Summary of Conference Call on the Construction Industry Industry Overview - The construction industry has initiated an anti-involution campaign, with responses from state-owned enterprises (SOEs), national enterprises, and private enterprises aimed at avoiding unfair competition such as bid-rigging and lowest-bid wins, which is expected to improve the industry ecosystem [1][2] - Major infrastructure projects like the Yalong River Hydropower Station, with an investment scale of 1.2 trillion yuan, are anticipated to become new growth points for infrastructure demand, alongside projects like the Zhejiang-Jiangxi-Guangdong Canal and the Pinglu Canal [1][3] Core Insights and Arguments - The construction industry is currently at the bottom of the chip, stock price, and supply-demand structure, with a strong push for steel structure buildings expected to increase penetration rates, shifting market expectations from pessimistic to optimistic [1][3] - Historical data indicates that supply-side contraction can lead to economic improvement, and reducing vicious competition can enhance corporate profit levels; policy support and improved market conditions are crucial for the sustainable development of the construction industry [1][4][5] - The construction industry does not have fixed capacity, allowing for flexible adjustments based on demand changes, which differentiates it from other cyclical industries like cement and steel [7] Investment Recommendations - Focus on Honglu Steel Structure, which is expected to benefit from rising steel prices, leading to a dual boost in valuation and performance; it has greater earnings elasticity compared to traditional SOEs [1][6] - Attention should also be given to undervalued SOEs such as China Power Construction and China Energy Construction, which may see valuation recovery as competition improves [9] - Other recommended stocks include high-dividend SOEs like China State Construction and Sichuan Road & Bridge, which are expected to improve operational quality [9] Marginal Changes and Policy Catalysts - The construction industry is experiencing its first revenue decline in 2024 due to severe internal competition, with leading firms reporting economic profits of only 1-2% [2] - The anti-involution measures, including avoiding bid-rigging and illegal subcontracting, are expected to bring about significant industry changes [2] Future Development Conditions - The sustainable development of the construction industry relies on continued policy support and market environment improvements, including the promotion of large-scale infrastructure projects [5] - Reducing vicious competition and enhancing corporate profitability are essential for future growth [5] Potential Risks and Opportunities - The steel structure industry may see similar opportunities as the steel sector experiences price increases due to potential joint production cuts and rising demand expectations [8] - Companies like Zhongcai International and Zhonggong International, which serve downstream cement and steel plants, may face short-term challenges due to reduced capital expenditures but could benefit from improved cash flow conditions in the long run [9]

Group 1: Metal Sector - China Hongqiao's net profit forecast for 2024 is CNY 223.72 billion, with a PE ratio of 8.14[12] - Hualing Steel's net profit is projected to increase from CNY 20.32 billion in 2024 to CNY 28.54 billion in 2025, with a PE ratio of 19.72[12] - Xiamen Tungsten's net profit is expected to rise from CNY 17.28 billion in 2024 to CNY 21.01 billion in 2025, with a PE ratio of 22.97[12] Group 2: Construction and Transportation - Sichuan Road and Bridge's net profit is forecasted to grow from CNY 72.10 billion in 2024 to CNY 82.86 billion in 2025, with a PE ratio of 10.35[12] - YTO Express's net profit is expected to decrease from CNY 40.12 billion in 2024 to CNY 35.39 billion in 2025, with a PE ratio of 13.03[12] - China Merchants Highway's net profit is projected to be CNY 55 billion in 2025, with a PE ratio of 14.56[12] Group 3: Chemical and Energy Sector - Yara International's net profit is expected to rise from CNY 9.50 billion in 2024 to CNY 17.94 billion in 2025, with a PE ratio of 30.56[12] - Funiu Power's net profit forecast for 2025 is CNY 28.95 billion, with a PE ratio of 9.18[12] - Huajin's net profit is projected to recover to CNY 0.92 billion in 2025 after a loss of CNY 27.95 billion in 2024[12] Group 4: Strategic Metals and New Materials - Xiamen Tungsten's strategic metal segments are expected to contribute 79% to profits in 2024, with a focus on tungsten and rare earths[21] - Zhongcai Technology's special glass fiber is projected to see significant demand growth due to AI hardware requirements, with expected profits of CNY 0.2 billion in 2024[30] - The company anticipates a profit contribution from special glass fiber of CNY 7.2 billion by 2026[30]

Investment Rating - The industry rating is maintained as "Outperform" [5] Core Viewpoints - The construction sector has seen a significant increase of 7.1% this week, outperforming the Shanghai and Shenzhen 300 index by 5.9 percentage points, driven by infrastructure projects and the rise in specialized engineering and civil explosives sectors [1][29] - The report emphasizes the ongoing trend of "anti-involution" in the industry, suggesting investment opportunities in construction blue chips and steel structure sectors, particularly in the central and western regions of China [1][2][36] Summary by Sections Investment Logic - Four angles to capture investment opportunities in the construction sector: 1. **Price Elasticity**: Companies involved in resource development or trade, such as Northern International and China Railway, are recommended due to expected price increases in resources [2][15] 2. **Supply-Demand Optimization**: Focus on construction blue chips as the anti-involution movement may alleviate price pressures in the industry, with recommendations for quality local state-owned enterprises like Sichuan Road and Bridge [2][17] 3. **Transformation and Upgrading**: Companies with stronger technological attributes are expected to benefit from structural high prosperity in technology-driven infrastructure demands, with recommendations for Tunnel Corporation and China State Construction International [2][21] 4. **Downstream Profit Improvement**: If anti-involution policies improve profitability in steel and cement industries, there will be a rebound in capital expenditure needs, recommending companies like China National Materials and China Steel International [2][23] Market Performance - The report notes a slight decline in the operating rates of petroleum asphalt and cement shipment rates, with the cement shipment rate at 43.07%, down by 2.8 percentage points [3][26] - Central state-owned enterprises showed a positive trend in order data for Q2, with notable growth in orders for companies like China Railway and China Nuclear Engineering [3][26] Key Recommendations - The report suggests focusing on high-growth local state-owned enterprises in regions with strong infrastructure investment, such as Sichuan, Zhejiang, and Anhui, as well as major central state-owned enterprises like China Communications Construction and China Railway [36][37] - Emphasis is placed on the potential of nuclear power and emerging business directions within the construction sector, highlighting the high prosperity of nuclear power investments [38]

Group 1: Company Operations and Innovations - The company has developed a replicable information management system to ensure product quality and timely project execution, essential for multi-base production [2] - A dedicated smart manufacturing R&D team has been established, with increased investment in advanced equipment such as fully automated steel plate cutting lines and intelligent welding robots [2] - The company has implemented a project management platform that integrates with various systems, enhancing efficiency and reducing costs through automated tracking and payroll calculations [2] Group 2: Product and Market Focus - The company’s products are widely used in industrial plants, large venues, airports, train stations, and high-rise buildings, with recent orders primarily in the industrial plant sector [4] - The self-developed welding robots are currently used internally, with limited external sales planned based on business development and application scenarios [3] Group 3: Capacity Expansion and Future Plans - By the end of 2024, the company aims to achieve a steel structure product capacity of 5.2 million tons across ten production bases [5] - The company is considering expanding its overseas business based on market conditions, with indirect exports gradually increasing [6] Group 4: Financial and Performance Outlook - The company reported stable and orderly development in its operations for the first half of the year, with detailed performance to be disclosed in the upcoming semi-annual report [7] - There is ongoing consideration regarding the adjustment of the conversion price for the issued CNY 1.88 billion convertible bonds, contingent on improving company performance [7]

Summary of Conference Call Records Industry Overview - The construction industry is facing severe issues of excessive competition and homogenization, leading to low profitability for companies. In 2024, the total revenue of the industry is expected to decline by 4.3%, with a performance drop of 14% [1][3] - The "anti-involution" policy introduced by the Ministry of Industry and Information Technology aims to eliminate low-price disorderly competition and guide companies to launch new products, which is crucial for the construction industry [2] Key Companies and Their Performance - Central enterprises with good business models and stable cash flows, such as China National Materials and China State Construction International, are expected to benefit from the anti-involution policy due to their strong net profit performance and growth, making them suitable for dividend stock allocation [1][4] - Honglu Steel Structure has seen an increase in production and sales from 2021 to 2024, but its profits have fluctuated significantly, primarily due to steel price volatility. The net profit per ton dropped from 280 RMB in 2021 to 110 RMB in 2024 [1][6] - Zhongguang International and China National Materials are likely to benefit from improved domestic corporate profits, alleviating debt issues and encouraging investment in green technology upgrades [1][9] Market Dynamics - The rise in steel prices has a significant impact on companies like Honglu Steel Structure, which benefits from holding large inventories. The pricing strategy is based on current prices plus processing fees [1][5] - The construction sector may benefit from improved operational quality and valuation recovery due to the anti-involution policy [2] Challenges and Opportunities - The main challenges for the construction industry include excessive competition, homogenization, and issues such as blind expansion and high debt levels, which have led to low profitability [3][11] - Opportunities arise if the Chinese economy can break the deflation spiral and achieve a new growth cycle, leading to demand-side growth. Additionally, increased investment in green technology and the promotion of smart manufacturing will provide new development momentum for construction companies [11] Future Outlook - Honglu Steel Structure's future performance will depend on several factors, including market share improvement, macroeconomic conditions, and advancements in smart manufacturing that can reduce costs significantly [8] - The overall improvement in the competitive environment due to breaking the deflation spiral and healthy price increases will be beneficial for the construction industry and related companies [10]

Investment Rating - The industry investment rating is "Positive" and maintained [11] Core Insights - The China Iron and Steel Association held a meeting on July 15, proposing strict control of new capacity and promoting the collaborative development of the steel structure construction industry [2][8] - The trend of reducing "involution" in the steel industry is expected to support steel prices, with measures to control crude steel production and eliminate backward capacity [14] - The promotion of steel structures is anticipated to enhance standards and penetration rates, addressing issues like low penetration in residential buildings and high costs [14] - The report emphasizes the performance elasticity of Honglu Steel Structure, highlighting its potential for profit recovery with rising steel prices and improved sales policies [14] Summary by Sections Industry Overview - The meeting emphasized the need for a new capacity governance mechanism to prevent overcapacity risks and promote healthy competition in the steel industry [14] - The focus is on data governance and policy coordination to maintain supply-demand balance [14] Market Trends - The report notes that the trend of reducing "involution" may lead to a potential increase in steel prices, supported by government policies aimed at structural adjustment [14] - The steel structure market is expected to expand as policies promote its adoption in various construction sectors [14] Company Focus - Honglu Steel Structure is highlighted for its dual performance drivers, with profit recovery expected as steel prices rise and operational efficiencies improve through automation [14] - The company is positioned as a high-elasticity investment opportunity, with significant upside potential if market conditions improve [14]

证券代码：002541 证券简称：鸿路钢构 公告编号：2025-046 债券代码：128134 债券简称：鸿路转债 本公司及董事会全体成员保证信息披露内容的真实、准确和完整，没有虚假 记载、误导性陈述或重大遗漏。 一、董事会会议召开情况 安徽鸿路钢结构（集团）股份有限公司（以下简称"公司"）第六届董事会第二十二 次会议于 2025 年 7 月 11 日以送达方式发出，并于 2025 年 7 月 18 日在公司会议室以现场 的方式召开。会议应出席董事 5 人，实际出席董事 5 人，符合召开董事会会议的法定人数。 会议由董事长万胜平先生主持，公司全体监事、高级管理人员列席了会议。本次会议的召 集、召开符合《公司法》和《公司章程》的有关规定，出席会议的董事以书面表决的方式 通过了以下决议，决议合法有效。 《关于不向下修正"鸿路转债"转股价格的公告》（公告编号：2025-045 ），详见公司 指定信息披露媒体《证券时报》、《中国证券报》、《上海证券报》、《证券日报》和巨潮资讯 （http://www.cninfo.com.cn）。 安徽鸿路钢结构（集团）股份有限公司 第六届董事会第二十二次会议决议公告 二、董事会会议 ...

特别提示 4、转股期限：2021 年 4 月 15 日至 2026 年 10 月 8 日 5、自 2025 年 6 月 30 日至 2025 年 7 月 18 日期间，公司股票已有十五个交 易日的收盘价低于当期转股价格（即 32.08 元/股）的 85%（即 27.27 元/股）的 情形，已触发"鸿路转债"转股价格的向下修正条款。 6、2025 年 7 月 18 日，公司召开第六届董事会第二十二次会议，审议通过 了《关于不向下修正"鸿路转债"转股价格的议案》，公司董事会决定本次不向 下修正"鸿路转债"转股价格；自本次董事会审议通过后的首个交易日起的两个 月内（即 2025 年 7 月 19 日至 2025 年 9 月 18 日），如再次触发"鸿路转债"转 股价格向下修正条款，亦不提出向下修正方案。敬请广大投资者注意投资风险。 一、可转换公司债券发行上市概况 | 证券代码:002541 | 证券简称:鸿路钢构 | 公告编号:2025-045 | | --- | --- | --- | | 债券代码:128134 | 债券简称:鸿路转债 | | 安徽鸿路钢结构(集团)股份有限公司 关于不向下修正"鸿路转债"转股价 ...

Investment Rating - The investment rating for the company is "Buy" and it is maintained [9] Core Insights - The company has made significant advancements in intelligent manufacturing, establishing a dedicated R&D team for smart manufacturing, and achieving progress in areas such as laser cutting, intelligent assembly, intelligent welding, and intelligent spraying [2][6][55] - The projected annual steel structure production for 2024 is 4.51 million tons, with estimated welding labor costs of 319 RMB per ton. If the robot replacement rate reaches 50%, labor costs could decrease by over 100 RMB per ton [7][2] Summary by Sections Traditional Steel Structure Production Process - The traditional steel structure manufacturing process consists of nine main steps: raw material treatment, cutting and beveling, assembly and positioning, main weld seam welding, assembly and hole-making, secondary welding, surface spraying, and quality inspection [5][17] Breakthroughs in Intelligent Manufacturing - The company has initiated intelligent manufacturing R&D early, focusing on laser cutting, intelligent assembly, intelligent welding, and intelligent spraying. Key developments include: 1. Laser cutting machines: Over 800 units have been implemented since 2022, achieving smart cutting through digital integration [6][65] 2. Master Riveting Workstation: Set to upgrade in 2025, enhancing efficiency and quality in assembly [6][67] 3. Welding robots: Transitioning from external procurement to in-house development, with significant contracts signed for robot purchases [6][70] 4. Intelligent spraying: Continuous advancements in smart spraying lines to improve efficiency and quality [6][55] Future Profit Gains from Intelligent Production - The replacement of welders with robots is expected to significantly reduce labor costs, with potential cost savings of over 100 RMB per ton at a 50% replacement rate. Increased production capacity could further lower costs, with estimates suggesting a reduction of 15-30 RMB per ton as production scales up to 6 million and 8 million tons respectively [7][2]

Investment Rating - Industry rating is maintained at "Outperform the Market" [5] Core Viewpoints - Infrastructure investment continues to support economic stability, with expectations for increased fiscal efforts in the second half of the year to drive high growth in infrastructure investment [1] - Real estate development investment has shown a decline of 11.2% year-on-year for the first half of 2025, while narrow and broad infrastructure investments have increased by 4.6% and 8.9% respectively [1] - Cement demand is stabilizing, with a production decline of 4.3% year-on-year in the first half of 2025, but a potential price rebound is anticipated due to local price increases in certain regions [3] - Flat glass production has decreased by 4.3% year-on-year in the first half of 2025, with market demand remaining stable despite seasonal impacts [4] Summary by Sections Infrastructure Investment - In June, infrastructure investment growth slowed, attributed to reduced fiscal spending and weather disruptions, but remains crucial for economic stability [1] - The issuance of long-term special government bonds is expected to further support infrastructure investment [1] Real Estate Market - Real estate sales area decreased by 3.5% year-on-year in the first half of 2025, with new construction area down by 20% [2] - Construction area saw a decline of 9.1% year-on-year, while completion area dropped by 14.8% [2] Cement Industry - Cement production in the first half of 2025 was 815 million tons, down 4.3% year-on-year, with a slight recovery in shipment rates observed in July [3] - The average cement price as of July 11 was 352 RMB per ton, down 43 RMB year-on-year [3] Glass Industry - Flat glass production in the first half of 2025 was 48.497 million weight cases, a decrease of 4.3% year-on-year, with inventory levels remaining high [4] - The price of 5mm float glass was 63.2 RMB per weight case as of July 10, showing a slight increase [4]