Hua Yuan Zheng Quan·2025-07-09 06:26Investment Rating - The investment rating for the construction decoration industry is "Positive" (maintained) [4] Core Viewpoints - The construction sector is currently focusing on two main lines: dividends and "Construction+" strategies. The macro liquidity is abundant, and interest rates remain low, leading to a preference for low-volatility, high-dividend, and low-valuation assets. The value of dividend asset allocation continues to rise. Additionally, policies are continuously supporting construction companies to explore new growth avenues through mergers, restructuring, and transformation into new business areas such as new energy, smart manufacturing, digitalization, and operation services [4][12] Summary by Sections Key Recommendations - Recommended companies include Sichuan Road and Bridge, which is deeply involved in infrastructure construction in the Sichuan-Chongqing region, benefiting from a strong order backlog and high profitability. The company’s order scale is expected to reach 291.3 billion yuan by the end of 2024, providing solid growth assurance for the next three years. The dividend policy is continuously optimized, with a commitment to a dividend payout ratio of no less than 60% over the next three years, and a current dividend yield at a relatively high level in the industry [5][11][14] - Attention is also drawn to Jianghe Group, which has maintained its leading position in the industry despite the overall downturn. The company has a strong order expansion capability and is actively returning profits to shareholders, with a projected dividend payout ratio of nearly 98% in 2024, resulting in a dividend yield of approximately 9% [5][18][24] Market Performance - The construction decoration index increased by 0.63% during the week, with sub-sectors such as landscaping, steel structures, and decoration showing significant gains of 4.01%, 3.33%, and 2.13% respectively. A total of 96 stocks in the construction sector rose, with the top five performers being Chengbang Co. (+42.23%), Hangzhou Landscaping (+31.16%), Hopu Co. (+21.35%), Huilv Ecology (+15.65%), and Baijia Technology (+12.50%) [7][37] Structural Investment Opportunities - The report suggests three main lines for structural investment opportunities in the construction sector: 1. Continued investment in regional infrastructure, particularly in the central and western regions and along the "Belt and Road" initiative [7] 2. Valuation recovery of central and state-owned enterprises benefiting from stable dividends and governance improvements [7] 3. Growth potential through transformation and upgrading into new business areas such as smart manufacturing and digitalization [7][12]