Investment Rating - The report maintains an investment rating of "Leading the Market-A" for the construction industry, indicating an expected return that exceeds the CSI 300 index by 10% or more over the next six months [7]. Core Insights - The Ministry of Finance has issued guidelines to standardize the construction and operation of existing Public-Private Partnership (PPP) projects, aiming to enhance project quality and efficiency. Key measures include prioritizing the completion of profitable projects, ensuring timely financing support from financial institutions, and increasing fiscal support for eligible projects [1][13]. - The report highlights that most central state-owned enterprises in the construction sector possess PPP projects, which are expected to accelerate the completion and revenue recognition of ongoing projects in the short term. In the long term, mandatory government payments will significantly improve accounts receivable quality and cash flow for enterprises [2][14]. - The State Council emphasizes the need to consolidate and expand the positive momentum of economic recovery, with a focus on increasing effective investment and promoting private investment. Several high-speed rail projects have been included in the national reserve construction plan, which are crucial for regional development [3][15]. Summary by Sections Industry Dynamics - The issuance of guidelines for PPP projects aims to ensure the smooth construction of ongoing projects and the stable operation of completed ones. Local governments are encouraged to integrate support for PPP projects into incremental policies [1][13][14]. Market Performance - The construction industry saw a weekly increase of 1.61%, with the landscaping engineering sector performing particularly well, rising by 4.82% [16][31]. Key Companies to Watch - The report suggests focusing on leading construction companies such as China Railway, China Communications Construction, and China State Construction, which are expected to benefit from improved operational metrics and valuation enhancement due to government support and market conditions [4][8][9][14]. Valuation Metrics - As of August 22, the construction and decoration industry had a price-to-earnings (P/E) ratio of 11.58 and a price-to-book (P/B) ratio of 0.85, indicating a slight increase from the previous week. The industry ranks 27th in P/E among all sectors, suggesting a relatively low valuation compared to others [21].