious trend of strengthening has jointly contributed to a good policy environment for the current smart meter industry to break out mildly.

After-sales service barriers, technical barriers, and purchasing tendencies of water companies make the smart water meter industry different from the ordinary mechanical water meter industry, presenting a highly concentrated competitive landscape. Smart water meter sales unit price 5 times the mechanical water meter, but involves the basic people's livelihood, after-sales service requirements are extremely high, SMEs are difficult to break through after-sale barriers. At the same time, early technical failures of smart water meters are frequent, and there is no unified technical standard route at present, which leads to high requirements for enterprise technology research and development and innovation and creates high-tech barriers. After years of experience in purchasing, there is a tendency for water companies to concentrate on purchasing by large companies, and it is expected that this trend will be difficult to reverse, which may lead to further increase in industry concentration.

According to industry estimates, the smart meter industry is expected to achieve a growth rate of around 30% in the next two years, and believes that there is a further increase in market concentration. At present, the listed leading companies in the industry, including Sanchuan and Xintian, are the only companies with major water resources accumulated in the company's main channels. The growth momentum is strong. The latter focuses on smart water meters, and the production capacity will be released in the next 2 years. It is expected to usher in explosive growth with great performance flexibility.

At the same time there are uncertainties, such as the decline in the macroeconomic downturn in the real estate industry, which led to decline in demand for water meters; new urbanization progress is lower than expected; smart city construction progress is lower than expected; step water price implementation progress is lower than expected.