专项债发行持续高位，行业基本面有望改善

Investment Rating - The industry investment rating is maintained at "Outperform the Market - B" [5] Core Insights - The issuance of special bonds remains high, and the industry fundamentals are expected to improve due to increased government financing and infrastructure investment [2][16] - The central government has issued guidelines to accelerate urban renewal actions, which will likely boost infrastructure investment and benefit construction companies focused on municipal projects [2][17] - The overall financial indicators for construction enterprises are anticipated to improve, driven by a more proactive fiscal policy and the acceleration of infrastructure funding [2][11] Summary by Sections Industry Dynamics - The central bank reported that as of April, the broad money (M2) balance was 325.17 trillion yuan (yoy +8%), and the narrow money (M1) balance was 109.14 trillion yuan (yoy +1.5%) [16] - The total social financing stock was 424.0 trillion yuan (yoy +8.7%), with a net financing of government bonds amounting to 4.85 trillion yuan (yoy +3.58 trillion yuan) [16] - The issuance of special bonds by local governments in the first four months totaled 20.48 billion yuan, 39.19 billion yuan, 36.34 billion yuan, and 23.01 billion yuan, with April's issuance up 161% year-on-year [16] Market Performance - The construction industry rose by 0.77% from May 12 to May 16, underperforming the CSI 300 index which increased by 1.12% [18] - The chemical engineering sector showed the highest growth at 3.36%, while municipal engineering also performed well [18] Key Focus Stocks - Recommended stocks include major state-owned construction enterprises such as China State Construction, China Communications Construction, China Railway Construction, and China Railway Group, which are currently undervalued [2][11][12] - The report highlights the potential for growth in companies involved in urban renewal and infrastructure projects, particularly those with strong financial health and market positioning [2][12] Company Announcements - Significant contracts were awarded, including a 7.88 billion yuan contract by China Nuclear Engineering and a 78.80 billion yuan contract by Shaanxi Construction [29] Industry Valuation - As of May 16, the construction and decoration industry had a price-to-earnings (P/E) ratio of 10.75 and a price-to-book (P/B) ratio of 0.77, indicating a slight increase from the previous week [24] - The report identifies the lowest P/E ratios among major construction companies, with China Railway Group at 5.29 and China State Construction at 5.09 [24][25]