Investment Rating - The report maintains a "Buy" recommendation for the construction industry [1] Core Viewpoints - Infrastructure investment growth remains robust, with a broad infrastructure investment growth rate of 8.9% in the first half of 2025, despite a slight decline from previous values [3][30] - Real estate investment continues to face pressure, with a 11.2% year-on-year decline in real estate development investment in the first half of 2025 [44] - The construction sector is experiencing a slight increase in fund holdings, with a fund holding market value ratio of 0.43% in Q2 2025, which is still below the standard allocation ratio of 1.77% [65][66] Summary by Sections Special Debt Issuance - The pace of special debt issuance has accelerated, with a total of 2.16 trillion yuan issued in the first half of 2025, a year-on-year increase of 45% [6][3] - The government plans to issue 4.4 trillion yuan in new local government special bonds in 2025, focusing on investment construction and land acquisition [6] Infrastructure Investment - Fixed asset investment growth has slowed, with a total of 248,654 billion yuan in the first half of 2025, reflecting a 2.8% year-on-year increase [27] - Infrastructure investment remains resilient, with significant growth in the electricity, heat, gas, and water supply sectors, which saw a 22.8% year-on-year increase [35][30] Real Estate Market - Real estate investment and sales continue to decline, with a 3.5% decrease in commodity housing sales area in the first half of 2025 [44] - New construction and completion areas have seen a narrowing decline, with new construction down 20.0% year-on-year but improving from previous months [46] Fund Holdings in Construction - Fund holdings in the construction sector have slightly increased, with a market value of 132.95 billion yuan in Q2 2025, reflecting a 9.24% increase from Q1 2025 [65] - The construction sector remains underweight compared to the standard allocation, indicating potential for growth [65][66] Recommendations - The report recommends focusing on stable growth, high dividends, overseas expansion, and regional construction projects, highlighting companies such as China State Construction, China Railway, and others [3][1]

Investment Rating - The report maintains a "Recommended" rating for the construction industry [1] Core Viewpoints - Infrastructure investment growth remains robust, with special bond issuance accelerating to support major projects [3][6] - Real estate investment and sales are under pressure, but the decline in new construction and completion has narrowed [3][44] - The construction sector is experiencing a slight increase in fund holdings, indicating a low allocation compared to standard benchmarks [3][65] Summary by Sections Special Bond Issuance - The pace of special bond issuance has accelerated in 2025, with a total of 2.16 trillion yuan issued in the first half of the year, a 45% year-on-year increase [6] - The government plans to issue 4.4 trillion yuan in new local government special bonds this year, focusing on infrastructure and housing projects [6] Infrastructure Investment - Fixed asset investment (excluding rural households) reached 24.87 trillion yuan in the first half of 2025, with a year-on-year growth of 2.8% [3][27] - Broad infrastructure investment growth was 8.9%, while narrow infrastructure investment growth was 4.6% [30] - Investment in electricity, heat, gas, and water supply grew by 22.8%, while transportation and storage investment increased by 5.6% [3][35] Real Estate Market - Real estate development investment totaled 46.66 billion yuan, down 11.2% year-on-year, with sales area declining by 3.5% [44] - New construction area decreased by 20.0%, but the decline rate has narrowed [46] - The policy measures are expected to improve the supply-demand structure in the real estate market [3][44] Fund Holdings in Construction - As of Q2 2025, the fund holdings in the construction sector accounted for 0.43% of the total market, slightly up from the previous quarter [65] - The construction sector remains underweight compared to the standard allocation ratio of 1.77% [65] - Institutional investors are increasingly favoring segments such as housing construction, decoration, and engineering consulting [65][71]