CHINA LESSO(HK:02128) Ge Long Hui·2025-07-24 11:03Group 1 - The central urban work conference emphasizes the shift from large-scale incremental expansion to stock quality improvement and efficiency enhancement, indicating a sustained catalytic phase for urban renewal, particularly in pipeline renovation, which is expected to drive demand for municipal plastic pipes [1] - The scale of existing buildings is substantial, with 3.54 billion buildings and a total construction area of 128 billion square meters, leading to a natural increase in demand for renovation as urban development progresses [1] - The estimated renovation demand for existing buildings is around 2.4 billion square meters, with total investment in pipelines projected to be approximately 4 trillion yuan from 2025 to 2029 [1] Group 2 - The first industry fixed asset investment maintained a robust growth of 6.5% year-on-year in the first half of 2025, supported by high-standard farmland construction initiatives [2] - The subsidy for high-standard farmland is set to increase from 1,300 yuan per mu to 2,400 yuan per mu in 2024, which is expected to enhance agricultural investment [2] - The company has seen a continuous increase in revenue from agricultural pipes since entering the sector in 2021, effectively mitigating the decline in municipal demand [2] Group 3 - The company maintains EPS forecasts of 0.67, 0.74, and 0.82 yuan for 2025-2027, with an adjusted target price of 5.89 HKD, reflecting a 35% increase from the previous target [2] - The company’s revenue structure adjustment has significantly enhanced its ability to resist risks from declining demand in a single sector, leading to an upgraded PE ratio forecast [2]