关注下半年政策力度，继续推荐水利、洁净室工程等板块

Investment Rating - The report maintains an "Overweight" rating for the construction and decoration industry [1] Core Viewpoints - Infrastructure investment remains stable in the first five months, with high growth rates in water transportation and water management sectors. Attention should be paid to the issuance of special bonds and the continuity of fiscal policies impacting physical investment [2][11] - The construction PMI has shown a slight recovery, indicating an acceleration in construction projects. The expectation of increased fiscal support and improved financing conditions is anticipated to gradually manifest in investment and physical volume [2][11] - The report suggests focusing on state-owned enterprises and local state-owned enterprises with low valuations and stable performance, recommending companies such as China Communications Construction, China Electric Power Construction, and China Railway [2][11] Summary by Sections Industry Dynamics - The report highlights the adjustment of housing provident fund policies in various cities, which is expected to lower the burden on homebuyers and stimulate housing demand [14][15] - The central government has issued opinions on comprehensive river protection and governance, which is expected to boost investment in water-related projects and material demand [16][17] - In the first five months, China's foreign contracted projects saw a 5.4% year-on-year increase in completed turnover, with a 13% increase in new contracts. Notably, contracts in Belt and Road countries grew by 20.7% [18][19] Market Performance - The construction and decoration sector experienced a weekly increase of 3.61%, outperforming the CSI 300 and Wind All A indices [23] - The report lists top-performing stocks in the sector, including Hopson Development and Hangzhou Garden, which have shown significant gains [23]