Group 1: Report Industry Investment Rating - Not mentioned in the provided content Group 2: Core Views of the Report - In H1 2025, the issuance scale of urban investment bonds hit a three - year low, with negative net financing for four consecutive months from March to June. The credit risk of urban investment bonds slightly converged, and credit ratings were mainly upgraded. It is expected that the issuance scale from July to December will be about 2.4 trillion yuan, and the net outflow may exceed 100 billion yuan [2][12]. - The current urban investment financing policy is strict, and it is necessary to optimize the policy to support new investment space. Although the "package debt resolution" has achieved results, urban investment enterprises still face heavy debt pressure. The "14th Five - Year Plan" period will bring new opportunities and challenges to the urban investment industry, but enterprises face problems such as weak asset liquidity. The "platform exit" of urban investment may lead to new problems, and it is necessary to guide and regulate the transformation [7][8][9]. - The credit spread of urban investment bonds still has room for compression. It is recommended to allocate high - quality enterprise targets in strong regions and pay attention to new issuers of bonds during the transformation [11]. Group 3: Summary by Relevant Catalogs I. Five Characteristics of the Urban Investment Bond Market Operation in H1 2025 - **Issuance scale at a three - year low, negative net financing at home and abroad**: The issuance scale was 2.77 trillion yuan, a year - on - year decrease of 12.15%. The net financing was - 120.004 billion yuan, with four consecutive months of net outflows from March to June. The overseas issuance scale decreased by 12.29% year - on - year, and the net outflow was 34.484 billion yuan. Only provincial and AAA - rated urban investment entities had positive net financing [2][17][18]. - **Overall decline in issuance interest rates, small decline for weak - quality bonds**: The weighted average issuance interest rate was 2.40%, a year - on - year decrease of 0.41 percentage points. The decline of weak - quality and low - level entities was less than that of stronger ones, and the AA - level entities' interest rates increased [30]. - **Long - term issuance trend, high proportion of debt replacement**: The weighted average term was 3.89 years, a year - on - year increase of 0.24 years. The proportion of private placement bonds rose to the first place. The broad and narrow debt replacement ratios reached 97.57% and 94.13% respectively [37]. - **Decline in trading volume, compression of trading spreads**: The trading volume decreased by 14.86% year - on - year, and the trading spreads compressed compared with the end of 2024 [42]. - **Deeper net outflows in non - key regions**: 13 provinces had a 100% debt replacement ratio, with 10 being key provinces. Jilin and Chongqing issued project - construction urban investment bonds. Key provinces had a total net outflow of 36.308 billion yuan, and non - key provinces had a total net outflow of 83.696 billion yuan [45]. II. Slight Convergence of Urban Investment Credit Risks, Upward - Adjusted Credit Ratings - **Convergence of non - standard default risks, decline in commercial bill overdue times**: There were 3 non - standard default events in H1, all trust product over - dues in Henan, Shandong, and Shaanxi. By May, 52 urban investment enterprises were on the commercial bill overdue list, with 100 times on the list, a year - on - year decrease of 10 enterprises and 17 times [56]. - **Upward - adjusted credit ratings, mainly in Shanghai, Hunan, and Guangdong**: 25 urban investment platforms had 44 rating adjustments. 14 entities had upward - adjusted main body ratings, and 2 had downward - adjusted ones. 27 bond items were upgraded, and 2 were downgraded [58]. - **Significant decline in abnormal trading volume and scale, frequent in Shandong and Guizhou**: 157 urban investment entities had 576 abnormal trades, with a scale of 23.332 billion yuan, a year - on - year decrease of 76.34%. Shandong and Guizhou had relatively large abnormal trading scales [60]. III. High Maturity and Put - Option Pressures, Difficult to Reverse the Net Outflow Trend, Expected Issuance Scale of about 2.4 Trillion from July to December - **Maturity and put - option scale of about 2.58 trillion from July to December**: By the end of June, the maturity scale was about 1.85 trillion yuan, and the put - option scale was 72.7022 billion yuan (assuming a 70% put - option ratio). Heilongjiang, Gansu, and Yunnan had relatively high maturity pressures [64]. - **Slight decline in the proportion of early redemption, more than half of bonds in Liaoning were redeemed early**: In H1, 700 bonds were redeemed early, with a total scale of 126.284 billion yuan, a year - on - year decrease of 11%. The proportion of early redemption to the total maturity scale was 4.36%, a slight year - on - year decrease. Liaoning had a high early - redemption proportion of 54.39% [68]. - **Expected issuance scale of about 2.4 trillion from July to December, net outflow may exceed 100 billion**: It is expected that there may still be months with negative net financing from July to December, with a total net outflow of about 100 - 150 billion yuan. The issuance scale is expected to be between 2.34 trillion and 2.50 trillion yuan. The debt replacement ratio will remain high, and the financing entity level may continue to move up [5][70][72]. IV. Follow - up Concerns and Investment Strategies (1) Follow - up Concerns - **Optimize financing policies**: The current policies are too strict. It is necessary to optimize policies from the perspective of ensuring financing cycles and economic development, such as refining "list - based management" and relaxing "government letter" requirements [7]. - **Accelerate debt replacement and relieve pressure**: Although the "package debt resolution" has achieved results, urban investment enterprises still face heavy debt pressure. It is recommended to accelerate debt replacement and include some operating debts and government arrears in the replacement scope [8]. - **Seize development opportunities during the "14th Five - Year Plan" period**: Urban investment enterprises face problems such as weak asset liquidity. They need to seize opportunities during the "14th Five - Year Plan" period, integrate resources, and control investment impulses [9]. - **Guide and standardize urban investment transformation**: The "platform exit" of urban investment may lead to new problems. Local governments need to guide the transformation direction and strengthen policy connection [10]. (2) Investment Strategies - The macro - environment is favorable for the bond market. The yield center may decline in H2 2025. The credit spread of urban investment bonds has room for compression. It is recommended to allocate high - quality targets in strong regions and pay attention to new issuers during the transformation [11][80].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The "15th Five - Year Plan" period will be a new turning point for the urban investment industry. Urban investment enterprises need to seize development opportunities, use relevant policies, and address long - standing issues such as low profitability, poor asset quality, high debt pressure, and heavy reliance on local government resources [3][4]. - In 2024, under the "package debt resolution" policy, urban investment enterprises showed some positive changes, but the substantial improvement of the overall fundamentals still needs further observation. Key provinces achieved certain debt - resolution results, but their profitability, investment, and financing capabilities were weaker than other regions, and the debt - repayment pressure was prominent [2][15]. - Urban investment enterprises in the process of transformation need to pay attention to issues such as insufficient profitability in the initial stage, low asset quality, and high debt pressure, and promote the smooth transition between old and new businesses [5][6]. 3. Summary by Relevant Catalogs Asset Side - The expansion speed of urban investment enterprises was lower than the growth rate of social financing, and assets were concentrated towards the top. The asset growth rate of urban investment enterprises in key provinces slowed down significantly. By the end of 2024, the total asset scale of urban investment enterprises reached 162.70 trillion yuan, with a year - on - year growth of 5.31%, lower than the social financing growth rate of 8% in 2024 [8][17]. - The liquidity of urban investment assets weakened. The scale of monetary funds decreased significantly, and the scale and proportion of accounts receivable increased. By the end of 2024, the total scale of monetary funds of urban investment enterprises was 7.59 trillion yuan, a year - on - year decrease of 8.65% [24]. - Due to investment constraints, infrastructure business was restricted, and the growth rate of inventory slowed down. The scale of construction - in - progress projects of urban investment enterprises in key provinces decreased. In 2024, the inventory growth rate of urban investment enterprises was only 3.24%, a significant decrease of 5.46 percentage points [30][33]. Liability Side - The growth rate of debt scale slowed down. The asset - liability ratio and the scale of interest - bearing debt of urban investment enterprises in key provinces decreased for the first time. By the end of 2024, the total liability scale of urban investment enterprises reached 101.13 trillion yuan, with a year - on - year growth of 6.33%, and the growth rate decreased by 5.19 percentage points compared with 2023 [38][40]. - The financing cost of urban investment enterprises increased slightly but was still in a downward channel. The cost in key provinces decreased more significantly but was still relatively high. In 2024, the median financing cost of urban investment enterprises was 5.16%, a slight increase of 9BP compared with 2023 [46]. - The scale and proportion of non - standard financing of urban investment enterprises "double - dropped", and the debt structure of urban investment enterprises in key provinces improved significantly. In 2024, the proportion of non - standard financing of urban investment enterprises dropped to 8.57%, a decrease of 1.19 percentage points [49]. Cash Flow - The net cash flow from operating activities turned positive for the first time in five years, and nearly 80% of urban investment enterprises in key provinces had positive cash flow net. In 2024, the net cash flow from operating activities of urban investment enterprises was 0.81 trillion yuan, turning positive for the first time in five years [12][53]. - The cash outflow from investment activities slowed down. Urban investment in key provinces was more restricted, but long - term equity investment improved. In 2024, the cash outflow from investment activities of urban investment enterprises was 8.72 trillion yuan, a year - on - year decrease of 4.49% [12][56]. - The cash inflow from financing activities was under pressure, and the net amount decreased. Urban investment financing in key provinces was more restricted. In 2024, the cash inflow from financing activities of urban investment enterprises was 29.98 trillion yuan, with a year - on - year growth of 5.27%, and the growth rate decreased significantly by 6.53 percentage points [13][61]. Debt - Repayment Ability - The debt - repayment ability of urban investment enterprises continued to decline, and urban investment enterprises in key provinces faced greater debt - repayment pressure. In 2024, the current ratio, the coverage ratio of monetary funds to short - term debt, and the EBITDA interest coverage ratio of all urban investment enterprises were 2.41, 0.30, and 2.72 respectively [65]. - The debt - repayment ability of entities facing the maturity or put - back of urban investment bonds in 2025 tended to weaken. From May to December 2025, the entities facing the maturity or put - back of urban investment bonds were mainly AAA - rated and municipal - level. The maturity pressure in key provinces such as Heilongjiang and Gansu was relatively large [69].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2025, the infrastructure investment and financing (hereinafter referred to as "base investment") industry policies continue the overall idea of "controlling new debts and resolving existing debts" of the "package debt - resolution" policy in 2024, and pay more attention to the balance between debt resolution and development [3][5]. - The "package debt - resolution" policy has achieved phased results, with many regions achieving zero implicit debts. The industry adheres to resolving debts while developing and vice versa, strengthens special - bond support, and guides the standardized development of government investment funds to assist the transformation of base - investment enterprises [5][7][8]. - Under the influence of policies, the short - term debt - repayment pressure of base - investment enterprises has been relieved, the financing channels are continuously adjusted, the marginal liquidity is improved, and the bond financing cost is reduced. However, the non - standard debt situation in some provinces still needs attention [14]. - In 2025, the base - investment industry policies are expected to continue the main tone of "controlling new debts and resolving existing debts", and the industry's debt risk is generally controllable. New investment space may be opened, but issues such as the tightening of financing channels, non - standard debt replacement progress, and changes in the government - enterprise relationship after enterprise transformation need to be concerned [23][25]. 3. Summary by Relevant Catalogs 3.1 Policy Review - **Policy Continuity and New Requirements**: In 2025, the base - investment industry policies continue the "controlling new debts and resolving existing debts" idea of 2024, and the 2025 national government work report puts forward new requirements such as dynamically adjusting the list of high - risk debt regions and opening up new investment space [3][5]. - **Phased Results of Debt Resolution**: In the first quarter of 2025, many regions announced that they had achieved zero implicit debts in 2024, involving 10 provinces and 23 cities. For example, Xuzhou in Jiangsu Province used 11.881 billion yuan of special bonds to replace implicit debts and completed the task of zero implicit debts [5]. - **Debt Resolution in Development**: The 2025 national government work report proposes to dynamically adjust the list of high - risk debt regions. Some regions may be planning to withdraw from the list of key provinces. The central bank also guides the resolution of financial debt risks of financing platforms and supports their market - oriented transformation [7]. - **Support for Enterprise Transformation**: Special bonds are strengthened to support infrastructure construction, rural revitalization, and consumption - related fields. The State Council General Office issues a guiding opinion on promoting the high - quality development of government investment funds, and the Shanghai Stock Exchange revises relevant rules to guide the transformation of base - investment enterprises [8][9][11]. 3.2 Policy Main Impacts - **Relieved Short - term Debt - Repayment Pressure**: Since November 2024, the government has increased the local government debt limit to replace existing implicit debts. In the first quarter of 2025, 1.34 trillion yuan of special bonds were issued for this purpose, exceeding half of the annual quota, and the short - term debt - repayment pressure of base - investment enterprises has been relieved [14][15]. - **Adjusted Financing Channels**: In the first quarter of 2025, the issuance scale and net financing of base - investment bonds decreased compared with the same period last year. The non - standard debt scale decreased, and the proportion of bank loans in the debt of base - investment enterprises may increase [16]. - **Improved Liquidity and Reduced Financing Cost**: The liquidity of base - investment enterprises has been continuously improved, and the weighted average issuance interest rate of base - investment bonds in the first quarter of 2025 decreased by 11BP compared with the fourth quarter of 2024. The financing cost of base - investment enterprises in key provinces has decreased significantly [17]. - **Converged Non - standard and Bill Public Opinions**: The negative public opinions of base - investment non - standard risks have converged. In the first quarter of 2025, the total number of non - standard risk events decreased by about 41% compared with the fourth quarter of 2024 and about 51% compared with the first quarter of 2024. However, the non - standard risk situation in some regions still needs attention [18]. - **Released Liquidity by Special Bonds**: Special bonds support project investment and land asset recovery. In the first quarter of 2025, the new quota of government special bonds for infrastructure construction increased significantly, and some special bonds were used for land reserve projects, which helped base - investment enterprises dispose of idle and inefficient land assets and release liquidity [19][20]. - **Enterprise Transformation and High - quality Development**: Policy guidance promotes the transformation and high - quality development of base - investment enterprises. The proportion of market - oriented entities among bond - issuing enterprises has increased, and the transformation is expected to accelerate [21][22]. 3.3 Industry Development Expectations - **Controllable Debt Risk**: In 2025, the base - investment industry policies will continue the main tone of "controlling new debts and resolving existing debts". The debt risk of the industry is generally controllable, but the implementation of financial debt - resolution policies and the adjustment of financing channels need to be concerned [23][25]. - **New Investment Space and Enterprise Transformation**: The current debt - resolution work emphasizes the balance between debt resolution and development. New investment space may be opened, and base - investment enterprises are expected to focus on key investment fields and industrial investment. The process of enterprises withdrawing from the platform and industrial transformation is expected to accelerate [25]. - **Challenges and Concerns**: The fundamental improvement of base - investment enterprises is still under pressure, and the progress of non - standard debt replacement is uncertain, which may affect the public opinion trend. The changes in the government - enterprise relationship after enterprise transformation also need continuous attention [25][33][34].