建筑装饰板块经营承压，现金流和减值同比改善

Investment Rating - The report maintains an investment rating of "Outperform the Market - A" for the construction and decoration sector [4]. Core Insights - The construction and decoration sector is under pressure, with a year-on-year decline in revenue and net profit for the first half of 2025. Revenue reached approximately 3.97 trillion yuan, down 5.93%, and net profit was about 915.21 billion yuan, down 6.72% [1][15]. - The steel structure segment showed positive revenue growth of 2.46% year-on-year, while other sub-segments experienced varying degrees of decline. The chemical engineering segment achieved a notable net profit growth of 10.84% [1][24]. - The overall cash flow situation has improved, with a net outflow of 4.971 trillion yuan, which is 204 billion yuan less than the previous year [2][28]. Summary by Sections Industry Dynamics - The construction and decoration sector faced operational challenges in H1 2025, primarily due to local fiscal pressures and a slowdown in infrastructure investment growth. The real estate investment continues to decline, affecting downstream demand [1][15]. - The revenue growth rates for Q1 and Q2 of 2025 were -0.27% and -5.63%, respectively, with net profit growth rates of -8.55% and -4.53% [1][15]. Financial Performance - The sector's gross profit margin was 10.02%, a decrease of 0.15 percentage points year-on-year, while the net profit margin was 2.87%, down 0.04 percentage points [2][26]. - The total credit and asset impairment losses amounted to approximately 262 billion yuan, a reduction of 46 billion yuan year-on-year [2][27]. Company Performance - The eight major state-owned enterprises in the construction sector reported a combined revenue of about 3.28 trillion yuan, down 4.42% year-on-year, and a net profit of 769 billion yuan, down 7.47% [2][29]. - Notably, China Chemical and China Construction reported positive net profit growths of 9.26% and 3.24%, respectively [2][29]. Market Performance - The construction and decoration sector saw a decline of 1.37% in the week from September 1 to September 5, underperforming compared to major indices [35][36]. - The report highlights that several strategic national projects have commenced since July, which may lead to marginal improvements in industry demand [1][35]. Investment Opportunities - The report suggests focusing on undervalued construction state-owned enterprises, construction design leaders, and quality international engineering firms, particularly those involved in the Belt and Road Initiative [11][12].