Investment Rating - Industry rating is "Outperform the Market" (maintained rating) [5] Core Viewpoints - Increased focus on cyclical infrastructure and international engineering sectors, with significant improvement in funding sources such as special bonds. The physical volume of infrastructure is expected to accelerate, particularly post the Two Sessions, which may drive market performance in these sectors [1][14] - The construction industry is showing signs of recovery, with a construction PMI of 52.7%, indicating expansion. The physical workload in infrastructure is improving, supported by favorable weather and project commencement [14][20] - The report suggests focusing on central state-owned enterprises in infrastructure and cyclical engineering products, as well as international engineering opportunities due to geopolitical developments [1][14] Summary by Sections Section 1: Current Market Conditions - As of February 27, 2025, the funding availability rate for 13,532 construction sites is 49.1%, showing a year-on-year increase. The construction PMI has risen by 3.4 percentage points from the previous month [2][14] - The issuance of new special bonds has reached 589.11 billion yuan, an increase of over 180 billion yuan compared to the same period last year, with infrastructure being the primary focus [2][13] Section 2: Market Performance - The construction index rose by 1.25% during the week of February 24-28, while the Shanghai and Shenzhen 300 index fell by 1.89%. Notable stock performances included HanJia Design (+32.74%) and Chengbang Co. (+22.71%) [3][17] Section 3: Investment Recommendations - Three main investment themes are highlighted: 1. Focus on infrastructure, debt reduction, and value enhancement opportunities [20] 2. Attention to cyclical engineering sectors with potential high elasticity [21] 3. Investment opportunities in low-altitude economy, Belt and Road Initiative, and construction transformation [24][25]

Financial Data and Key Indicators Changes - The Shanghai Composite Index closed at 2,862.19, down 0.27% on the day and down 3.79% year-to-date [4][5] - The Shenzhen Component Index closed at 8,393.70, down 0.62% on the day and down 11.87% year-to-date [4][5] - The Northbound funds recorded a net sell of 77.65 billion, with a cumulative net sell of 17.43 billion year-to-date [6] Business Line Data and Key Indicators Changes - The mechanical sector benefits from cyclical recovery, while the power equipment sector benefits from electricity reforms [13] - The pharmaceutical sector is supported by policy catalysts and overseas interest [13] Market Data and Key Indicators Changes - The Hang Seng Index increased by 1.17% to close at 17,090.23, with a year-to-date increase of 0.25% [4][5] - The total trading volume in the Shanghai and Shenzhen markets was 563.1 billion [4] Company Strategy and Development Direction and Industry Competition - The company focuses on traditional business stability while expanding into hydrogen and flexible power generation, aiming for growth in these areas [23] - The strategy includes leveraging high dividend yields and exploring new business opportunities to counteract declining ARPU values [17] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic factors are primarily responsible for revenue growth slowdown, with market competition also playing a role [17] - The outlook remains cautious due to potential risks in capital expenditure and the pace of 5G commercialization [17] Other Important Information - The CPI increased by 0.5% year-on-year in July, driven by both food and non-food items, indicating inflationary pressures [19] - The company anticipates continued focus on high dividend-paying stocks and sectors with strong earnings growth potential [21] Q&A Session All Questions and Answers Question: What are the key risks facing the telecommunications sector? - The main risks include capital expenditures falling short of expectations, slower-than-expected progress in the 5G industry chain, and challenges in AI application deployment [17] Question: How does the company plan to address declining ARPU values? - The company aims to stimulate new demand through successful transformation and new business initiatives [17] Question: What is the outlook for the hydrogen energy sector? - The company is optimistic about the growth potential in the hydrogen sector, supported by its early investments and technological advancements [23]