建筑装饰：化债助力建筑央企经营改善，夯实行情基础

Investment Rating - The report maintains a "Buy" rating for the construction and decoration industry [1] Core Views - The performance of major construction state-owned enterprises (SOEs) has been significantly influenced by thematic catalysts leading to improved earnings expectations since 2010. Notable periods include the "Belt and Road" initiative and PPP policies during previous bull markets, while the lack of clear catalysts in the 2019-2021 period resulted in underperformance [2][52] - The current round of debt restructuring is expected to enhance the operational quality of construction SOEs, with an estimated 1.2 to 1.6 trillion yuan allocated for settling receivables, potentially improving net assets by over 8% and net profits by over 7% [4][55] Summary by Sections 1. Historical Performance of Major Construction Stocks - The report reviews the performance of major construction SOEs during various bull markets, highlighting that thematic catalysts have driven superior returns in certain periods, particularly during the "Belt and Road" initiative and PPP policy implementations [2][52] - In the most recent bull market from December 2021 to September 2024, construction SOEs outperformed the broader market due to themes such as steady growth and state-owned enterprise reforms [52] 2. Operational Challenges and Debt Restructuring - The report notes a continuous increase in accounts receivable and contract assets among major construction SOEs, with significant year-on-year growth rates of 28.52% and 30.04% respectively as of Q3 2024 [3][55] - The debt restructuring efforts are expected to alleviate cash flow pressures and improve the financial health of these enterprises, with a focus on settling debts owed by local governments and investment platforms [4][55] 3. Investment Recommendations - The report suggests that the current debt restructuring could serve as a catalyst for a rebound in the construction sector, recommending a focus on companies with high receivables from state-owned entities, such as China Railway, China State Construction, and China Communications Construction [4][55] - The anticipated improvements in profit growth rates for construction SOEs range from 7.1% to 9.4%, driven by enhanced local government financial capabilities and reduced credit risks [4][55]