建筑装饰行业2024年三季报前瞻：行业投资承压，三季度企业收入、利润延续上半年弱态势

Investment Rating - The report maintains an "Overweight" rating for the construction decoration industry, indicating a positive outlook for the sector in the upcoming quarters [1]. Core Insights - Traditional infrastructure investment faces pressure, but a shift in central policy is expected to boost investment elasticity. Infrastructure investment from January to August 2024 showed a year-on-year increase of 7.9%, with non-electric infrastructure investment up by 4.4% [2]. - Local government investment is slowing down, and companies are focusing on project quality, leading to continued pressure on revenue and profits for Q1-Q3 2024. The report predicts varying net profit growth rates for key companies, with some expected to see declines of over 10% [2][3]. - Weak investment is likely to catalyze a valuation recovery for central state-owned enterprises (SOEs). The current price-to-earnings (PE) ratio for the construction sector is at 8.9X, and the price-to-book (PB) ratio is at 0.73X, both near historical lows [2]. - The report suggests that under the backdrop of a strong economic growth target for 2024, there is significant room for infrastructure investment, particularly benefiting central SOEs. Key recommendations include China Railway, China Railway Construction, and China Communications Construction [2]. Summary by Sections Investment Outlook - The report highlights that the central government's renewed emphasis on fiscal and monetary policy will likely enhance government investment in Q4 2024 and 2025, providing a potential boost to the construction sector [2]. Company Performance Predictions - The report categorizes key companies based on their expected net profit growth for Q1-Q3 2024: - Companies with growth below -10%: China Metallurgical Group, Sichuan Road and Bridge, etc. - Companies with growth between -10% and 0%: China Railway, China Railway Construction, etc. - Companies with growth between 0% and 10%: China Communications Construction, China Energy Engineering, etc. - Companies with growth between 10% and 20%: China Steel International, Northern International [3]. Valuation and Recommendations - The report notes that the construction sector's low valuation presents an opportunity for recovery, especially with ongoing economic stimulus measures. It recommends focusing on central SOEs and highlights specific companies for investment [2].