East Money Securities·2025-10-13 08:37Investment Rating - The report maintains a "stronger than the market" investment rating for the construction decoration industry [3]. Core Viewpoints - The report highlights the renewed US-China tariff conflict, emphasizing the potential benefits for domestic infrastructure and high-demand segments [14]. - It notes an increase in special bond net financing, with significant rapid deployment of special treasury funds, which supports investment stability [15]. Summary by Sections Investment Recommendations - Three main investment lines are recommended for the second half of 2025: 1. Main Line One: Focus on state-owned enterprises benefiting from national key projects, including low-valuation central enterprises and high-demand local state-owned enterprises. Recommended companies include China Railway Construction, China Railway, China Chemical, China Energy Engineering, China Communications Construction, and China State Construction. Attention is also drawn to China Power Construction and China Metallurgical Group [2]. 2. Main Line Two: Target high-demand segments driven by major strategic projects, with recommendations for companies like Gaozheng Minexplosion, Tiejian Heavy Industry, China Railway Industry, Yipuli, and Zhongyan Dadi, while keeping an eye on Tibet Tianlu and Wuxin Tunnel Equipment [2]. 3. Main Line Three: Invest in sectors empowered by AI, robotics, and semiconductors, recommending companies such as Roman Co., Hongrun Construction, Zhi Te New Materials, Honglu Steel Structure, and Metro Design [2][18]. Market Performance - The construction decoration index rose by 3.62% in the last week, outperforming the overall A-share index by 2.73 percentage points. Notable performers included Guan Zhong Ecological (+96.1%), Xinjiang Jiaojian (+28.9%), and Huajian Group (+25.4%) [13][26]. Financing and Policy Support - As of October 11, 2025, special bonds had a cumulative net financing of 3.19 trillion yuan, surpassing the same period in 2022 and significantly higher than 2023 and 2024. The issuance of special bonds has reached 84% of the annual target [15][17]. - The report indicates that the government is likely to enhance domestic demand stabilization policies in response to external demand fluctuations, benefiting infrastructure and water conservancy sectors [14]. Company Dynamics - Key company updates include significant project wins for China Railway Construction and China State Construction, with total contract values of 630 billion yuan and 62.2 billion yuan, respectively [34].