CHINA STATE CON(03311) 长江证券·2024-06-11 13:31Investment Rating - The investment rating for China State Construction International (3311.HK) is "Buy" and is maintained [3]. Core Views - The Hong Kong government has introduced mandatory measures for construction sites with budgets exceeding 30 million HKD to adopt the Smart Site Safety System (4S), which is expected to enhance safety management in the construction industry [4]. - The market potential for smart construction sites in Hong Kong is estimated to be around 600 million HKD per year, driven by the government's push for safety and innovation in construction [4]. - China State Construction International's subsidiary, Haihong Technology Co., Ltd., is positioned as a leading provider of the 4S system, having developed its C-SMART system with competitive pricing and practical applications tailored to the construction industry [5]. Summary by Sections Event Description - On May 20, 2024, the Hong Kong Development Bureau and the Construction Industry Association launched the 4S labeling program to improve construction site safety management. Starting July 1, 2024, all construction contracts exceeding 30 million HKD must implement the 4S system [4]. Market Opportunity - The CITF (Construction Industry Innovation and Technology Fund) has increased its funding limits to encourage the adoption of the 4S system in private projects, with a significant portion of the funding allocated for purchasing or leasing the system [4]. - The estimated market size for smart construction in Hong Kong is approximately 600 million HKD annually, based on the adoption of CITF's standardized product packages [4]. Company Advantages - China State Construction International's C-SMART system has evolved significantly, offering competitive pricing that is 10%-20% lower than CITF packages, and is better suited for practical use in construction environments [5]. - The company is well-positioned to leverage its experience in Hong Kong to expand into mainland markets, where there is increasing governmental support for smart construction initiatives [5].