Soochow Securities·2025-06-08 13:35Investment Rating - The report maintains an "Overweight" rating for the construction decoration industry [1] Core Viewpoints - Significant attention is being given to major infrastructure projects, with recommendations for sectors such as water conservancy and cleanroom engineering, which are experiencing structural prosperity [1] - In the first four months of 2025, China's infrastructure investment grew by 5.8% year-on-year, with water management investment increasing by 30.7%, water transport investment by 26.9%, and air transport investment by 13.9% [10][11] - The report highlights the potential for overseas engineering demand to remain robust, particularly in countries involved in the Belt and Road Initiative, with new contract amounts reaching $64.54 billion, a year-on-year increase of 17.4% [11] - The report suggests focusing on companies with transformation layouts in high-demand sectors such as energy conservation, carbon reduction, and new energy-related infrastructure [11] Summary by Sections Industry Dynamics - The central government plans to support urban renewal actions in 20 cities, with a budget exceeding 20 billion yuan, aimed at improving urban infrastructure [13][14] - The Ministry of Housing and Urban-Rural Development will enhance supervision to ensure the implementation of new residential project standards, promoting high-quality construction and the use of new materials [15] Market Performance - The construction decoration sector saw a weekly increase of 1.25%, outperforming the CSI 300 and Wind All A indices, which increased by 0.88% and 1.61%, respectively [18] - Notable stock performances included Zhongheng Design and Chongqing Construction, which saw significant weekly gains [19] Company Recommendations - The report recommends focusing on leading state-owned enterprises and local state-owned enterprises with stable performance and low valuations, such as China Communications Construction, China Electric Power Construction, and China Railway [10][11]