Group 1 - The Ministry of Finance plans to issue 30-year fixed-rate special government bonds with a total competitive bidding amount of 83 billion yuan on August 22, completing the issuance plan for August [1] - The total issuance scale of special government bonds in August will reach 235 billion yuan, making it the second highest monthly issuance this year, following May's 242 billion yuan [1] - The overall issuance plan for special government bonds this year is 1.3 trillion yuan, an increase of 300 billion yuan from last year, with 996 billion yuan already issued, achieving a progress rate of 76.6% [1] Group 2 - Of the 1.3 trillion yuan special government bonds to be issued this year, 800 billion yuan will support "two major" projects, and 500 billion yuan will be allocated for "two new" policies [2] - As of August 13, 188 billion yuan in investment subsidy funds for equipment updates has been allocated, supporting approximately 8,400 projects across various sectors, driving total investment exceeding 1 trillion yuan [2] - The issuance and utilization of special government bonds are seen as having multiple positive implications for stabilizing growth, adjusting structure, and benefiting people's livelihoods [2] Group 3 - From January to July, infrastructure investment grew by 3.2% year-on-year, contributing 43% to overall investment growth, which is 1.6 percentage points higher than the total investment growth rate [3] - Special government bonds play a crucial role in accelerating project progress and promoting industrial upgrades, providing solid financial support for infrastructure investment [3] - The injection of funds from special government bonds can leverage social capital, attracting more investment into the infrastructure sector and further promoting economic growth and employment [3]

Core Viewpoint - Daiwa's report indicates that Changjiang Infrastructure Group's net profit attributable to shareholders for the first half of the year is HKD 4.348 billion, representing a year-on-year growth of 1% [1] - The company has confirmed the completion of the sale of its UK Rails assets, with performance and merger progress aligning with expectations [1] Financial Performance - The interim dividend per share is HKD 0.73, an increase of HKD 0.01 year-on-year [1] - The forecast for the second half indicates a slight slowdown in profit growth from the UK business [1] Strategic Moves - The company is not expected to declare a special dividend from the sale of the UK Rails assets [1] - There are rumors regarding the company's withdrawal from bidding for the UK National Grid's LNG project, which will be closely monitored [1] Analyst Rating - The target price has been raised from HKD 59 to HKD 63.5, with a reiterated "Buy" rating [1]

Investment Rating - The industry investment rating is "Overweight" indicating a positive outlook for the sector compared to the overall market performance [1]. Core Insights - The report highlights a weak overall investment environment, with infrastructure investment under pressure. However, regional investments may gain flexibility as national strategic layouts deepen [2][3]. - Key statistics show that from January to July 2025, national fixed asset investment increased by 1.6% year-on-year, while manufacturing investment rose by 6.2%. In contrast, real estate investment decreased by 12.0% [10][12]. - Infrastructure investment (including all categories) grew by 7.3% year-on-year, although this represents a slowdown compared to previous months [10][12]. Summary by Sections 1. Market Performance - The construction industry experienced a weekly decline of 0.51%, underperforming against major indices such as the Shanghai Composite Index (+1.70%) and the Shenzhen Component Index (+4.55%) [3][5]. - The best-performing sub-industries included international engineering (+4.36%), private infrastructure (+1.83%), and professional engineering (+0.81%) [5][8]. 2. Key Company Developments - China Power Construction signed a contract for the South Africa Mokolo-Crocodile River (West) water supply expansion project, valued at approximately 6.994 billion yuan, representing 1.10% of its 2024 revenue [13]. - China Metallurgical Group reported new contracts worth 611.34 billion yuan from January to July 2025, a decrease of 18.5% year-on-year, while overseas contracts increased by 38.0% [13][14]. 3. Investment Analysis - The report recommends low-valuation state-owned enterprises such as China Chemical, China Railway, and China Railway Construction, while also highlighting private companies like Zhi Te New Materials and Honglu Steel Structure as potential investment opportunities [2][12]. - The report emphasizes the importance of monitoring new contract signings by key companies to gauge future performance [14].

Investment Rating - Industry Rating: Outperform the market (maintained rating) [5] Core Viewpoints - The construction sector is expected to benefit from rising resource prices, particularly in the "construction + mining" sector, with a focus on the revaluation of mineral resources [2][13] - Recent inflation data in the US is favorable for the Federal Reserve's interest rate cuts, which has elevated the valuation of the non-ferrous metals sector, indicating a potentially strong copper price trend [2][13] - The construction companies with rich mineral resources, such as China Metallurgical Group and China Railway Group, are highlighted for their growth potential in the mining sector [2][13] Summary by Sections Resource Price Expectations - There is an ongoing expectation of rising prices for resource commodities, which is likely to enhance the performance of construction companies involved in resource business [2][13] - The report emphasizes the importance of companies like Northern International and Shanghai Construction in the coal and gold sectors, respectively, as they are positioned to benefit from price elasticity and profit improvements [2][13] Market Performance Review - The construction index fell by 0.44% during the week, underperforming the CSI 300 index, which rose by 1.69%, resulting in a 2.12 percentage point lag [4][22] - Notable stock performances included Meichen Technology (+27%), Hongrun Construction (+23%), and Sentai Co. (+23%) [4][22] Investment Recommendations - The report suggests focusing on the recovery of infrastructure investments and the "anti-involution" investment theme, particularly in regions with high demand such as Sichuan, Zhejiang, Anhui, and Jiangsu [28][29] - Key recommendations include companies like Sichuan Road and Bridge, Zhejiang Communications, and major state-owned enterprises like China Communications Construction and China Railway Group, which are expected to benefit from strategic projects in the western regions [28][29] - The report also highlights the importance of nuclear power investments and emerging business directions in the construction sector, recommending companies like Libat and China Nuclear Engineering [30][31]

Investment Rating - Industry rating is maintained at "Outperform the Market" [5] Core Viewpoints - Infrastructure investment in July showed a high increase in railway and water electricity fuel investment, while overall infrastructure investment is experiencing marginal slowdown, particularly in the central and western regions [1][2] - Real estate development investment from January to July decreased by 12%, with a significant drop of 17.1% in July alone, indicating a continued weakness in the real estate sector [2] - The issuance of special bonds has accelerated, with a total of 27,775.89 billion yuan issued from January to July, representing a year-on-year increase of 56.5%, which is expected to support infrastructure investment growth in the second half of the year [1] - Cement demand is anticipated to gradually recover, with a focus on investment opportunities at relatively low points in the market, despite a 4.5% year-on-year decline in cement production from January to July [3] - The flat glass market is showing signs of improvement, with a slight increase in prices and a reduction in inventory levels, suggesting a potential recovery in demand [4] Summary by Sections Infrastructure Investment - In July, infrastructure investment growth was supported by a 21.5% year-on-year increase in water electricity fuel investment, while transportation and storage investment saw a 3.9% increase [2] - The report emphasizes the importance of focusing on major engineering projects and infrastructure investments in the central and western regions [1] Real Estate Sector - The real estate sector continues to show weakness, with significant declines in sales, new construction, and completion areas from January to July [2] - The report highlights the need for monitoring policy changes that could impact the real estate market [4] Cement and Glass Markets - Cement production decreased by 4.5% year-on-year, with a notable drop in July, but there are expectations for demand recovery as the market enters a peak season [3] - The flat glass market is experiencing a slight recovery, with improved trading conditions and reduced inventory levels [4]

Investment Rating - The industry investment rating is "Overweight" [2][25]. Core Viewpoints - Fixed asset investment continued to weaken in the first seven months of 2025, with a cumulative year-on-year increase of 1.6%, a decrease of 1.2 percentage points compared to the first half of the year. Manufacturing investment year-on-year increased by 6.2%, down 1.3 percentage points from the previous period [4][12]. - Infrastructure investment is under pressure, with transportation, water conservancy, and public utility investments showing declining growth rates. Total infrastructure investment (including all sectors) increased by 7.3% year-on-year, down 1.6 percentage points from the first half of the year. Infrastructure investment (excluding electricity) increased by 3.2%, down 1.4 percentage points [5][6]. - Real estate investment remained low, with a year-on-year decrease of 12.0% in the first seven months of 2025, a decline of 0.8 percentage points compared to the previous period. The number of new starts decreased by 18.3% year-on-year, while completions worsened with a decrease of 16.5% [12][18]. Summary by Sections Fixed Asset Investment - In the first seven months of 2025, fixed asset investment showed a cumulative year-on-year increase of 1.6%, with manufacturing investment increasing by 6.2%, indicating a synchronized decline in growth rates [4][6]. Infrastructure Investment - Infrastructure investment faced pressure, with transportation, water conservancy, and public utility sectors experiencing declining growth rates. The year-on-year increase for total infrastructure investment was 7.3%, while investment excluding electricity was 3.2% [5][6]. Real Estate Investment - Real estate investment remained at a low level, with a year-on-year decrease of 12.0% in the first seven months of 2025. The decline in new starts was 18.3%, and completions decreased by 16.5% [12][18]. Investment Analysis Recommendations - The current industry total is weak, but regional investments may gain elasticity as national strategic layouts deepen. Recommended low-valuation state-owned enterprises include China Chemical, China Energy Construction, China Railway, and China Railway Construction. Attention is also drawn to China Power Construction, China Communications Construction, and China Metallurgical Group [18].

Group 1 - The core viewpoint is that the Chinese construction machinery industry is experiencing significant growth, with excavator sales reaching 17,138 units in July 2025, a year-on-year increase of 25.2% [1] - Domestic sales accounted for 7,306 units, reflecting a growth of 17.2%, while exports reached 9,832 units, marking a substantial increase of 31.9% [1] - The government plans to issue 1.3 trillion yuan in ultra-long special bonds, an increase of 300 billion yuan from the previous year, to support infrastructure investment and stimulate demand for construction machinery [1] Group 2 - Zhejiang Securities suggests that the Chinese construction machinery industry is transitioning from import substitution to global supply, recommending a focus on industry leaders [2] - Everbright Securities highlights strong performance in both domestic and export sales in July, indicating a positive outlook for the industry driven by ongoing demand and policy support [2] - The report emphasizes that the internationalization and electrification of the construction machinery sector will likely benefit leading companies, with projects like the Yajiang and Xinjiang railways expected to further boost demand [2] Group 3 - Relevant companies in the Hong Kong stock market include Zoomlion Heavy Industry (000157), SANY International (00631), China Longgong (03339), and Zhengzhou Coal Mining Machinery (00564) [3]

Investment Rating - The investment rating for the construction and decoration industry is "Outperform the Market" (maintained) [1] Core Viewpoints - The establishment of the Xinjiang-Tibet Railway Company with a registered capital of 95 billion RMB indicates a significant investment in railway construction, particularly in the Xinjiang and Tibet regions, which are highlighted as key areas for future railway development [2][3] - The total investment for the Xinjiang-Tibet Railway is estimated to be between 300 billion to 400 billion RMB, with a construction period of 7-8 years. The project is expected to face challenges due to permafrost sections and ecological protection requirements [3][15][27] - If the Xinjiang-Tibet Railway commences construction, it will significantly boost the demand for cement (approximately 21 million tons), steel (266,000 tons of rails and 62,000 tons of structural steel), and engineering equipment (annual demand valued at approximately 12.7 billion RMB) [3][29][32] Summary by Sections Industry Overview - The Xinjiang and Tibet regions are identified as future focal points for railway construction, with rapid growth in fixed asset investment expected in the coming years [3][6] - The railway construction investment has seen a resurgence, with a projected increase of 20.5% and 18.5% in 2023 and 2024, respectively [6][7] Investment Opportunities - The report suggests focusing on certain companies that are likely to benefit from the Xinjiang-Tibet Railway project, including China Railway Group and China Railway Construction Corporation, which are expected to be key players in the engineering contracting sector [4][38] - The report also highlights the potential for companies involved in the supply of construction materials, such as cement and steel, as well as those providing specialized equipment for tunnel construction [37] Financial Projections - Key companies in the industry, such as China Railway Group and China Railway Construction, are rated as "Outperform the Market" with projected earnings per share (EPS) growth for 2025 and 2026 [5][37] - The report provides detailed financial metrics for these companies, indicating strong market positions and growth potential in the context of increased infrastructure spending [5][37]

Group 1 - The infrastructure ETF (159619) rose over 1.6% on August 8, indicating positive market sentiment towards infrastructure investments [1] - Looking ahead to the second half of the year, the gradual implementation of special bonds and policies from the Central Urban Work Conference is expected to enhance fiscal policy support and improve financing conditions, leading to a noticeable impact on investment and physical volume [1] - There is an expectation for increased domestic demand, with infrastructure investment and key regional construction likely to receive policy boosts, suggesting that overall infrastructure investment is poised for steady growth throughout the year [1] Group 2 - The infrastructure ETF (159619) tracks the CSI Infrastructure Index, which is compiled by the China Securities Index Company and selects listed companies in the infrastructure construction sector from the A-share market [1] - The index constituents include representative enterprises from construction, building materials, and engineering machinery sectors, reflecting the overall performance of listed companies in the infrastructure industry [1] - Investors without stock accounts can consider the Guotai CSI Infrastructure ETF Initiated Linkage C (016837) and Guotai CSI Infrastructure ETF Initiated Linkage A (016836) for investment opportunities [1]

Core Viewpoint - The Ministry of Finance has allocated a new government debt limit of 182.4 billion yuan for Fujian Province in 2024, signaling the issuance of the second batch of new debt limits, with local governments planning to issue over 2 trillion yuan in local bonds in the third quarter, indicating a peak in local bond issuance and strong support for infrastructure investment growth [1][2]. Group 1: Local Debt Issuance - Fujian Province's new government debt limit of 182.4 billion yuan represents a 3.7% increase from the previous year, indicating the second batch of new government bond quotas has been issued [2]. - A total of 27 provinces, autonomous regions, and municipalities plan to issue local bonds amounting to 2.36 trillion yuan in the third quarter, with ten regions including Sichuan, Guangdong, and Hunan planning to issue over 100 billion yuan each [2]. - As of June 25, local governments have issued a total of 3.3 trillion yuan in local bonds this year, with 1.35 trillion yuan being new special bonds [2]. Group 2: Project Support and Efficiency - Local governments are prioritizing the issuance of bonds for high-maturity projects to ensure quick formation of physical work volume, with Fujian's new debt limit including 14 billion yuan for general debt and 168.4 billion yuan for special debt [4]. - The focus is on supporting public welfare projects that can achieve financing and revenue balance, particularly ongoing and mature projects [4]. - The process from special bond issuance to the formation of physical work volume involves several stages, and delays in any stage can impact timely project execution [4]. Group 3: Infrastructure Investment - Local bonds are expected to significantly support major project construction, with Qingdao issuing 32.02 billion yuan in new special bonds for various key projects [6][7]. - The increase in government bond financing since May is anticipated to accelerate infrastructure investment growth, with the National Development and Reform Commission pushing for all new national bond projects to commence by the end of June [7]. - Overall, infrastructure investment is projected to play a stabilizing role in the macroeconomic landscape this year [7].