花旗：中国工业_财政部新闻发布会给出积极方向但仍有待预算

Investment Rating - The report maintains a Buy rating on CSCI and CRG, and a Neutral rating on CCCC for China infrastructure constructors. For rail equipment suppliers, CRRC is rated higher than Times Electric and CRSC. In the construction machinery supply chain, Hengli and Sany are rated as Buy, while Zoomlion is rated Neutral [1][3][6]. Core Insights - The Ministry of Finance (MOF) of China announced policies to mitigate local government debt risks and stabilize the property market, which is expected to positively impact infrastructure constructors and rail equipment suppliers by providing more funding for accounts receivable (AR) and initiating new projects [1][3]. - The lack of specific budget details from the MOF may lead to a short-term correction in share prices, presenting a potential buying opportunity for investors [1][3][6]. - The report highlights a significant increase in outstanding AR for constructors in the first half of 2024 compared to the same period in 2023, indicating liquidity issues among local governments [3][6]. Summary by Sections Local Government Debt and Liquidity - The MOF's capacity to issue more bonds and increase the fiscal deficit is noted, although specific bond sizes were not disclosed. This indicates a commitment to addressing local debt issues, which could enhance liquidity for local governments [3][6]. - The report emphasizes that if local government debt issues are not resolved, it could lead to increased provisions for bad debts and delays in AR turnover, particularly affecting constructors [3][6]. Revenue Trends - Most state-owned enterprise (SOE) constructors reported revenue misses in Q2 2024, with CCCC experiencing a 2-3% decline despite a 9% growth in order growth during the same period [6]. - The report illustrates a trend of declining revenue growth among major SOE constructors in Q2 2024 compared to Q1 2024, with the exception of CSCI [6].