Investment Rating - Non-metallic building materials: Buy (Maintain) [3] - Construction and engineering: Overweight (Maintain) [3] Core Views - The funding side is significantly increasing efforts to support infrastructure investment growth, with a broad infrastructure investment growth rate of 5.4% year-on-year from January to August, down 2.5 percentage points from the same period last year [1] - Major projects are intensively starting in multiple regions, with significant project launches in Xinjiang, Jiangsu, Guangxi, Anhui, and Hubei, indicating a construction surge in the fourth quarter [2] - The introduction of new policy financial tools totaling 500 billion yuan is expected to boost infrastructure investment, potentially driving an additional 2.5 trillion yuan in investment [5] Summary by Sections Funding and Investment - The Chinese government is increasing funding to support infrastructure investment, with a focus on large projects to stabilize economic growth [1] - New policy financial tools are being rapidly implemented, with over 1 billion yuan already allocated to various projects, including urban renewal and environmental protection [5] Project Launches - Significant project launches are occurring across various provinces, with a total investment of 332.38 billion yuan planned for 587 projects in Anhui alone [2] - The construction season is expected to accelerate in the fourth quarter as weather conditions improve [2] Investment Recommendations - Recommended companies to focus on include: - China Jushi (leading fiberglass manufacturer entering specialty electronic fabric market) - Guoen Co., Ltd. (leading modified plastics company with strategic layout in PEEK and robotics) - Puyang Huicheng (active magnesium oxide business) - Keda Manufacturing (expanding building materials business in Africa, lithium carbonate business showing turning point) - China State Construction, Oriental Yuhong, and Conch Cement in the infrastructure real estate chain [2]

Financial Performance - In the first half of the year, the general public budget revenue of Jiaozuo City reached 7.99 billion, a year-on-year increase of 4.5% [1] - The general public budget expenditure was 14.23 billion, with 10.75 billion allocated to people's livelihood, accounting for 75.6% of total expenditure [1] Consumer Stimulus Measures - Jiaozuo City implemented the "Two New" actions, securing 346 million in subsidies for replacing old consumer goods, which stimulated consumption by 2.32 billion [1] - The city issued 3 million in government consumption vouchers during the New Year and Spring Festival, leading to an additional consumption of over 20 million [1] Investment and Growth Initiatives - The city issued 1.894 billion in new special bonds for project construction, supporting 27 key projects in municipal infrastructure [1] - Jiaozuo secured 432 million in "Two Heavy" funds for 13 key projects, including urban underground pipeline renovations [1] Support for Enterprises - In the first half of the year, Jiaozuo City allocated 29.7 million in rewards for industrial enterprises operating at full capacity [2] - The city issued 862 entrepreneurial guarantee loans totaling 164 million, along with 675,600 in interest subsidy funds [2] Social Security Investments - Social security and employment expenditures reached 2.418 billion, with minimum living security spending at 115 million, a year-on-year increase of 12.6% [2] - The city's "Three Guarantees" expenditures totaled 8.75 billion, a year-on-year increase of 6.7%, outpacing the growth rate of general public budget expenditures [2] Debt Management - Jiaozuo issued four batches of replacement bonds totaling 3.582 billion and 616 million in special bonds to enhance government fund capacity [2]

Core Insights - Many provinces in China are accelerating investment in key projects to stabilize economic growth, with significant progress reported in the first five months of the year [1][6] - Sichuan province has completed over half of its annual investment target for key projects by investing 403.69 billion yuan in 810 projects [1][2] - Other provinces such as Xinjiang, Jiangsu, and Anhui are also reporting similar advancements in their key project investments, indicating a nationwide trend [3][4][5] Investment Progress - Sichuan's 810 key projects include 532 ongoing and 278 new projects, with an expected total investment of 791.65 billion yuan by 2025 [2] - In the first five months, Sichuan's infrastructure projects saw an investment of 166.6 billion yuan, while industrial projects received 214.9 billion yuan, achieving completion rates of 47.8% and 53.3% respectively [2] - Xinjiang's fixed asset investment grew by 16.2% year-on-year, with major projects showing an 18.8% increase in investment [3] Project Management and Support - The rapid progress in key projects is attributed to timely funding, strong government oversight, and effective pre-project preparations [5] - Local governments have established mechanisms to prioritize resource allocation for key projects, ensuring smoother approvals and support [5][6] - The central government is also increasing fiscal support, with plans to issue 1.3 trillion yuan in special bonds for major strategic projects [6]