Core Viewpoint - The completion of the Three Gorges New Channel will significantly enhance logistics in the upper, middle, and lower reaches of the Yangtze River, facilitating smoother water transport and greater demand, thereby benefiting the development of the Yangtze River Economic Belt [1][3]. Group 1: Project Overview - The National Development and Reform Commission (NDRC) has approved the feasibility study report for the Three Gorges Waterway New Channel project, which is set to commence construction within this year [1][2]. - The project represents the largest comprehensive engineering plan on the Yangtze River, integrating water conservancy, navigation, and ecological functions, with a static total investment of approximately 766 billion yuan and a total construction period of 100 months (excluding a 12-month preparatory period) [2][3]. Group 2: Strategic Importance - The Three Gorges New Channel is crucial for addressing navigation bottlenecks at the Three Gorges and Gezhouba hubs, thereby enhancing the overall connectivity of various transportation modes along the Yangtze River [3][7]. - The project is expected to promote economic and social development in the regions along the Yangtze River, aligning with the strategic goals of the Yangtze River Economic Belt [2][3]. Group 3: Economic Impact - The new channel will facilitate smoother logistics connections between upstream regions (such as Chongqing, Sichuan, Yunnan, and Guizhou) and downstream areas, as well as coastal regions and international markets, ultimately reducing logistics costs and improving efficiency [3][7]. - The construction of the new channel is anticipated to significantly enhance the logistics capacity and demand in the Yangtze River Economic Belt, which accounts for nearly half of the national economic output [7]. Group 4: Historical Context - The Three Gorges Ship Lock has seen a substantial increase in traffic since its opening in June 2003, with cumulative freight volume surpassing 2.2 billion tons by March 2025, indicating a saturation of its current capacity [4][5]. - The need for the new channel has been underscored by the increasing operational load on the Three Gorges Ship Lock, which has faced congestion issues due to rising shipping volumes over the past decade [5][6].

Investment Rating - Investment rating: Positive (maintained) [5] Core Viewpoints - The Three Gorges Waterway New Channel project has officially started its survey and design bidding, marking the substantial advancement of engineering construction. The total investment for the project is approximately 76.6 billion, with a construction period of about 100 months [6][12] - The overall water conservancy investment continues to show high prosperity. In 2024, national water conservancy construction investment reached 1,352.9 billion, a year-on-year increase of 12.8%, setting a historical high [7][14] - The construction of the new channel and the expansion of the Gezhouba shipping capacity are expected to significantly boost demand for construction, blasting, and high-grade cement materials, benefiting companies with professional capabilities and supply advantages in the region [6][12] Summary by Sections Industry Investment Rating - The report maintains a positive investment rating for the construction decoration industry, indicating a favorable outlook for the sector [5] Key Investment Points - The Three Gorges Waterway New Channel project, with a total investment of approximately 76.6 billion, is set to enhance the shipping capacity of the Yangtze River and stimulate demand across related industries [6][12] - Water conservancy investment is expected to continue its upward trend, with significant government support and funding for major projects [7][14] Market Performance - The construction decoration index increased by 1.25% during the week, with all sub-sectors except steel structure showing gains. Notable performers included chemical engineering and other specialized engineering sectors [9][25] - The report suggests focusing on structural allocation opportunities within the construction sector, particularly in companies benefiting from regional infrastructure investments and state-owned enterprise reforms [9] Company Recommendations - The report recommends several companies based on three main lines: regional construction, state-owned enterprise valuation recovery, and transformation and upgrading opportunities [9]

Investment Rating - Industry rating is maintained at "Outperform the Market" [4] Core Viewpoints - The construction sector has shown a positive performance with a 1.33% increase, outperforming the CSI 300 by 0.36 percentage points. The focus on infrastructure investment in the central and western regions has significantly increased, with major projects and events expected to catalyze growth [1][3] - Continuous recommendations are made to focus on infrastructure investment opportunities in the central and western regions, particularly in construction, cement, and civil explosives, as well as key industries like coal chemical and nuclear power [1][2] Summary by Sections Major Projects and Catalysts in Central and Western Infrastructure - Significant projects include the Three Gorges Waterway New Channel with an investment of approximately 76.6 billion yuan and a total construction period of 100 months. Key beneficiaries include Yipuli and Kailong Co. [12][21] - The Zhejiang-Jiangxi-Guangdong Canal project is estimated to require 320 billion yuan and is expected to start construction during the 14th Five-Year Plan period, with key beneficiaries being Huase Group and Guotai Group [13][21] - In Tibet, the opening of the Yarlung Tsangpo River downstream hydropower project is anticipated, with an estimated investment exceeding 1 trillion yuan and a planned capacity of 60 million kilowatts [19][21] - The Xinjiang region is seeing the commencement of the China-Kyrgyzstan-Uzbekistan Railway, with a total cost of 8 billion USD, which is expected to catalyze related investments [20][21] Market Review - The construction index increased by 1.33% during the week, with the building design and service sectors showing strong performance, achieving gains of 2.09% and 1.34% respectively [3][23] Investment Recommendations - Emphasis on cyclical opportunities arising from improvements in infrastructure physical volume, with a focus on traditional construction blue-chip stocks and regional high-growth companies [24][28] - Recommendations include companies like Sichuan Road and Bridge, China Communications Construction, and China Railway Construction, which are expected to benefit from ongoing infrastructure projects [28] - Attention is drawn to emerging business directions and the transformation of the construction sector, particularly in AI and cleanroom sectors, with specific companies recommended for investment [29][30]