Summary of Conference Call on the Construction Industry Industry Overview - The construction industry has initiated an anti-involution campaign, with responses from state-owned enterprises (SOEs), national enterprises, and private enterprises aimed at avoiding unfair competition such as bid-rigging and lowest-bid wins, which is expected to improve the industry ecosystem [1][2] - Major infrastructure projects like the Yalong River Hydropower Station, with an investment scale of 1.2 trillion yuan, are anticipated to become new growth points for infrastructure demand, alongside projects like the Zhejiang-Jiangxi-Guangdong Canal and the Pinglu Canal [1][3] Core Insights and Arguments - The construction industry is currently at the bottom of the chip, stock price, and supply-demand structure, with a strong push for steel structure buildings expected to increase penetration rates, shifting market expectations from pessimistic to optimistic [1][3] - Historical data indicates that supply-side contraction can lead to economic improvement, and reducing vicious competition can enhance corporate profit levels; policy support and improved market conditions are crucial for the sustainable development of the construction industry [1][4][5] - The construction industry does not have fixed capacity, allowing for flexible adjustments based on demand changes, which differentiates it from other cyclical industries like cement and steel [7] Investment Recommendations - Focus on Honglu Steel Structure, which is expected to benefit from rising steel prices, leading to a dual boost in valuation and performance; it has greater earnings elasticity compared to traditional SOEs [1][6] - Attention should also be given to undervalued SOEs such as China Power Construction and China Energy Construction, which may see valuation recovery as competition improves [9] - Other recommended stocks include high-dividend SOEs like China State Construction and Sichuan Road & Bridge, which are expected to improve operational quality [9] Marginal Changes and Policy Catalysts - The construction industry is experiencing its first revenue decline in 2024 due to severe internal competition, with leading firms reporting economic profits of only 1-2% [2] - The anti-involution measures, including avoiding bid-rigging and illegal subcontracting, are expected to bring about significant industry changes [2] Future Development Conditions - The sustainable development of the construction industry relies on continued policy support and market environment improvements, including the promotion of large-scale infrastructure projects [5] - Reducing vicious competition and enhancing corporate profitability are essential for future growth [5] Potential Risks and Opportunities - The steel structure industry may see similar opportunities as the steel sector experiences price increases due to potential joint production cuts and rising demand expectations [8] - Companies like Zhongcai International and Zhonggong International, which serve downstream cement and steel plants, may face short-term challenges due to reduced capital expenditures but could benefit from improved cash flow conditions in the long run [9]

| 股票简称 | 股票代码 | 限售股类型 | 解禁股数 | | --- | --- | --- | --- | | 学大教育 | 000526 | 股权激励限售流通 | 127.62万 | | 亚钾国际 | 000893 | 增发A股原股东配售上市 | 1.11亿 | | 上海电力 | 600021 | 增发A股原股东配售上市 | 2亿 | | 四川路桥 | 600039 | 股权激励限售流通 | 367.08万 | | 海正药业 | 600267 | 股权激励限售流通 | 703.09万 | | 申能股份 | 600642 | 股权激励限售流通 | 25.84万 | | 中泰化学 | 002092 | 股权激励限售流通 | 355.35万 | | 沧州明珠 | 002108 | 股权激励限售流通 | 700.77万 | | 常润股份 | 603201 | 发行前股份限售流通 | 6539.4万 | | 盛新锂能 | 002240 | 股权激励限售流通 | 296.7万 | | 川发龙蟒 | 002312 | 股权激励限售流通 | 35.59万 | | 华星创业 | 300025 | 增发A股原股东配售上市 ...

Report Summary 1. Report Industry Investment Rating - There is no information regarding the report's industry investment rating provided in the content. 2. Core Viewpoint of the Report - The report regularly summarizes the latest information on private exchangeable bond (Private EB) projects obtained from public channels and conducts basic element tracking on private exchangeable bond projects. It should be noted that the private issuance terms and the issuance process may be subject to change, and the final prospectus should be referred to. For the issuance progress, consultation with the relevant lead underwriters is recommended. This week, there is no new project information [1][2]. 3. Summary by Relevant Catalog 3.1 Private EB Project Tracking - **No New Projects This Week**: There is no new project information this week (some projects are not listed due to compliance reasons) [2]. - **List of Existing Projects**: The report lists multiple private EB projects, including details such as bond names, lead underwriters, scales, underlying stocks, project statuses, and update dates. Projects are in two statuses: "Passed" and "Feedback Received". For example, the "Beijing He Xie Heng Yuan Technology Co., Ltd. 2025 Private Placement Exchangeable Corporate Bonds for Professional Investors" with a scale of 6 and underlying stock of Sichuan Shuangma has passed, updated on July 18, 2025; the "Fuda Holding Group Co., Ltd. 2025 Private Placement Exchangeable Corporate Bonds for Professional Investors" with a scale of 12 and underlying stock of Fuda Co., Ltd. has received feedback, updated on July 11, 2025 [3].

Group 1: Metal Sector - China Hongqiao's net profit forecast for 2024 is CNY 223.72 billion, with a PE ratio of 8.14[12] - Hualing Steel's net profit is projected to increase from CNY 20.32 billion in 2024 to CNY 28.54 billion in 2025, with a PE ratio of 19.72[12] - Xiamen Tungsten's net profit is expected to rise from CNY 17.28 billion in 2024 to CNY 21.01 billion in 2025, with a PE ratio of 22.97[12] Group 2: Construction and Transportation - Sichuan Road and Bridge's net profit is forecasted to grow from CNY 72.10 billion in 2024 to CNY 82.86 billion in 2025, with a PE ratio of 10.35[12] - YTO Express's net profit is expected to decrease from CNY 40.12 billion in 2024 to CNY 35.39 billion in 2025, with a PE ratio of 13.03[12] - China Merchants Highway's net profit is projected to be CNY 55 billion in 2025, with a PE ratio of 14.56[12] Group 3: Chemical and Energy Sector - Yara International's net profit is expected to rise from CNY 9.50 billion in 2024 to CNY 17.94 billion in 2025, with a PE ratio of 30.56[12] - Funiu Power's net profit forecast for 2025 is CNY 28.95 billion, with a PE ratio of 9.18[12] - Huajin's net profit is projected to recover to CNY 0.92 billion in 2025 after a loss of CNY 27.95 billion in 2024[12] Group 4: Strategic Metals and New Materials - Xiamen Tungsten's strategic metal segments are expected to contribute 79% to profits in 2024, with a focus on tungsten and rare earths[21] - Zhongcai Technology's special glass fiber is projected to see significant demand growth due to AI hardware requirements, with expected profits of CNY 0.2 billion in 2024[30] - The company anticipates a profit contribution from special glass fiber of CNY 7.2 billion by 2026[30]

Investment Rating - The report maintains a "Buy" rating for the construction and decoration industry, indicating a positive outlook for major projects and regional development strategies [4][10]. Core Insights - The initiation of the Yaxia Hydropower Station signals a clear trend of central government leveraging, with expectations for further major projects and regional development strategies to stabilize overall infrastructure investment and total demand [1][9]. - The report highlights that infrastructure and manufacturing investments are experiencing a high-level continuous decline, with real estate investment, sales, and funding showing significant drops, indicating a core issue of insufficient demand [1][14]. - It is anticipated that fiscal policies will continue to strengthen in the second half of the year, improving the funding situation for infrastructure and accelerating the implementation of physical workloads [1][14]. Summary by Sections Major Projects and Regional Development Strategies - Significant transportation projects are expected, including the China-Kyrgyzstan-Uzbekistan Railway and the New Tibet Railway, with total investments of approximately $8 billion and 960 billion yuan respectively [2][21]. - The report outlines several large canal projects, such as the Pinglu Canal, with a total investment of about 72 billion yuan, which is expected to enhance logistics efficiency and stimulate economic growth [3][26]. - The Xinjiang regional strategy is highlighted, with over 800 billion yuan in coal chemical projects planned, driven by the region's abundant coal resources [7][10]. Key Recommendations - The report recommends major construction enterprises that will benefit from large-scale transportation and water conservancy projects, including China Energy Engineering, China State Construction, and China Railway Construction [10][11]. - It also emphasizes companies involved in coal chemical development in Xinjiang, such as China Chemical Engineering and Donghua Technology, as key beneficiaries of the regional strategy [10][11]. - Companies like Sichuan Road and Bridge are recommended due to their involvement in the construction of the national strategic hinterland [10][11].

Core Viewpoint - The launch of the Yaxia Hydropower Station indicates a clear trend of central government leverage, with expectations for a series of major projects and regional development strategies to stabilize overall infrastructure investment and total demand [1][2] Infrastructure Investment and Major Projects - The central government is expected to introduce significant projects and regional strategies to maintain infrastructure investment and total demand, especially in light of declining economic indicators such as fixed asset investment and real estate sales [2][6] - Key upcoming projects include major transportation initiatives like the China-Kyrgyzstan-Uzbekistan Railway and the New Tibet Railway, with substantial investments planned [6][10] Beneficiaries of Infrastructure Projects - Recommended beneficiaries include leading state-owned construction enterprises such as China Energy Engineering, China State Construction, and China Railway Construction, which are expected to benefit from large-scale infrastructure projects [1][7] - Specific companies highlighted for their roles in construction and materials include China Communications Construction, China Railway Group, and regional players like Qing Song Jian Hua in Xinjiang [1][10] Canal Projects and Economic Impact - The development of major canal projects is anticipated to enhance logistics efficiency and stimulate economic growth, with significant investments planned for projects like the Pinglu Canal and the Zhejiang-Jiangxi-Guangdong Canal [11][14] - The estimated total investment for these canal projects is approximately 620.4 billion, which is expected to provide strong support for investment in 2023 [11][14] Xinjiang Regional Strategy and Coal Chemical Industry - The Xinjiang region is expected to receive increased support from the central government, with significant investments in coal chemical projects projected to exceed 800 billion by 2025 [16][19] - Key players in this sector include China Chemical Engineering and local construction firms, which are well-positioned to capitalize on the anticipated growth in coal chemical investments [16][19] Strategic Hinterland Development - Sichuan has been identified as a strategic hinterland for national development, with policies expected to support infrastructure and investment growth in the region [21][24] - Companies involved in transportation infrastructure, such as Sichuan Road and Bridge, are likely to benefit from these strategic initiatives [21][24]

Investment Rating - The industry rating is maintained as "Outperform" [5] Core Viewpoints - The construction sector has seen a significant increase of 7.1% this week, outperforming the Shanghai and Shenzhen 300 index by 5.9 percentage points, driven by infrastructure projects and the rise in specialized engineering and civil explosives sectors [1][29] - The report emphasizes the ongoing trend of "anti-involution" in the industry, suggesting investment opportunities in construction blue chips and steel structure sectors, particularly in the central and western regions of China [1][2][36] Summary by Sections Investment Logic - Four angles to capture investment opportunities in the construction sector: 1. **Price Elasticity**: Companies involved in resource development or trade, such as Northern International and China Railway, are recommended due to expected price increases in resources [2][15] 2. **Supply-Demand Optimization**: Focus on construction blue chips as the anti-involution movement may alleviate price pressures in the industry, with recommendations for quality local state-owned enterprises like Sichuan Road and Bridge [2][17] 3. **Transformation and Upgrading**: Companies with stronger technological attributes are expected to benefit from structural high prosperity in technology-driven infrastructure demands, with recommendations for Tunnel Corporation and China State Construction International [2][21] 4. **Downstream Profit Improvement**: If anti-involution policies improve profitability in steel and cement industries, there will be a rebound in capital expenditure needs, recommending companies like China National Materials and China Steel International [2][23] Market Performance - The report notes a slight decline in the operating rates of petroleum asphalt and cement shipment rates, with the cement shipment rate at 43.07%, down by 2.8 percentage points [3][26] - Central state-owned enterprises showed a positive trend in order data for Q2, with notable growth in orders for companies like China Railway and China Nuclear Engineering [3][26] Key Recommendations - The report suggests focusing on high-growth local state-owned enterprises in regions with strong infrastructure investment, such as Sichuan, Zhejiang, and Anhui, as well as major central state-owned enterprises like China Communications Construction and China Railway [36][37] - Emphasis is placed on the potential of nuclear power and emerging business directions within the construction sector, highlighting the high prosperity of nuclear power investments [38]

Core Viewpoint - Ningbo Bank's mid-year report shows a revenue growth rate of 7.9% and a profit growth rate of 8.2%, both improving by over 2% compared to Q1 2025, indicating a stable and positive overall performance [3] Financial Performance - Revenue and profit growth rates have improved quarter-on-quarter, with core Tier 1 capital also showing a quarter-on-quarter improvement [3] - The non-performing loan ratio remains stable, reflecting a solid financial position [3] - The bank has reversed the downward trend in provisions and the phenomenon of profit growth lagging behind revenue growth [3] Fund Performance - As of July 24, 2025, the Ping An SSE Dividend Low Volatility Index A Fund has seen a net inflow of 4.618 billion yuan over three of the last five trading days, averaging a daily net inflow of 924 million yuan [3] - The fund's financing net purchases reached 1.13 billion yuan in the past week, with a latest financing balance of 78.049 billion yuan [3] - The fund's trading congestion level is at 20.98%, lower than 79.02% historically, indicating less trading activity [3] Historical Returns - The Ping An SSE Dividend Low Volatility Index A Fund has a maximum monthly return of 11.16% since inception and an average monthly return of 3.98% [4] - The fund has a one-year Sharpe ratio of 1.15, ranking it in the top half among comparable funds [4] - The maximum drawdown for the fund this year is 5.35%, with a relative benchmark drawdown of 0.44% [4] Fund Management - The fund was established on April 23, 2024, and aims to minimize tracking deviation and error against its benchmark [5] - The current fund managers, Qian Jing and Bai Guiyao, have achieved a return of 14.96% since the fund's inception [5] - The fund's top ten holdings include companies like COSCO Shipping, Chengdu Bank, and Industrial Bank, accounting for a total of 17.41% of the fund [5][7]

Group 1: Q3 Super Long Credit Bond Strategy - The report suggests gradually taking profits on super long credit bonds and switching to shorter-term, more liquid varieties while waiting for the next investment opportunity [6][10][26] - In Q2, the issuance of super long credit bonds increased significantly, with a total of 539.8 billion yuan, marking a 63% increase from the previous quarter [10][12] - The report indicates that the current market conditions do not support further exploration of super long credit bonds due to declining odds of capital gains and limited arbitrage opportunities [26][27] Group 2: Q3 Industry Bond Strategy - The strategy focuses on identifying investment opportunities under the "anti-involution" initiative across various industries [6][10] - In the construction sector, while there is a marginal improvement expected due to funding acceleration and the "anti-involution" initiative, the overall industry remains under pressure [6][10] - The steel industry shows strong expectations for marginal improvement, with opportunities for continued compression of spreads among mid-tier players like Hebei Steel and Shandong Steel [6][10] - The coal sector anticipates a rebound in prices, with a focus on major players like Jin Energy, while cash flow improvements may exceed expectations [6][10] - The real estate sector faces increasing downward pressure, but state-owned enterprises still present attractive absolute returns [6][10] - In the non-ferrous metals sector, the report highlights a divergence in market conditions, with opportunities for compression in spreads among quality private enterprises [6][10] - The cement industry is under significant pressure, with risks of losses and limited opportunities for excess returns [6][10] - The overall strategy recommends focusing on medium-quality entities across industries, particularly in steel, coal, real estate, and construction, while keeping an eye on the "anti-involution" initiative and the commencement of the Yajiang Hydropower Station [6][10]

Core Viewpoint - The A-share market showed mixed performance with the Shanghai Western Development Leading Enterprises Index rising by 0.2% to 6529.57 points, with a trading volume of 62.957 billion yuan [1] Group 1: Index Performance - The Shanghai Western Development Leading Enterprises Index increased by 4.75% over the past month and 3.46% over the past three months, but has decreased by 2.45% year-to-date [1] - The index is composed of leading companies from various secondary industries in selected regions, providing a reference for investors interested in China's regional economic development [1] Group 2: Index Holdings - The top ten weighted companies in the index are: Shaanxi Coal and Chemical Industry (15.2%), Kweichow Moutai (14.42%), Yili Industrial Group (14.27%), Seres (13.44%), TBEA (6.64%), Chengdu Bank (4.23%), Chongqing Rural Commercial Bank (3.33%), Sichuan Changhong (3.06%), Northern Rare Earth (2.83%), and Sichuan Road and Bridge (2.77%) [1] - The index's holdings are entirely composed of companies listed on the Shanghai Stock Exchange [1] Group 3: Industry Composition - The industry composition of the index includes: Consumer Staples (29.48%), Discretionary Consumer (16.92%), Energy (16.30%), Industrials (14.69%), Materials (12.04%), Financials (7.96%), Utilities (1.53%), Healthcare (0.76%), Information Technology (0.15%), Communication Services (0.14%), and Real Estate (0.02%) [2] - The index samples are adjusted biannually, with adjustments occurring on the next trading day after the second Friday of June and December [2]