Investment Rating - The report maintains a "Buy" rating for major construction enterprises, indicating a significant demand for rebound in the construction sector compared to the banking sector [8][31]. Core Insights - The domestic construction industry has evolved into a model with financial attributes similar to banks, where construction companies provide financing to clients, thus resembling "shadow banks" [1][14]. - The construction sector has lagged behind the banking sector in terms of stock performance, with a 76.1% increase in the banking sector since December 20, 2023, compared to only 13.5% in the construction sector, indicating a clear need for catch-up [2][15]. - The dividend yield of leading construction state-owned enterprises (SOEs) is attractive, with several companies offering yields above 3% in A-shares and over 5% in H-shares, making them appealing for long-term investors [3][22]. Summary by Sections Section 1: Industry Overview - The construction industry operates with a business model that has financial characteristics, requiring companies to provide upfront financing to secure projects, which has led to a high-leverage, asset-heavy structure [1][14]. - Major assets of construction firms include cash and receivables, which are akin to financial assets, while liabilities are primarily operational debts, similar to bank deposits [1][14]. Section 2: Market Performance - The construction sector's performance has been hindered by concerns over slow repayments from government and real estate developers, but these pessimistic expectations are now largely priced in, suggesting a potential for valuation recovery [2][15]. - The report highlights that the construction sector's valuation has been stabilizing, indicating a potential for upward movement as market conditions improve [2][15]. Section 3: Dividend Appeal - A-shares of leading construction SOEs show a competitive dividend yield, with companies like China Railway, China Railway Construction, and China Communications Construction yielding over 3% [3][22]. - In H-shares, the average dividend yield for construction SOEs matches that of leading banks, reflecting strong investment attractiveness [3][22]. Section 4: Policy Impact - Upcoming policies are expected to accelerate infrastructure project implementation, which, combined with a low base effect, may lead to improved revenue and performance for construction SOEs in the latter half of the year [4][26]. - The report anticipates that fiscal policies will be enhanced, with an increase in the issuance of special bonds and other financing tools to support infrastructure development [4][26]. Section 5: Competitive Landscape - The construction industry is witnessing a push against "involution" or excessive competition, with major players advocating for a focus on sustainable growth and innovation rather than aggressive expansion [7][30]. - This initiative aims to improve project profitability and stabilize the competitive environment within the industry [7][30]. Section 6: Investment Recommendations - The report recommends investing in undervalued construction SOEs, highlighting companies such as China Energy Engineering, China State Construction, and China Communications Construction as key targets for investment [8][31]. - The expected recovery in earnings and the attractive dividend yields position these companies favorably for long-term investment [8][31].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core View of the Report - The report suggests treating the situation with a strategy of testing short positions on rebounds [3] Group 3: Summary According to Related Catalogs Industry News - 33 construction companies jointly issued an "anti-involution" initiative to promote industry transformation and abandon "involutionary" competition [2] - Many provinces, including Hebei, Chongqing, Liaoning, Shanghai, Zhejiang, and Hubei, have a town old residential area renovation start rate of over 50% [2] - From June 30th to July 6th, the total transaction area of newly built commercial housing in 10 key cities was 1.9723 million square meters, a 36.6% week-on-week and 8.2% year-on-year decrease; the total transaction area of second-hand housing was 1.9685 million square meters, a 14.8% week-on-week and 4.4% year-on-year decrease [2] - In June, the sales of various excavators were 18,804 units, a 13.3% year-on-year increase, with domestic sales of 8,136 units (6.2% year-on-year increase) and exports of 10,668 units (19.3% year-on-year increase) [2] Market Situation of Steel Products - After the steel price increase last week, steel products have been consolidating in the first two trading days of this week [2] - Although information such as "anti-involution" and Tangshan production restrictions has pushed up prices, high daily average pig iron production, good steel mill profits, and weak downstream demand pose resistance to price increases [2] Investment Strategy - In the absence of effective improvement in demand, it is advisable to mainly test short positions on rebounds [2][3] Later Concerns - Macro policies and downstream demand conditions should be monitored [3]

Investment Rating - The industry investment rating is "Positive" and maintained [11] Core Viewpoints - The construction industry is entering a phase of total volume stabilization, moving away from blind expansion and excessive debt. The focus is on intrinsic and long-term value rather than scale and blind expansion [14] - The initiative aims to resist unhealthy competition and promote a fair market order, emphasizing the importance of technology-driven transformation for sustainable development [14] - The overall business environment for construction companies is expected to be challenging in 2024, with a projected revenue decline of 4.29% to 8.6963 trillion yuan and a 13.74% decrease in profits [14] Summary by Sections Event Description - On July 7, a high-quality development theme event was held, where 33 construction enterprises issued a joint initiative to promote a clean and fair industry environment [2][8] Industry Trends - The initiative highlights the need for a new industry ecosystem, actively resisting bad practices and promoting social supervision [14] - The focus is on enhancing core competitiveness and transitioning to high-end, intelligent, and green development through technology innovation [14] Financial Outlook - In 2024, the construction industry is expected to face significant pressure, with a historical first decline in overall revenue and profits [14] - The report indicates that if the anti-involution trend is effectively implemented, undervalued quality state-owned enterprises may have opportunities for valuation recovery [14]

Group 1 - The 2025 film box office (including pre-sales) surpassed 30 billion yuan as of July 8, 2023, 11:38 AM, achieving this milestone 28 days earlier than last year after 189 days [1] - The Hong Kong Securities and Futures Commission's CEO announced several measures to optimize and expand the Bond Connect program, including expanding the range of participating institutions for southbound trading and allowing the re-pledging of bonds during the repurchase period [2] - A coalition of 33 construction companies issued a "anti-involution" initiative to promote industry transformation and eliminate "involution-style" competition [3] Group 2 - On July 7, former President Trump indicated at a White House dinner that the deadline for tariff discussions is set for August 1, but he remains open to alternative proposals from other countries [4] - As of the midday close, the Shanghai Composite Index rose by 0.58%, the Shenzhen Component Index increased by 1.27%, and the ChiNext Index climbed by 2.25%. The Hang Seng Index gained 0.78%, while the Hang Seng Tech Index rose by 1.29% [5]