Core Viewpoint - The commencement of the "Yaxia" hydropower station construction, with a total investment of 1.2 trillion, is expected to boost infrastructure investment growth and enhance economic stability expectations [1]. Market Performance - The stock market continued to rebound, with the Shanghai Composite Index showing a five-week upward trend and reaching a recent high during the week [1]. - Daily trading volume in both markets exceeded 1.8 trillion, indicating a significant increase compared to the previous week [1]. - The Shenzhen Component Index accelerated its gains, achieving a new high for the year [1]. Sector Focus - Market hotspots were primarily concentrated in construction and building materials sectors related to infrastructure [1]. - Investment styles favored small-cap and technology sectors, which experienced larger gains [1]. Technical Analysis - The Shanghai Composite Index has accelerated its upward movement after breaking through a consolidation range from the previous year [1]. - The main technical resistance level is at the high point from early October of last year, which also represents the top of a weekly large box range [1].

Core Viewpoint - The article highlights China's significant investment in infrastructure, particularly the completion of a 750 kV ultra-high voltage power line in the Taklamakan Desert, showcasing the country's long-term vision and strategic planning in energy and resource management [1][3][11]. Group 1: Infrastructure Development - The 750 kV ultra-high voltage power line spans nearly 4,200 kilometers, encircling the Taklamakan Desert, and represents a monumental engineering achievement in a challenging environment [3][5]. - The construction involved laying 480,000 square meters of grass grids to protect the power network from shifting sands, demonstrating a meticulous approach to infrastructure development [5][7]. Group 2: Economic Impact - The project is expected to generate significant economic benefits, with one small county projected to increase its tax revenue by 200-300 million yuan annually from selling electricity, effectively acting as a "money printing machine" for the local economy [5][7]. - The availability of stable and affordable electricity in southern Xinjiang, where industrial electricity costs only 0.45 yuan per kilowatt-hour, is anticipated to save companies over 100 million yuan in production costs each year [5][7]. Group 3: Resource Potential - The Taklamakan Desert, often referred to as a "sea of death," is rich in resources, including over 5,600 billion cubic meters of shale gas, 136 million tons of crude oil, and various minerals, which can now be accessed due to the new power infrastructure [7][9]. - The investment is projected to attract over 28.3 billion yuan in industrial investment and create more than 8,000 jobs, indicating a substantial economic transformation in the region [7][9]. Group 4: Strategic Positioning - Xinjiang's geographical location at the center of the Eurasian continent and its role as a key point in the China-Europe Railway Express and the China-Pakistan Economic Corridor enhance its strategic importance for trade and logistics [9][11]. - The ±1100 kV ultra-high voltage transmission project enables electricity to be delivered from Xinjiang to Anhui in just 0.01 seconds, further integrating the region into national and global energy networks [9][11].

Core Insights - The overall fiscal performance in China for the first half of 2025 shows a slight decline in public budget revenue and an increase in expenditure, indicating a stable fiscal environment despite economic pressures [1][2]. Revenue Summary - Total public budget revenue reached 115,566 billion yuan, a year-on-year decrease of 0.3% [2]. - Tax revenue amounted to 92,915 billion yuan, down 1.2% year-on-year, while non-tax revenue increased by 3.7% to 22,651 billion yuan [2]. - Central government revenue was 48,589 billion yuan, a decline of 2.8%, while local government revenue rose by 1.6% to 66,977 billion yuan [2]. - Monthly tax revenue has shown a recovery since April, with growth rates of 1.9% in April, 0.6% in May, and 1% in June [2]. Expenditure Summary - Total public budget expenditure was 141,271 billion yuan, reflecting a year-on-year increase of 3.4% [4]. - Central government expenditure grew by 9% to 19,914 billion yuan, while local government expenditure increased by 2.6% to 121,357 billion yuan [4]. - Key areas of expenditure included social security and employment (up 9.2%), education (up 5.9%), and science and technology (up 9.1%), while spending on urban and rural communities, agriculture, and transportation saw declines [4]. Future Outlook - Analysts expect favorable conditions for fiscal revenue in the second half of the year, driven by policies aimed at economic recovery and infrastructure investment [3]. - The introduction of new policy financial tools is anticipated to accelerate infrastructure recovery, benefiting sectors with significant accounts receivable [3]. - The government has substantial room for borrowing, with manageable debt levels and a large deficit space compared to international standards [3]. Key Areas of Focus - The government issued 26,000 billion yuan in new local government bonds to support major projects in the first half of the year [4]. - The upcoming "15th Five-Year Plan" will focus on tax system reforms, which may include adjustments to consumption tax collection and local government incentives to improve the consumption environment [5].

Investment Rating - The report maintains a "Positive" investment rating for the construction and engineering industry [11] Core Insights - The report highlights a slowdown in fixed asset investment growth, with a marginal improvement in the PMI for the construction sector, indicating a potential recovery in business activity expectations [6][19] - The report notes a significant decline in narrow infrastructure investment in June, with a year-on-year increase of 2.0% but a month-on-month decrease of 3.1 percentage points [7][26] - The report emphasizes the steady funding for infrastructure projects, with a notable increase in special bond issuance aimed at debt replacement [9][60] Summary by Sections Investment & Orders - Fixed asset investment growth continues to slow, with June's manufacturing PMI showing a slight improvement, while the construction PMI increased to 52.8%, up 0.5 percentage points year-on-year and 1.8 percentage points month-on-month [6][19] - In June, narrow infrastructure investment reached CNY 2.5 trillion, a year-on-year increase of 2.0%, while broad infrastructure investment was CNY 3.4 trillion, up 5.8% year-on-year [7][26] - The report indicates that overseas orders for construction companies remain robust, with a 17.34% year-on-year increase for China Energy Engineering in Q2 [7][41] Physical Workload - June saw a decline in cement production, with a year-on-year decrease of 5.3%, although the decline rate has narrowed compared to May [8][50] - Data for July shows improvements in construction material supply and asphalt operation rates, indicating a potential recovery in physical workload [8][50] Project Funding - The funding availability for construction projects remains stable, with a funding rate of 58.89% as of July 15, showing a slight decrease from the previous week [9][58] - Special bond issuance exceeded CNY 500 billion in June, with over CNY 200 billion in new special bonds aimed at debt replacement [9][60] - The report outlines that the issuance of special refinancing bonds is progressing well, with plans to issue CNY 18,246 billion for debt replacement in 2025 [9][69]

1. Report Industry Investment Rating - The report gives a bullish rating for both coke and coking coal [1] 2. Core Viewpoints - The current market is mainly influenced by domestic macro - policies. The release of the Politburo meeting notice and the expiration of overseas tariff extension on August 12 are important time points. In the short - term, a bullish approach is recommended, but beware of callback risks if the market accelerates [5] - For coking coal, mine production recovery is slow, while downstream replenishment enthusiasm is high. Inventory is shifting from mines to downstream. For coke, the first round of price increase has been implemented, and there is still an expectation of further increases. The overall supply - demand of coke is tight, and if steel prices continue to rise, industrial chain profits may be transmitted upstream [6] - The news of the National Energy Administration's verification of coal mine over - production has heated up the market. The market sentiment is positive, and the monthly spread has started to go into positive arbitrage, indicating a reversal of industrial expectations [7] 3. Summary by Related Catalogs 3.1 Coking Coal 3.1.1 Market Conditions - Spot prices have increased, and futures are rising rapidly. Mongolian 5 prime coking coal is reported at 1029 yuan/ton (+0), and the active contract is reported at 1135.5 yuan/ton (+87). The basis is - 86.5 yuan/ton (-87), and the September - January spread is - 60 yuan/ton (+28.5) [2] 3.1.2 Supply - Mine production recovery is below expectations. The operating rate of 523 mines is reported at 86.07% (+0.55), and the operating rate of 110 coal washing plants is reported at 62.85% (+0.53) [2] 3.1.3 Demand - The productivity of 230 independent coking enterprises is reported at 72.9% (+0.18), showing flat demand [2] 3.1.4 Inventory - Upstream inventory is decreasing, and downstream inventory is increasing. The clean coal inventory of 523 mines is reported at 339.07 million tons (-38.11), the clean coal inventory of coal washing plants is 191.54 million tons (-5.53), the inventory of 247 steel mills is 791.1 million tons (+8.17), the inventory of 230 coking enterprises is 790.19 million tons (+37.75), and the port inventory is 321.5 million tons (-0.14) [3] 3.2 Coke 3.2.1 Market Conditions - Spot prices have increased, and futures are rising rapidly. The quasi - first - grade coke in Tianjin Port is reported at 1320 yuan/ton (+50), and the active contract is reported at 1707.5 yuan/ton (+10). The basis is - 288 yuan/ton (+43.76), and the September - January spread is - 35.5 yuan/ton (+19) [4] 3.2.2 Supply - The productivity of 230 independent coking enterprises is reported at 72.9% (+0.18), and supply recovery is limited due to high raw material costs and delayed price increases [4][6] 3.2.3 Demand - Demand has increased more than expected, and the supply - demand gap has widened. The capacity utilization rate of 247 steel mills is reported at 90.89% (+0.99), and the daily average pig iron output is 242.44 million tons (+2.63) [4] 3.2.4 Inventory - Upstream inventory is decreasing, and downstream inventory is increasing. The inventory of 230 coking enterprises is 55.55 million tons (-4.03), the inventory of 247 steel mills is 638.99 million tons (+1.19), and the port inventory is 199.11 million tons (-0.97) [4]

Group 1 - The core viewpoint of the news is that there is a significant inflow of funds into infrastructure assets, particularly through the infrastructure ETF (159619), which saw a net inflow of over 40 million units today [1] - The Yarlung Tsangpo River downstream hydropower project, which involves the construction of five cascade power stations with a total investment of approximately 1.2 trillion yuan, has been officially launched [1] - The project is a national strategic initiative that encompasses multiple industry chains, including hydropower construction, infrastructure development, ultra-high voltage transmission, equipment manufacturing, civil explosives, and cement supply, indicating a gradual release of demand across the upstream and downstream industry chains [1] Group 2 - The Chinese government is implementing more proactive macro policies this year, with solid progress in the construction of "dual-weight" projects, leading to a steady increase in infrastructure investment [1] - As special bonds are gradually allocated to projects and relevant policies from the Central Urban Work Conference are being implemented, it is expected that fiscal policy support and improvements in financing will gradually manifest in investment and physical output [1] - The infrastructure ETF (159619) tracks the CSI Infrastructure Index, which includes representative companies from the construction, building materials, and engineering machinery sectors, reflecting the overall performance of the infrastructure industry [2]

Summary of the Conference Call on Yaxia Motuo Hydropower Project Industry Overview - The Yaxia Motuo hydropower project is a significant infrastructure initiative with a total investment of 1.2 trillion yuan, which is expected to have a substantial impact on related investment targets, particularly in the blasting, cement, and tunnel equipment sectors [1][9][5]. Key Points and Arguments - **Project Progress**: The construction of the Yaxia Motuo hydropower project has accelerated significantly, with major infrastructure such as roads, bridges, and tunnels nearly completed. This has led to increased demand in the construction industry [3][4]. - **Market Reaction**: The market has reacted positively to the project, with high liquidity and a strong focus on related sectors such as construction materials. The project has garnered attention similar to the real estate policies at the end of 2022, with frequent roadshows and discussions among various market participants [1][10]. - **Investment Opportunities**: Recommended companies include: - **Iron Construction Heavy Industry**: High participation in hydropower projects and strong global competitive advantage [3][18]. - **Subote**: Noted for its strong market share in the additives sector [3][16]. - **China Electric Power Construction**: Involved in design and construction, though with relatively lower earnings elasticity [5][18]. - **Demand and Supply Dynamics**: The construction industry is experiencing high demand, estimated between 100 billion to 400 billion yuan. Supply is concentrated among a few companies, creating a favorable supply landscape [15]. - **Institutional Interest**: There is significant interest from institutions and market participants, with discussions and inquiries reflecting a high level of engagement similar to previous market events [10][13]. Additional Important Insights - **Regional Investment**: Central enterprises are increasing investments in Tibet, not limited to the Yaxia Motuo project, which may be linked to the 60th anniversary of the Tibet Autonomous Region [12][21]. - **Future Catalysts**: Key construction milestones, such as the initiation of the Meiying Dam and the use of TBM hard rock tunneling machines, are expected to be critical points of interest for investors [20]. - **Market Sentiment**: The recent news regarding the project has exceeded market expectations, particularly due to the direct involvement of high-level government officials, which has enhanced confidence in the investment [7][9]. Conclusion The Yaxia Motuo hydropower project represents a significant investment opportunity within the construction and infrastructure sectors, with strong institutional interest and positive market sentiment. The ongoing developments and future milestones will be crucial for investors to monitor.

点击注册小程序 查看完整报告 特别申明： 本订阅号中所涉及的证券研究信息由光大证券研究所编写，仅面向光大证券专业投资者客户，用作新媒体形势下研究 信息和研究观点的沟通交流。非光大证券专业投资者客户，请勿订阅、接收或使用本订阅号中的任何信息。本订阅号 难以设置访问权限，若给您造成不便，敬请谅解。光大证券研究所不会因关注、收到或阅读本订阅号推送内容而视相 关人员为光大证券的客户。 报告摘要 事件： 新华社报道，雅鲁藏布江下游水电工程开工仪式7月19日上午在西藏自治区林芝市举行。中共中央政治局常 委、国务院总理李强出席开工仪式，并宣布工程正式开工。国家发展改革委、项目业主中国雅江集团、项目参 研参试参建单位代表中国电建、西藏自治区主要负责同志先后发言。 点评： 雅鲁藏布江下游水电站正式开工，总投资额约1.2万亿元 西藏水能资源主要集中分布在雅鲁藏布江、怒江、澜沧江和金沙江干流。其中，雅鲁藏布江流域干流水能资源 最丰富，理论蕴藏量近8000万千瓦。雅鲁藏布江下游水电工程位于西藏自治区林芝市，主要采取截弯取直、隧 洞引水的开发方式，建设5座梯级电站，梯级开发能够将梯级水库上一级发电后的尾水，流入下一级再次发 电，一股水 ...

Summary of Conference Call on Yarlung Tsangpo River Hydropower Project Industry Overview - The Yarlung Tsangpo River hydropower project has a total investment of approximately 1.2 trillion yuan, with an installed capacity nearly three times that of the Three Gorges Project, significantly increasing the demand for new energy and unmanned equipment [1][2][4] - The project is located in a high-altitude area with harsh construction conditions, leading to a high equipment investment ratio of about 20%, creating substantial demand for large excavators, mining machinery, concrete mixers, and shield machines [1][2][4] Key Points and Arguments - The project is expected to generate a demand for approximately 1,000 large excavators, accounting for about 10% of the domestic sales market [2][4] - In 2024, China's total infrastructure investment is projected to reach approximately 24.8 trillion yuan, with investments in water conservancy, environment, and public facilities management nearing 10 trillion yuan, providing significant incremental demand for the industrial equipment sector [3][5] - Since March 2024, excavator sales have turned positive, driven by the renewal of old energy cycles, equipment electrification, and second-hand machine exports, indicating an upward trend in the domestic photovoltaic industry over the next three to four years [6][7] Impact on Related Companies - The Yarlung Tsangpo project is expected to enhance the profitability of related companies due to the high market demand for specialized, high-value equipment [4][5] - Key companies to focus on include XCMG, SANY Heavy Industry, Shantui, Zoomlion, and Liugong, which have competitive advantages in the project and excel in mining trucks, training equipment, and shield machines [2][13][14] Market Trends - The domestic industrial machinery sector is currently in an upward cycle, with excavator sales showing consistent growth since March 2024, and concrete machinery and lifting machinery experiencing double-digit growth in sales and revenue in the second quarter [7][8] - The industrial machinery sector's performance heavily relies on exports, with export revenue contributing approximately 52% and profit exceeding 70% in 2024 [8][9] Global Market Influence - The overseas market is showing signs of stabilization, with strong demand from emerging markets in Latin America, Africa, and Southeast Asia, and a recovery trend in Europe and North America [10][11] - The global competitiveness of China's construction machinery manufacturing industry is improving, with domestic companies increasing overseas capital expenditure, enhancing production capabilities, R&D investment, and sales channels [11][12] Investment Opportunities - The current state of the industrial machinery sector presents high investment value, especially after a correction in May, with valuations at historical lows [12][14] - Companies such as XCMG, SANY Heavy Industry, Shantui, Zoomlion, and Liugong are highlighted as strong investment candidates due to their competitive advantages and performance in the Yarlung Tsangpo project [14]

Investment Rating - The report maintains an "Overweight" rating for the construction and building materials industry [4] Core Insights - The commencement of the Yarlung Zangbo River downstream hydropower project, with a total investment of approximately 1.2 trillion yuan, is expected to generate substantial construction and material orders [1][2] - The project is estimated to have a capacity of 60 million kW, with an average construction cost of 20,344 yuan/kW for hydropower projects in 2023 [1][2] - The project is anticipated to have a construction period of 15-20 years, leading to an annual investment of 60-80 billion yuan [2] - The project will significantly boost infrastructure investment growth in China, with a 4.6% year-on-year increase in infrastructure investment in the first half of 2025 [3] Summary by Sections Project Overview - The Yarlung Zangbo River downstream hydropower project is located in Linzhi City, Tibet, and involves the construction of five tiered power stations to enhance power generation efficiency [1] - The total investment is about six times that of the Three Gorges Project, which had a total investment of 207.2 billion yuan [2] Investment Structure - The investment structure for hydropower projects includes approximately 32%-45% for permanent construction, 18%-25% for electromechanical equipment, and 10%-35% for other costs [2] Market Impact - The project is part of China's "14th Five-Year Plan" and is expected to effectively stimulate infrastructure investment growth [3] - Recommended companies to watch include China Power Construction, China Energy Engineering, and several others involved in construction and materials [3]