建筑工程业行业事件快评：财政政策将提升基建现金流和应收款质量和业绩速度

Investment Rating - The report rates the construction engineering industry as "Overweight" with a previous rating of "Overweight" as well [1]. Core Viewpoints - Fiscal policies are expected to enhance cash flow and receivables quality in infrastructure projects, leading to improved performance speed [1][4]. - The report highlights that central state-owned enterprises in infrastructure have low valuations and performance expectations, with potential upside of 12-93% for leading companies [2][5]. - Recommended stocks include those with a price-to-book (PB) ratio less than 1 and a dividend yield greater than 2.25%, particularly focusing on central state-owned enterprises with low performance bases in Q3 2023 [4][10]. Summary by Sections Fiscal Policy Impact - Recent fiscal policies, including the early release of a 100 billion yuan central budget investment plan for 2025, are set to support local governments in accelerating project implementation [3]. - The report notes that the central state-owned enterprises are the primary beneficiaries of these policies, with significant elasticity in their operations and low valuations [3][4]. Company Recommendations - Specific companies recommended include: - China State Construction (PB 0.6, dividend yield 4.3%) - China Railway Construction (PB 0.51, dividend yield 3.7%) - China Communications Construction (PB 0.61, dividend yield 2.9%) [4][10]. - The report emphasizes the importance of selecting companies with strong order growth and low PB ratios, particularly those with a solid performance in Q3 2023 [10][23]. Market Dynamics - The report indicates that leading companies in the construction sector have historically traded at higher valuations, suggesting potential for revaluation in the current market context [5][12]. - It also highlights the expected acceleration in project approvals and implementations due to improved government fiscal health, which is likely to enhance the overall performance of the construction sector [4][10]. Performance Metrics - The report provides detailed performance metrics for recommended companies, including order growth rates and profit margins, indicating a positive outlook for those with low PB ratios and high dividend yields [4][10][23]. - For instance, China Energy Engineering reported a 14% increase in orders, while China Railway's orders decreased by 15% [10][23]. Conclusion - The report concludes that the construction engineering industry is poised for growth driven by supportive fiscal policies and the potential for revaluation of leading companies, making it an attractive investment opportunity [1][4][10].