Investment Rating - The report maintains an "Overweight" rating for the construction decoration industry [1] Core Viewpoints - Significant attention is being given to major infrastructure projects, with recommendations for sectors such as water conservancy and cleanroom engineering, which are experiencing structural prosperity [1] - In the first four months of 2025, China's infrastructure investment increased by 5.8% year-on-year, with water management investment growing by 30.7%, water transport investment by 26.9%, and air transport investment by 13.9% [10][11] - The report highlights the potential for overseas engineering demand to remain robust, particularly in countries involved in the Belt and Road Initiative, with new contracts signed amounting to USD 64.54 billion, a year-on-year increase of 17.4% [11] - The report suggests focusing on companies with transformation layouts in high-demand sectors such as energy conservation, carbon reduction, and new energy-related infrastructure [11] Summary by Sections Industry Dynamics - The central government plans to support urban renewal actions in 20 cities, with a budget exceeding 20 billion yuan, which is expected to boost demand for related engineering and materials [13][14] - The Ministry of Housing and Urban-Rural Development will enhance supervision to implement new residential project standards, promoting the application of new construction technologies and materials [15] Market Performance - The construction decoration sector saw a weekly increase of 1.25%, outperforming the CSI 300 and Wind All A indices, which increased by 0.88% and 1.61%, respectively [18] - Notable stock performances include Zhongheng Design and Chongqing Construction, which saw significant weekly gains of 26.5% and 26.1%, respectively [19] Recommendations - The report recommends focusing on leading state-owned enterprises and local state-owned enterprises in the infrastructure sector, which are expected to see valuation recovery opportunities [10] - Specific stock recommendations include China Communications Construction, China Electric Power Construction, and China Railway [10]

Core Viewpoint - The company, originally established in 2008 as a leading cleanroom system integrator, is expanding its business from medical applications to laboratory integration and electronic cleanroom services, aiming to create a second growth curve and enhance its market position in the semiconductor ecosystem [1][2]. Group 1: Business Expansion and Market Position - The company has transitioned from focusing solely on medical cleanrooms to include laboratory integration and electronic cleanroom services, having served over 800 clients including public hospitals and industrial electronics firms [1]. - The company announced a name change from "Huakang Medical" to "Huakang Clean" in March 2025, and plans to issue 750 million yuan in convertible bonds to support new business initiatives [1]. - A joint venture named "Wuhan Guanggu Huafeng Operation Technology Co., Ltd." was established with partners to strengthen future growth in the cleanroom technology sector [1]. Group 2: Market Dynamics and Financial Performance - The medical purification system market in China is valued at approximately 31.27 billion yuan annually, with the company holding orders worth 2.753 billion yuan for 2024, indicating a robust order book [2]. - The company has achieved positive operating cash flow of 150 million yuan in 2024, indicating a balance between orders and cash flow, which supports sustainable growth in its core business [2]. - The electronic cleanroom sector, which accounted for 54% of the cleanroom industry in 2022, is expected to see continued demand growth, with the company entering this market through strategic partnerships and service capabilities [2]. Group 3: Revenue and Profit Forecast - Revenue projections for the company from 2025 to 2027 are estimated at 2.8 billion, 3.6 billion, and 4.8 billion yuan, representing year-on-year growth rates of 61%, 32%, and 33% respectively [3]. - The net profit attributable to the parent company is forecasted to be 170 million, 220 million, and 300 million yuan for the same period, with growth rates of 156%, 30%, and 35% respectively [3]. - The company is expected to maintain a solid growth trajectory based on its established experience in the medical cleanroom sector and its expansion into the semiconductor cleanroom market [3].

Investment Rating - The report gives a "Buy" rating for the company, Huakang Clean [5]. Core Views - Huakang Clean is a leading cleanroom system integrator in the medical sector, expanding into the electronic cleanroom market, which is experiencing high demand [3][5]. - The company has a solid order backlog in the medical sector, with a total order value of 2.753 billion yuan for 2024, indicating stable growth prospects [4][5]. - The electronic cleanroom segment is expected to become a significant growth driver, with the market for electronic cleanrooms projected to exceed 1 trillion yuan in 2022 [5][6]. Summary by Sections Company Overview - Established in 2008, Huakang Clean has evolved from a medical cleanroom service provider to include laboratory integration and electronic cleanroom services, serving over 800 clients [3][4]. - The company rebranded from "Huakang Medical" to "Huakang Clean" in March 2025 to better reflect its focus on clean technology [3]. Market Potential - The cleanroom market in China is projected to reach approximately 312.68 billion yuan annually, driven by the increasing demand for clean surgical rooms and system upgrades [4][48]. - The electronic cleanroom market, which accounted for 54% of the cleanroom industry in 2022, is expected to see continued growth due to rising semiconductor investments [5][56]. Financial Projections - Revenue forecasts for Huakang Clean are 2.755 billion yuan in 2025, 3.644 billion yuan in 2026, and 4.830 billion yuan in 2027, with expected growth rates of 61%, 32%, and 33% respectively [5][7]. - The net profit is projected to reach 171 million yuan in 2025, 222 million yuan in 2026, and 301 million yuan in 2027, reflecting growth rates of 156%, 30%, and 35% respectively [5][7]. Competitive Position - Huakang Clean holds a strong competitive position in the medical cleanroom sector, ranking among the top three in terms of bid amounts from 2017 to 2020 [48]. - The company has established a robust reputation and project experience, which enhances its ability to secure new contracts and expand its market share [71][79].