建筑装饰行业周报：10万亿化债规模确定，建筑板块后续怎么看？

Investment Rating - The report maintains an "Overweight" rating for the construction and decoration industry [1] Core Insights - The introduction of a 10 trillion yuan debt replacement plan is expected to alleviate the financial pressure on local governments, allowing for increased support for infrastructure projects, which will improve the revenue and profits of construction companies [2][3] - The anticipated fiscal policies for next year, including increased deficits and expanded special bond issuance, are expected to enhance the industry's outlook [5][9] - The report highlights the potential for significant asset and liability repair for construction companies due to the repayment of outstanding debts using part of the debt replacement funds [3][9] Summary by Sections Industry Investment Rating - The construction and decoration industry is rated as "Overweight" [1] Debt Replacement Plan - A total of 10 trillion yuan in debt replacement resources has been confirmed, with 6 trillion yuan allocated for local government debt replacement over three years, and an additional 4 trillion yuan from new special bonds over five years [3][17] - This plan is expected to significantly reduce the hidden debt burden from 14.3 trillion yuan to 2.3 trillion yuan by 2028, easing financial constraints on local governments [3][17] Fiscal and Monetary Policies - The Ministry of Finance plans to implement more robust fiscal policies next year, including utilizing available deficit space and expanding the issuance of special bonds [5][9] - Monetary policy is also expected to become more accommodative, with potential interest rate cuts and increased liquidity to support government bond issuance [6][9] Market Dynamics - The construction sector's valuation remains low, with institutional holdings significantly underweight, indicating potential for valuation recovery as new funds enter the market through ETFs [8][27] - The report recommends several undervalued state-owned enterprises and international engineering leaders as key investment opportunities [9][33] Recommendations - Key recommended stocks include China Communications Construction Company, China State Construction Engineering, and China Railway Group, among others, which are expected to benefit from the debt replacement and fiscal policies [9][33]