Group 1 - Morgan Stanley forecasts weak performance for major engineering and construction companies in mainland China in Q2 2025, with this trend likely to continue into the second half of the year [1] - The firm has lowered net profit forecasts for China Railway and China State Construction by 18% to 30% for 2025 to 2026 [1] - China Railway's H-share rating has been downgraded from "Overweight" to "Market Perform," with the target price reduced from HKD 5.6 to HKD 4.6; the A-share rating remains "Market Perform," with the target price lowered from CNY 7 to CNY 5.8 [1] - China State Construction's rating has been downgraded from "Overweight" to "Underweight," with the target price reduced from HKD 6.5 to HKD 4.7 [1] Group 2 - Morgan Stanley remains more optimistic about China Railway's H-shares compared to China State Construction due to its higher exposure in the infrastructure sector, which is expected to benefit more significantly if stimulus policies are introduced [1]

Core Viewpoint - MasTec is expected to show strong growth across all business segments from 2026 to 2028, with both short-term and long-term positive catalysts emerging following the strong Q2 2025 results and raised guidance for 2025 [1] Financial Performance - MasTec reported Q2 2025 revenue of $3.545 billion, a year-over-year increase of 19.7% from $2.961 billion [2][4] - Adjusted net income for Q2 2025 was $122 million, up 37.4% from $88 million in Q2 2024, with adjusted earnings per share at $1.49, reflecting a 49% increase [2][4] - The company raised its full-year 2025 revenue guidance to $13.9 billion - $14 billion, up from the previous estimate of $13.65 billion [2] Business Segment Insights - The midstream natural gas business is expected to recover over the next few years, with MasTec actively bidding on large projects and a strong bidding pipeline [5] - The communications sector is experiencing double-digit growth, driven by increasing demand for data centers, maintaining double-digit profit margins [5] - Utility capital expenditures are driving growth in the electric transmission business, with MasTec positioned competitively for high-voltage projects [5] - Despite uncertainties from the "Inflation Reduction Act" and presidential executive orders, MasTec remains optimistic about renewable energy demand, with a record backlog of $4.9 billion as of June [6] Future Projections - Jefferies has raised its earnings expectations for MasTec, projecting 2026 revenue of $15.4 billion and earnings per share of $8.08 [6] - The company is expected to achieve a compound annual growth rate of 9.9% in revenue and 14% in EBITDA from 2026 to 2028, with a 29% compound annual growth rate in earnings per share during the same period [6]