建筑装饰行业2025年投资策略：回归本源、发展中渐进修复，聚焦成长、大变局中开新局

Investment Rating - The report rates the construction and decoration industry as "Buy" [1]. Core Viewpoints - The report emphasizes a gradual recovery in the industry, focusing on growth and new opportunities amid significant changes [1]. - It suggests that the demand side will benefit from debt reduction policies and improved local government credit, while the supply side will see continuous improvement in corporate operations under financial and market value assessments [1]. - The report identifies three main investment directions for 2025: valuation recovery, performance growth, and mergers and acquisitions [1]. Summary by Sections Investment Highlights - The construction and decoration sector has underperformed compared to the broader market, with a cumulative increase of 7.2% against the Shanghai Composite Index's 11.3% as of November 27, 2024 [28][30]. - Key sub-sectors such as chemical engineering, housing construction, and municipal infrastructure have shown strong performance, while others like steel structure and decoration have faced declines [28][29]. Valuation Recovery Direction - The report anticipates that the construction investment will maintain moderate single-digit growth, supported by debt reduction and counter-cyclical policies [1]. - It highlights that central enterprises are expected to see valuation recovery due to improved operational focus and financial assessments [1]. Growth Direction - The report notes that effective investments and a focus on national security will drive long-term growth in specialized and international engineering sectors [1]. - It mentions that international engineering contracts signed by Chinese firms reached USD 171.7 billion in 2024, reflecting a 22.1% year-on-year increase [1]. Mergers and Acquisitions Direction - The report indicates that frequent policies on mergers and acquisitions present investment opportunities, particularly in areas of industry competition and changes in control [1]. - It suggests that state-owned enterprises can resolve competition issues through restructuring, with a focus on companies like Huadian Engineering and China Communications Construction [1].