Investment Rating - Industry Rating: Outperform the market (maintained rating) [5] Core Viewpoints - The "anti-involution" trend is driving quality upgrades in the industry, emphasizing investment opportunities in specialized engineering companies. This trend is expected to improve corporate profitability and increase capital expenditures in green and low-carbon transformations, benefiting specialized engineering firms [1][19][32] - The government is focusing on innovation-driven and green transformation, which is broader than the supply-side structural reforms of 2015. This includes enhancing industry self-discipline and optimizing supply structures through technological upgrades [2][13] Summary by Sections Industry Performance - The construction index fell by 2.5% in the week of July 28 to August 1, underperforming the broader market by 1.3 percentage points. Only the architectural design and services sub-sector maintained an upward trend, with notable individual stock gains [4][26] Investment Recommendations - Key investment opportunities include: 1. Cement Engineering: China National Materials (high dividend cement engineering leader, expected dividend yield over 5% in 2025) [19] 2. Metallurgical Engineering: China Steel International (low-carbon metallurgical engineering leader, expected dividend yield of 5.5% in 2025) [19] 3. Steel Structure Manufacturing: Honglu Steel Structure, Jinggong Steel Structure [19] 4. Chemical Engineering: China Chemical, Sanwei Chemical, Donghua Technology, benefiting from rising chemical product prices [19] Key Indicators - As of August 1, 2025, the cement shipment rate was 30%, down 13 percentage points from the previous week, while the asphalt plant operating rate was 33.1%, up 4.3 percentage points [3][20] Structural Changes and Opportunities - The report highlights the importance of focusing on infrastructure investments in regions with high demand, such as Sichuan, Zhejiang, Anhui, and Jiangsu, and recommends local state-owned enterprises and central enterprises involved in major infrastructure projects [32][35] Emerging Trends - The report suggests that the nuclear power sector remains highly attractive, with ongoing investments, and highlights the potential of AI and digital technologies in transforming traditional industries [34][36] Specialized Engineering Investment Targets - The report lists specific companies in specialized engineering fields, including: - China National Materials (Cement) - China Steel International (Metallurgy) - Honglu Steel Structure (Steel Structure) - China Chemical (Chemicals) [20] Conclusion - The overall sentiment is positive towards the construction and specialized engineering sectors, driven by government policies aimed at enhancing industry quality and profitability through technological and structural upgrades [1][19][32]

Group 1 - The Shanghai Composite Index decreased by 0.37%, while the Shanghai Urban Infrastructure Index fell by 0.46%, closing at 1237.37 points with a trading volume of 20.049 billion yuan [1] - The Shanghai Urban Infrastructure Index has increased by 6.04% over the past month and 6.76% over the past three months, but has declined by 1.59% year-to-date [2] - The index series reflects the performance of listed companies influenced by changes in economic and consumption structures, focusing on themes such as intensive, intelligent, and green low-carbon development [2] Group 2 - The top ten weighted stocks in the Shanghai Urban Infrastructure Index include China State Construction (9.44%), China Railway (6.99%), and Poly Development (6.86%) [2] - The index is composed entirely of stocks listed on the Shanghai Stock Exchange, with the industrial sector accounting for 57.81%, real estate for 31.30%, and materials for 10.90% [3] - The index samples are adjusted biannually, with changes implemented on the next trading day following the second Friday of June and December [3]

Core Insights - The construction industry is expected to outperform the market in the second half of 2025, driven by improvements in asset quality and a potential recovery in demand [1][4] - Downstream demand remains weak, leading to accelerated balance sheet contraction among construction companies [1][4] - Infrastructure investment is anticipated to become a key driver for expanding domestic demand and stabilizing growth [3][4] Summary by Sections Industry Performance - In the first half of 2025, the total contract amount for new projects in the construction industry reached 25 trillion yuan, a year-on-year increase of 22.5%, although still significantly lower than levels in 2022-2023 [1][30] - The industry is experiencing a decline in new orders and revenue, but signs of a profitability turning point are emerging as some local construction companies accelerate the collection of receivables and repay existing debts [1][4] Inventory Cycle Perspective - The construction industry is nearing the end of a "passive inventory replenishment" phase, characterized by a lagged response of inventory fluctuations to changes in downstream demand [2][77] - Since 2021, the industry has entered a phase of passive inventory accumulation due to prolonged project repayment cycles and a concentration of PPP projects transitioning to operational phases [2][82] Infrastructure Investment - Infrastructure investment is seen as a critical measure to expand domestic demand and stabilize economic growth, especially in light of pressures on price indicators and the need for effective investment [3][4] - The government is expected to increase fiscal support for infrastructure projects, particularly in areas related to public welfare and energy security [3][4] Investment Recommendations - The report maintains a positive outlook for the construction sector in the second half of 2025, suggesting that asset quality improvements will align with demand recovery [4] - Recommended stocks include Yaxiang Integration, Zhongyan Dadi, China Railway Construction, and others, which are expected to benefit from the anticipated recovery in infrastructure investment [4][8]

Core Viewpoint - The real estate market in China is experiencing a significant downturn, with the top 100 real estate companies reporting a total sales revenue of 20,730.1 billion yuan from January to July 2025, reflecting a year-on-year decline of 13.3% [1] Group 1: Sales Performance - In July 2025, the sales revenue of the top 100 real estate companies also saw a decline, with a year-on-year drop of 18.2% [1] - The average sales revenue for the top 10 real estate companies in the first seven months was 1,010.3 billion yuan, down 13.6% year-on-year [2] - Among the top 20 real estate companies, only seven firms, including Jianfa Real Estate and Yuexiu Property, reported an increase in sales, while the rest experienced varying degrees of decline [2][3] Group 2: Company Rankings and Changes - Companies like Jindi Group and New Town Holdings saw their sales drop by over 50%, causing them to fall out of the top 20 rankings [3] - Poly Developments, China Overseas Property, and China Resources Land experienced sales declines between 10% and 20%, aligning with industry trends [4] - The top 20 real estate companies saw a reshuffling in rankings, with nine companies improving their positions, while six companies, including Vanke and Longfor Group, saw their rankings decline [4] Group 3: Future Market Outlook - The Central Political Bureau's recent meeting emphasized maintaining policy continuity and stability, suggesting that more supportive measures may be introduced to stabilize the market [5] - The new housing market is expected to continue experiencing low transaction volumes in August, with significant differentiation between cities and projects [5]

Core Viewpoint - Xizi Clean Energy has successfully entered the international market with its shield tunneling machine products, which were developed in collaboration with China Railway Construction Heavy Industry in 2018 [1] Company Summary - Xizi Clean Energy (002534) has engaged in a joint manufacturing project with China Railway Construction Heavy Industry (601186) to produce composite tunnel boring machines [1] - The company's tunneling machines have been exported to countries such as Thailand and Singapore, indicating a successful penetration into the international market [1]

Core Viewpoint - China Railway Construction Heavy Industry Group Co., Ltd. announced a cash dividend of RMB 0.085 per share for the 2024 fiscal year, approved at the annual shareholders' meeting on June 19, 2025 [1][6]. Summary by Sections Dividend Distribution - The total cash dividend distribution amounts to RMB 453,347,245 based on a total share capital of 5,333,497,000 shares [3][5]. - The dividend will be distributed to all shareholders registered with China Securities Depository and Clearing Corporation Limited, Shanghai Branch, as of the close of trading on the registration date [2]. Implementation Method - The dividends for unrestricted circulating shares will be distributed through the clearing system of China Securities Depository and Clearing Corporation Limited, Shanghai Branch [3]. - Shareholders who have completed designated transactions can receive their cash dividends at their designated securities business department on the payment date [3]. Taxation on Dividends - For individual shareholders holding unrestricted circulating shares for over one year, the cash dividend of RMB 0.085 per share is exempt from personal income tax [7]. - For shares held for one year or less, the company will not withhold personal income tax at the time of distribution; tax will be calculated based on the holding period when the shares are sold [7]. - Qualified Foreign Institutional Investors (QFII) will have a 10% corporate income tax withheld, resulting in a net cash dividend of RMB 0.0765 per share [8]. - Hong Kong market investors will also receive a net cash dividend of RMB 0.0765 per share after a 10% withholding tax [8]. - Other institutional investors and corporate shareholders will receive the gross cash dividend of RMB 0.085 per share, responsible for their own tax declarations [9].

Core Viewpoint - The company announced a cash dividend distribution plan, with a payout of RMB 0.085 per share, totaling RMB 453,347,245, approved at the annual shareholders' meeting on June 19, 2025 [1] Dividend Distribution Plan - The cash dividend of RMB 0.085 per share is based on a total share capital of 5,333,497,000 shares [1] - The dividend will be distributed to all shareholders registered with the China Securities Depository and Clearing Corporation Limited, Shanghai Branch, after the market closes on the registration date [1] Taxation on Dividends - For individual shareholders holding shares for over one year, the dividend income is exempt from personal income tax, resulting in an actual cash dividend of RMB 0.085 per share [2] - For shares held for one year or less, the company will not withhold personal income tax at the time of distribution; however, tax liabilities will be calculated and deducted by the securities company [2] - The actual tax burden varies based on the holding period, with a 20% tax for holdings of one month or less, and a 10% tax for holdings between one month and one year [2] Distribution to Foreign Investors - Qualified Foreign Institutional Investors (QFII) will have a 10% corporate income tax withheld, resulting in a net cash dividend of RMB 0.0765 per share [3] - Hong Kong market investors will also have a 10% tax withheld, leading to the same net cash dividend of RMB 0.0765 per share [4] - Other institutional investors and corporate shareholders will be responsible for their own tax declarations, with the company distributing the gross dividend amount [4]

Investment Rating - The report maintains a "Buy" recommendation for the construction industry [1] Core Viewpoints - Infrastructure investment growth remains robust, with a broad infrastructure investment growth rate of 8.9% in the first half of 2025, despite a slight decline from previous values [3][30] - Real estate investment continues to face pressure, with a 11.2% year-on-year decline in real estate development investment in the first half of 2025 [44] - The construction sector is experiencing a slight increase in fund holdings, with a fund holding market value ratio of 0.43% in Q2 2025, which is still below the standard allocation ratio of 1.77% [65][66] Summary by Sections Special Debt Issuance - The pace of special debt issuance has accelerated, with a total of 2.16 trillion yuan issued in the first half of 2025, a year-on-year increase of 45% [6][3] - The government plans to issue 4.4 trillion yuan in new local government special bonds in 2025, focusing on investment construction and land acquisition [6] Infrastructure Investment - Fixed asset investment growth has slowed, with a total of 248,654 billion yuan in the first half of 2025, reflecting a 2.8% year-on-year increase [27] - Infrastructure investment remains resilient, with significant growth in the electricity, heat, gas, and water supply sectors, which saw a 22.8% year-on-year increase [35][30] Real Estate Market - Real estate investment and sales continue to decline, with a 3.5% decrease in commodity housing sales area in the first half of 2025 [44] - New construction and completion areas have seen a narrowing decline, with new construction down 20.0% year-on-year but improving from previous months [46] Fund Holdings in Construction - Fund holdings in the construction sector have slightly increased, with a market value of 132.95 billion yuan in Q2 2025, reflecting a 9.24% increase from Q1 2025 [65] - The construction sector remains underweight compared to the standard allocation, indicating potential for growth [65][66] Recommendations - The report recommends focusing on stable growth, high dividends, overseas expansion, and regional construction projects, highlighting companies such as China State Construction, China Railway, and others [3][1]

铁建装备(01786.HK)公告，公司与中国铁建于2025年7月30日订立机械装备及配件销售框架协议，以续 订原机械装备及配件销售框架协议，据此，集团同意于自2026年1月1日起至2028年12月31日止期限内向 中国铁建及╱或其联系人：(i)销售各种类型的大型铁路养路机械；(ii)销售机械及轨道装备、设备及器 材；及(iii)提供其他相关或配套产品及服务，主要包括零部件销售，以及提供产品大修服务及铁路线路 养护服务等。 ...

Investment Rating - The report maintains a "Buy" recommendation for the construction industry [1] Core Viewpoints - Infrastructure investment growth remains robust, with a broad infrastructure investment growth rate of 8.9% in the first half of 2025, despite a slight decline from previous values [3][30] - Real estate investment continues to face pressure, with a year-on-year decline of 11.2% in real estate development investment in the first half of 2025 [45] - The construction sector is experiencing a slight increase in fund holdings, indicating a low allocation compared to standard configuration ratios [66] Summary by Sections Special Bonds Issuance - The issuance of special bonds has accelerated, with a total of 2.16 trillion yuan issued in the first half of 2025, a year-on-year increase of 45% [6] - The government plans to issue 4.4 trillion yuan in new local government special bonds in 2025, focusing on investment construction and land acquisition [6] Infrastructure Investment - Fixed asset investment (excluding rural households) reached 248,654 billion yuan in the first half of 2025, with a year-on-year growth of 2.8% [27] - The investment in the electricity, heat, gas, and water supply sector grew by 22.8% year-on-year, although it showed a decline from the previous month [35] Real Estate Market - The sales area of commercial housing decreased by 3.5% year-on-year in the first half of 2025, with the decline slightly widening [45] - New housing starts decreased by 20.0% year-on-year, but the decline has narrowed compared to previous months [47] Construction Sector Holdings - The fund's holdings in the construction sector increased slightly to 0.43% by the end of Q2 2025, still below the standard allocation ratio of 1.77% [66] - Major state-owned enterprises remain the focus of institutional investors, with significant increases in holdings for companies like China State Construction and Sichuan Road and Bridge [72]