Soochow Securities·2025-09-22 13:05Investment Rating - The report maintains an "Overweight" rating for the construction and decoration industry [1] Core Views - Infrastructure investment growth is under pressure, with a cumulative year-on-year increase of 2.0% from January to August, slowing down by 1.2 percentage points compared to the previous month. In August, infrastructure investment saw a year-on-year decline of 5.9% [2][11] - The report highlights that while the construction and real estate sectors face challenges, there is potential for policy support to boost growth, particularly through major infrastructure projects and urban renewal initiatives [2][11] - The report recommends focusing on leading state-owned enterprises in infrastructure, such as China Communications Construction Company, China Electric Power Construction, and China Railway Group, which are expected to see valuation recovery [2][11] Summary by Sections Industry Views - From January to August, the year-on-year growth rates for various sectors are as follows: railway transportation +4.5%, road transportation -3.3%, water conservancy management +7.4%, and public facilities management -1.1%. All sectors showed a slowdown compared to the previous month [2][11] - Cement production from January to August decreased by 4.8% year-on-year, with a notable decline of 6.2% in August alone. The overall revenue and profit in the construction sector remain under pressure, although cash flow has improved [2][11][16] International Expansion - In the first half of 2025, China's overseas contracting projects saw a revenue increase of 9.3% year-on-year, with new contracts growing by 13.7%. Notably, contracts in Belt and Road Initiative countries increased by 21% [3][12] - The report suggests that the ongoing geopolitical tensions and trade frictions may lead to increased infrastructure cooperation abroad, benefiting companies involved in international engineering projects [3][12] Demand Structure and New Opportunities - The report identifies opportunities in the semiconductor cleanroom sector, driven by increased capital expenditures from international semiconductor giants and cloud service providers. Companies like Shenghui Integrated and Yaxiang Integrated are recommended for investment [3][12]