Core Viewpoint - The construction sector experienced a decline in revenue and net profit in the first half of 2025, but there are optimistic forecasts for a recovery in profitability in the second half of the year [1][4]. Industry Performance - In the first half of 2025, 157 listed companies in the construction sector reported a year-on-year revenue decrease of 5.66% and a net profit decline of 8.89% [1]. - Among these companies, 55 reported revenue growth, while 70 achieved net profit growth [2]. - Eight companies surpassed 100 billion yuan in revenue, with China Electric Power Construction (601669) and China Energy Engineering (601868) being the only ones to report revenue growth [2]. - China Electric Power Construction achieved revenue of 292.76 billion yuan, a 2.66% increase, but its net profit fell by 13.81% to 5.43 billion yuan [2]. - China Energy Engineering reported revenue of 212.09 billion yuan, a 9.18% increase, with net profit rising by 0.72% to 2.80 billion yuan [3]. Future Outlook - Several brokerages are optimistic about the potential for profitability recovery in the construction sector in the second half of 2025 [4]. - The construction sector's gross and net profit margins slightly declined, while the asset-liability ratio increased [4]. - The performance of sub-sectors varied, with chemical engineering and steel structure showing steady growth [4]. - National strategic projects are expected to commence, which may lead to marginal improvements in the sector's fundamentals [4]. Institutional Research - Recent institutional research focused on how construction companies can improve performance, enhance shareholder returns, and develop overseas business [5]. - Chengdu Road and Bridge (002628) reported challenges in 2024 due to industry conditions, but aims to increase revenue and recover from losses in 2025 [5]. - Shandong Road and Bridge (000498) has consistently increased its dividend payouts and plans to enhance shareholder value through higher and more frequent dividends [6]. - China National Machinery Industry Corporation (002051) has made significant strides in overseas markets, securing contracts in Iraq and Kazakhstan, indicating a focus on international industrial projects [6].

Industry Performance - In the first half of 2025, the construction sector's listed companies reported a revenue decline of 5.66% and a net profit drop of 8.89% year-on-year, indicating an overall performance setback for the industry [1][3] - Among 157 listed companies in the construction sector, 55 companies achieved revenue growth, while 70 companies saw an increase in net profit during the same period [1] Key Companies - China Electric Power achieved a revenue of 292.76 billion yuan in the first half of 2025, marking a 2.66% year-on-year increase, although its net profit fell by 13.81% to 5.43 billion yuan [1] - China Energy Construction reported a revenue of 212.09 billion yuan, a 9.18% increase year-on-year, with a net profit of 2.80 billion yuan, reflecting a 0.72% growth [2] Market Outlook - Several broker reports express optimism for a profit recovery in the construction sector in the second half of 2025, despite the first half's revenue and profit pressures [2][3] - The construction sector's gross and net profit margins slightly decreased, while the asset-liability ratio saw a minor increase [2] International Expansion - Many leading companies in the construction industry are actively expanding their international presence, with overseas projects expected to drive market demand growth [3] - Companies like China National Chemical and others have reported significant growth in overseas business, contributing to their overall performance [2][4] Investor Relations - Companies are focusing on improving shareholder returns, with some increasing dividend frequency and amounts, as well as engaging in share buybacks [4] - Chengdu Road and Bridge highlighted efforts to improve performance by securing new orders and enhancing project cash flow, aiming to turn losses into profits [3][4]