CITIC Construction Investment: Process industrial equipment is expected to benefit from the renewal of existing equipment and the construction of coal chemical industry.

CITIC Securities Research Report states that the cyclicality of the process industry is evident, and capital expenditures in the petrochemical industry are expected to decrease significantly by over 20% in 2024. Investment planning in the northwest coal chemical industry is being vigorously promoted, which is expected to bring marginal changes to the new market. In the existing market, equipment renewal policies continue to be enforced, subsidies are gradually implemented, providing medium to long-term resilience for investment in process industry equipment. Process equipment combines both dynamic and static elements, with a vast system involving compressors, pumps, seals, air separation equipment, valves, instruments, and control systems, among many others, all growing into leading companies with domestic and international competitiveness. In the current situation where the recovery of the industry fundamentals still needs to be gradually validated, it is recommended to focus on four logical main lines: coal chemical industry, existing asset renewal, going global, and domestic substitution.