Investment Rating - Industry Rating: Outperform the market (maintained rating) [5] Core Viewpoints - The construction index rose by 0.32% this week, while the Shanghai and Shenzhen 300 index increased by 1.07%, indicating that the construction sector underperformed the market by 0.75 percentage points. Professional engineering, architectural design, and infrastructure sectors showed stronger gains [1][33] - Infrastructure investment continued to support the economy, with energy-related and water conservancy investments maintaining strength, while transportation infrastructure showed signs of recovery. For the first half of 2025, real estate development investment, narrow infrastructure, broad infrastructure, and manufacturing grew by -11.2%, +4.6%, +8.9%, and +7.5% year-on-year, respectively [1][13] - Recent disclosures of second-quarter orders from central state-owned enterprises (SOEs) indicate a recovery trend, with China Railway's second-quarter orders showing a year-on-year growth of 20.08%. The overall order situation for central SOEs is optimistic, suggesting a rebound in physical workload [2][27] Summary by Sections Macro and Micro Verification of Infrastructure Recovery - Infrastructure investment in June continued to provide support, with energy and water conservancy investments remaining strong, while transportation infrastructure showed signs of recovery. The year-on-year growth rates for real estate development investment, narrow infrastructure, broad infrastructure, and manufacturing from January to June 2025 were -11.2%, +4.6%, +8.9%, and +7.5%, respectively [1][13][14] Recent Order Disclosures from Central SOEs - Central SOEs such as China Railway, China Energy Construction, China Chemical, and China Nuclear Engineering reported a recovery in second-quarter orders. For instance, China Railway's first-half orders showed a year-on-year growth of 2.8%, with a significant increase in the second quarter [2][27][28] Valuation Perspective - As of July 18, the construction sector's PE (TTM) and PB (LF) ratios were among the lowest across all primary industries, indicating significant room for valuation improvement. The construction sector's PE (TTM) was 11.12 times, with a historical percentile of 48.50%, compared to the Shanghai and Shenzhen 300's PE of 13.39 times [3][30][32]

国泰中证基建交易型开放式指数证券投资基金 2025 年第 2 季度报告 国泰中证基建交易型开放式指数证券投资基金 基金管理人：国泰基金管理有限公司 基金托管人：中信建投证券股份有限公司 报告送出日期：二〇二五年七月十九日 国泰中证基建交易型开放式指数证券投资基金 2025 年第 2 季度报告 §1 重要提示 基金管理人的董事会及董事保证本报告所载资料不存在虚假记载、误导性陈述或重大遗 漏，并对其内容的真实性、准确性和完整性承担个别及连带责任。 标的指数成份股及其权重构建基金股票投资组合，并根据 投资策略 基金托管人中信建投证券股份有限公司根据本基金合同约定，于 2025 年 07 月 17 日复 核了本报告中的财务指标、净值表现和投资组合报告等内容，保证复核内容不存在虚假记载、 误导性陈述或者重大遗漏。 基金管理人承诺以诚实信用、勤勉尽责的原则管理和运用基金资产，但不保证基金一定 盈利。 基金的过往业绩并不代表其未来表现。投资有风险，投资者在作出投资决策前应仔细阅 读本基金的招募说明书。 本报告中财务资料未经审计。 本报告期自 2025 年 04 月 01 日起至 2025 年 06 月 30 日止。 | | ...

Investment Rating - The report gives an "Accumulate" rating for the company, marking its first coverage [5]. Core Viewpoints - The company is a leader in concrete additives, with a recovery in performance from its bottom [1][14]. - Infrastructure demand is providing a crucial support, while supply is accelerating its exit from the market [1][50]. - The company has a strong technical foundation and is involved in major engineering projects, which enhances its reputation and customer base [2][14]. Summary by Sections Company Overview - The company specializes in the research, production, and sales of concrete additives, with production bases in multiple provinces [1][14]. - It has participated in significant projects such as the Hong Kong-Zhuhai-Macao Bridge and the Three Gorges Project, establishing a solid reputation [14]. Industry Analysis - The real estate sector is experiencing a downturn, leading to a 10.1% year-on-year decline in concrete production in 2024 [1][41]. - Infrastructure investment remains resilient, with a reported 8.9% year-on-year growth in the first half of 2025, partially offsetting the decline in real estate demand [45][48]. Financial Performance - In 2024, the company reported revenues of 35.6 billion yuan, a slight decrease of 0.75% year-on-year, and a net profit of 1.0 billion yuan, down 40.2% [20]. - The first quarter of 2025 showed a recovery with revenues of 6.8 billion yuan, up 17.8% year-on-year, and a net profit of 0.2 billion yuan, up 15.4% [21]. Profitability and Cash Flow - The company is expected to see improvements in profit margins due to operational optimizations and scale effects, with projected revenues of 38.0 billion yuan in 2025 [3][4]. - The cash flow from operating activities is expected to significantly improve, with a net cash flow of 5.8 billion yuan in 2024, up 57.0% year-on-year [2]. Future Outlook - The company anticipates revenue growth of 24.4% over the next three years, with net profits projected to increase to 2.46 billion yuan by 2027 [3][4]. - The demand for functional materials is expected to grow, with a projected revenue increase of 29.5% in 2024 [2].

Core Viewpoint - The article highlights the robust growth in China's infrastructure investment and the corresponding increase in sales of construction machinery, particularly excavators and loaders, indicating a positive economic outlook for the industry [1][2]. Infrastructure Investment Trends - In the first half of the year, infrastructure investment across the country showed a "blossoming" trend, with six provinces maintaining an operating rate above 50% for six consecutive months [2][4]. - The average operating rate for engineering machinery in the first half of 2025 was 44.81%, with a quarter-on-quarter increase of 4.62% in the second quarter [3]. Regional Performance - Six provinces, including Anhui, Fujian, Henan, Jiangxi, Zhejiang, and Chongqing, led the way with operating rates exceeding 50%, particularly in East and South China [4]. - Fifteen provinces reported increased operating rates compared to the same period last year, indicating a higher level of infrastructure activity and project execution [5]. Equipment Utilization - In the first half of 2025, the average operating rate for hoisting equipment was 66.87%, the highest among all equipment categories, with top-performing provinces including Anhui, Hubei, and Jiangxi [6][7]. - The central region had the highest average operating rate at 50.13%, with Anhui leading at 66.24% [8]. Western and Northeastern Developments - The western region's operating rate was 48.45%, benefiting from the "Belt and Road" initiative, with significant increases in the workload of specific equipment types [9]. - The northeastern region showed a recovery with an operating rate of 45.68%, particularly strong performance in stackers and crawler cranes [10]. Eastern Region Insights - The eastern region's operating rate was 45.58%, with concrete equipment leading in utilization rates [11].

Group 1 - In the first half of 2025, infrastructure investment across the country showed a "blossoming" trend, providing continuous momentum for economic development, with an average construction machinery operating rate of 44.81% [1] - The operating rate in the second quarter was 47.1%, an increase of 4.62% compared to the first quarter, with 15 provinces exceeding an average operating rate of 50% [1] - Six provinces, including Anhui, Fujian, Henan, Jiangxi, Zhejiang, and Chongqing, maintained a comprehensive operating rate above 50% for six consecutive months, indicating strong performance particularly in East and South China [1] Group 2 - In the first half of 2025, the average operating rate of lifting equipment was 66.87%, ranking first among various types of equipment [1] - In June 2025, sales of various aerial work vehicles reached 539 units, a year-on-year increase of 153%, with domestic sales of 509 units up by 147% and exports of 30 units up by 329% [1] - From January to June 2025, a total of 2,445 aerial work vehicles were sold, representing a year-on-year growth of 27.9%, with domestic sales of 2,312 units increasing by 25% and exports of 133 units rising by 115% [1] Group 3 - In June 2025, sales of various forklifts reached 137,570 units, a year-on-year increase of 23.1%, with domestic sales of 83,892 units up by 27.3% and exports of 53,678 units up by 17.2% [2] - From January to June 2025, a total of 739,334 forklifts were sold, reflecting a year-on-year growth of 11.7%, with domestic sales of 476,382 units increasing by 9.79% and exports of 262,952 units rising by 15.2% [2] - Major engineering machinery companies such as SANY Heavy Industry, XCMG, Zoomlion, and Liugong have continued to see steady growth in overseas markets, with overseas sales accounting for nearly or exceeding 50% [2]

Core Insights - In the first half of 2025, national infrastructure investment showed a "blossoming" trend, with an average construction rate of 44.81% for engineering machinery, and a second-quarter rate of 47.1%, reflecting a 4.62% increase from the first quarter [1][4] Group 1: Regional Performance - Six provinces, including Anhui, Fujian, Henan, Jiangxi, Zhejiang, and Chongqing, maintained a construction rate above 50% for six consecutive months, indicating robust infrastructure investment, particularly in East and South China [4][5] - The average construction rate for 15 provinces increased compared to the same period last year, showcasing higher activity levels in infrastructure projects, which supports local economic stability and development [5][8] Group 2: Equipment Utilization - In the first half of 2025, the average construction rate for hoisting equipment was 66.87%, the highest among all equipment categories, with top-performing provinces including Anhui, Hubei, and Jiangxi [7][8] - The central region had the highest overall construction rate at 50.13%, with Anhui leading at 66.24%, followed by Jiangxi and Henan [8][9] Group 3: Regional Highlights - The western region's construction rate was 48.45%, benefiting from the "Belt and Road" initiative, with significant projects in energy and transportation [11] - The northeastern region showed a construction rate of 45.68%, with notable increases in the utilization of stackers and crawler cranes, indicating a recovery in economic activity [13] - The eastern region's construction rate was 45.58%, with concrete equipment leading in utilization, reflecting strong demand for construction activities [15]

Core Viewpoint - The company has shown significant growth in its bidding amounts for infrastructure projects, indicating a strong focus on its core business and a positive outlook for future orders [2][4]. Group 1: Bidding Performance - In Q2, the company achieved a total bidding amount of 37.559 billion yuan, representing a year-on-year increase of 25% [2]. - For the first half of the year, the cumulative bidding amount reached 72.24 billion yuan, up 22.2% year-on-year [2]. - The infrastructure sector accounted for 61.74 billion yuan of the total bidding in the first half, reflecting a growth of 25.88% [2]. - The construction sector saw a cumulative bidding amount of 10.412 billion yuan, with a year-on-year increase of 4.34% [2]. - Other business areas experienced a slight decline, with a cumulative bidding amount of 0.89 billion yuan, down 4.37% year-on-year [2]. Group 2: Future Project Outlook - The company is expected to benefit from the gradual rollout of highway projects in Sichuan Province in the second half of 2024, with multiple highway projects already won as an investor [2][3]. - A total of 36 highway projects were introduced in June 2024, covering approximately 4,100 kilometers and involving a total investment of about 840 billion yuan [2]. - The company successfully won bids for eight highway projects with a total investment exceeding 260 billion yuan [2]. Group 3: Industry Growth Potential - The total scale of highways in Sichuan Province is projected to reach approximately 20,000 kilometers by 2035, indicating sustained demand for construction [3]. - In 2024, Sichuan is expected to complete the construction of 507 kilometers of new highways, bringing the total operational mileage to 10,310 kilometers, ranking third in the country [3]. - The company anticipates that project preparations will accelerate in the second half of 2024, leading to increased order conversion during the peak construction periods in Q3 and Q4 [3]. Group 4: Dividend and Valuation - The company plans to increase its dividend payout ratio from 50% to 60% for 2025, maintaining this level through 2027 [4]. - If the company achieves an estimated profit of 8 billion yuan in 2025, the corresponding dividend yield would exceed 6% [4]. - The projected earnings for 2025-2027 are estimated at 8.29 billion, 9.25 billion, and 10.4 billion yuan, respectively, with current valuations of 9.03, 8.09, and 7.19 times [4].

Core Insights - In the first half of the year, national infrastructure investment showed a "blooming" trend, providing continuous momentum for economic development [1] - The average operating rate of construction machinery nationwide was 44.81%, with a second-quarter rate of 47.1%, reflecting a quarter-on-quarter increase of 4.62% [1] - Fifteen provinces reported an average operating rate exceeding 50%, with six provinces (Anhui, Fujian, Henan, Jiangxi, Zhejiang, and Chongqing) maintaining a comprehensive operating rate above 50% for six consecutive months [1] Equipment Performance - Among major equipment categories, the average operating rate of lifting equipment was 66.87%, ranking first among all equipment types [1]

Investment Rating - The industry investment rating is "Positive" and maintained [10] Core Insights - In the first half of the year, narrow infrastructure investment reached 9.2 trillion yuan, a year-on-year increase of 4.6%, with a sequential decrease of 1.0 percentage points. Broad infrastructure investment totaled 12.4 trillion yuan, a year-on-year increase of 8.8%, with a sequential decrease of 1.2 percentage points [2][8][13] - Water conservancy investment growth has slowed down, while transportation investment has accelerated significantly. In June, water conservancy and public facility management investment recorded a negative growth of -5.2%, with a year-on-year decrease of -8.4%. In contrast, transportation investment increased by 9.5% year-on-year, with significant growth in railway and road investments [13] - Cement production showed weakness in June, but high-frequency data indicated improvement in July. Cement output in the first half of the year decreased by 4.3% year-on-year, while July data showed a slight recovery in demand [13] - The overall economic data for the first half of the year showed stable growth, with marginal weakening in investment. However, infrastructure is expected to remain supported throughout the year due to the gradual use of fiscal funds and new policies [13] - Emphasis on the investment value of central and state-owned construction enterprises, with potential "real dividend" attributes in certain quality segments and regions [13] Summary by Sections Infrastructure Investment - Narrow infrastructure investment was 9.2 trillion yuan, up 4.6% year-on-year, with a sequential decrease of 1.0 percentage points. Broad infrastructure investment was 12.4 trillion yuan, up 8.8% year-on-year, with a sequential decrease of 1.2 percentage points [2][8][13] Sector Performance - Water conservancy investment growth has turned negative, while transportation investment has accelerated. In June, water conservancy investment decreased by 5.2% month-on-month, while transportation investment increased by 9.5% year-on-year [13] Cement Production - Cement production in the first half of the year decreased by 4.3% year-on-year, with signs of recovery in July [13] Economic Outlook - The overall economic data indicates stable growth, with infrastructure expected to remain supported due to fiscal policies [13] Investment Opportunities - Focus on the investment value of central and state-owned construction enterprises, particularly in quality segments and regions [13]

Core Viewpoint - Infrastructure investment growth has slowed down in June, but overall remains stable in the first half of the year, contributing to economic stability within a reasonable range [1][2][3] Group 1: Infrastructure Investment Trends - Narrow infrastructure investment (excluding power, heat, gas, and water supply) grew by 4.6% year-on-year in the first half of the year, down from 5.6% in the first five months [1] - Broad infrastructure investment growth, including power and water supply, was approximately 8.9% in the first half, a decline of 1.5 percentage points from the previous five months [1] - June saw a significant slowdown in narrow infrastructure investment growth to about 2%, the slowest since August of the previous year [2] Group 2: Factors Influencing Investment - The slowdown in infrastructure investment growth is attributed to weather disturbances, low funding availability, and a significant drop in construction material prices [2] - Long-term trends indicate a shift in funding allocation towards more effective innovation and technology sectors, reducing the impact of government debt on traditional infrastructure investment [2][3] Group 3: Fiscal Policy and Funding - Fiscal spending has shifted towards social welfare and technology, with infrastructure-related expenditures showing a slight decline [3] - Government bond issuance has been front-loaded, with cumulative financing of 7.6 trillion yuan in the first half of the year, an increase of approximately 4.3 trillion yuan compared to the same period last year [3] - The issuance of super long-term special bonds and local government special bonds is set to accelerate in the second half of the year, with approximately 0.75 billion yuan in super long-term bonds and 2.24 trillion yuan in new special bonds expected [4] Group 4: Future Outlook - The establishment of new policy financial tools is anticipated to address capital shortages for project construction, with estimates around 500 billion yuan [5] - Experts suggest that incremental policies may include increasing government borrowing to stimulate infrastructure investment [5]