建筑装饰行业专题研究：增长及回款承压，重视估值优势

Investment Rating - Investment recommendation: Outperform the market (maintained) [6] Core Viewpoints - The construction industry is facing pressure on growth and cash flow, while industry concentration continues to rise. The issuance of special bonds in the second half of the year may accelerate, alleviating funding pressures for infrastructure projects and easing profit and cash flow pressures for companies [3][9][10]. Summary by Sections Overall: Cash Flow and Growth Pressure, Continued Increase in Concentration - A sample of 20 construction companies, including central state-owned enterprises, international engineering firms, and local state-owned enterprises, shows that growth momentum is weakening, with median growth rates for new contracts, revenue, and net profit attributable to shareholders for 2024H1 at +2.4%, -1.4%, and -2.1% respectively. The industry concentration continues to increase, with sample companies accounting for 28% of total revenue in 2024H1, up from 26% in 2023H1 [9][12][13]. Sub-segment: Growth and Cash Flow Under Pressure, International Engineering Performs Better - The "one profit and five rates" comparison shows that international engineering firms outperform central state-owned enterprises, which in turn outperform local state-owned enterprises. In 2024H1, the profit growth rates for leading central state-owned enterprises were +3.7% for China Energy Engineering, +2.1% for China Communications Construction, and +1.3% for China Nuclear Engineering [25][26]. Investment Recommendations: Focus on Central State-owned Enterprises with Valuation Advantages and High Dividends - The report suggests focusing on two types of targets: 1) Central state-owned enterprises with low valuations and good dividends, benefiting from increased industry concentration, such as China Construction, China Railway Construction, and China Communications Construction; 2) Companies actively transforming and breaking into overseas markets, such as China National Materials, China Steel International, and China Chemical Engineering [9][10][27].