建筑行业2025年度投资策略：迈向缩表时代，迎接估值回升

Industry Investment Rating - The construction industry is rated as "Outperform" [99] Core Views - The construction industry is facing multiple pressures, including downstream demand contraction, delayed project payments, and increasing debt pressure, but two positive factors are gradually emerging [64] - Central fiscal policy is expected to become the dominant force in the new round of incremental investment, with a focus on major national strategic projects such as railways, hydropower, nuclear power, and ports [64] - The construction sector is expected to see valuation recovery as asset quality improves and cash flow management strengthens [34] Construction Industry Overview - The CR4 (top four construction companies) non-current asset ratio has been continuously rising, with China Railway Group, China Communications Construction, and China Railway Construction showing significant increases [2] - The growth rate of non-current assets for CR4 companies is significantly higher than revenue growth, leading to lower valuation due to low visibility of asset quality [3] - The scale of accounts receivable off-balance sheet for CR4 companies has been increasing, with capital expenditures and operating capital growing rapidly, dragging down free cash flow [5][6] - The construction sector's total asset net increase in the first three quarters of 2024 was 1.33 trillion yuan, with a five-year compound growth rate of 12.8% [74] Major National Projects - The construction of five major railway lines into Tibet is accelerating, with the total railway mileage in Tibet expected to increase significantly by 2035 [19] - The downstream hydropower development project of the Yarlung Tsangpo River has been officially approved, with an estimated total investment exceeding 1.5 trillion yuan [25][50] - Nuclear power construction is accelerating, with 10 nuclear units approved in both 2022 and 2023, and 11 units approved in 2024 [28] - Coastal port construction investment is recovering, with a year-on-year increase of 16.8% in the first 11 months of 2023 [29] Financial Performance of Construction Companies - The top eight construction central enterprises accounted for 46.1% of the market share in terms of new contract value in the first three quarters of 2024, with overseas orders growing by 14.9% year-on-year [71] - The revenue and net profit of listed construction companies have generally declined, with private enterprises seeing a significant narrowing of their market share [72] - The long-term receivables and other non-current assets of the construction sector reached 931.1 billion yuan and 1.5339 trillion yuan, respectively, by the end of the third quarter of 2024 [74] Investment Opportunities - Focus on low-valuation central construction enterprises such as China Railway Construction, China Communications Construction, and China Railway Group, which are expected to benefit from asset quality improvement and cash flow enhancement [85] - Pay attention to companies involved in major national projects such as nuclear power and hydropower, including Zhongyan Earth, Honglu Steel Structure, and China Nuclear Engineering [85]