Stock market concept tracking | New round of rural road improvement action plan issued, infrastructure stocks are expected to continue to strengthen (with concept stocks)

On August 6, the Ministry of Transport, Ministry of Finance, and Ministry of Natural Resources issued the "Action Plan for the Upgrade of Rural Roads in a New Round". By 2027, a total of 300,000 kilometers of new and reconstructed rural roads will be completed nationwide, and a convenient, efficient, and equitable rural road network will be basically established. Maintenance projects will cover 300,000 kilometers, with the road conditions of over 70% being excellent. Additionally, safety and life protection projects will cover 150,000 kilometers, 9,000 old and dangerous bridges (including life passage bridges and flood bridges) will be renovated, further enhancing the safety and service guarantee capacity of rural roads. The rate of rural villages with access to public transportation will reach over 55%. Related concept stocks include CHINA COMM CONS (01800), China Railway (00390), and China Railway Construction Corporation (01186). In the first half of 2025, national infrastructure investment showed a trend of "blossoming in multiple areas", continuously providing momentum for economic development. The average construction rate of construction machinery nationwide was 44.81%. The construction rate for the second quarter was 47.1%, an increase of 4.62% compared to the first quarter. The average construction rate of 15 provinces exceeded 50%. Among them, Anhui, Fujian, Henan, Jiangxi, Zhejiang, and Chongqing have had a comprehensive construction rate of over 50% for six consecutive months. This indicates that infrastructure investment nationwide is showing a trend of "blossoming in multiple areas", especially in the eastern and southern regions. According to the statistics bureau, in the first half of 2025, narrow/gross infrastructure investment increased by 4.60%/8.90% respectively year-on-year, with a month-on-month decrease of -1.00%/1.52% for May and an increase of 1.96%/5.32% for June, with a month-on-month decrease of -3.10%/-3.94% for May respectively. Guotai Fund stated that looking ahead to the second half of the year, incremental fiscal policy support and improved financing will gradually show effects on investment and physical quantity. At the same time, the expectation of increased domestic demand will strengthen, and there is potential for policy enhancement in infrastructure investments and key regional construction. Caitong released a research report stating that current investments in resilient cities and urban village transformations are expected to increase. Strategic layout in the central and western regions is more prosperous, combined with the strengthening of long-term assessment systems for insurance funds, the fundamental strength of building high-dividend stocks will continue to be highlighted. The report suggests focusing on undervalued high-dividend central state-owned enterprises and paying attention to targets benefiting from the development of coal chemical projects in Xinjiang. Enterprises with core competitiveness are also expected to stand out from the bottom of the cycle. Tianfeng believes that the investment theme of infrastructure improvement and value enhancement of low-priced stocks will continue. The previous easing measures by the China Securities Regulatory Commission for low-priced stocks, coupled with the improvement of corporate financial statements by debt-to-equity funds, will continue to support the long-term fundamentals and valuation recovery of construction companies. Related concept stocks: CHINA COMM CONS (01800): In the first quarter of 2025, CHINA COMM CONS reported an operating revenue of 154.644 billion yuan, a decrease of 12.58% year-on-year; a net profit attributed to shareholders of the listed company was 5.467 billion yuan, a decrease of 10.98% year-on-year; and a basic earnings per share of 0.32 yuan. The company's main operating indicators remained stable under the dual pressures of industry conditions and economic cycles during the reporting period. The overseas business showed strong resilience, and the domestic business in major cities developed steadily, while the traditional major transportation pillar business came under pressure but maintained a leading position in the construction industry. The group signed new contracts worth 553.034 billion yuan, a year-on-year increase of 9.02%. China Railway (00390): China Railway is a leading player in transportation infrastructure, being a mega-enterprise group that integrates surveying and design, construction and installation, industrial manufacturing, real estate development, resource mining, financial investment, and other businesses. China Railway Construction Corporation (01186): BOC International released a research report stating that China Railway Construction Corporation, similar to China Railway Group, is facing operational pressure, with a year-on-year decrease of 6.2% in revenue and 14.9% in net profit last year, and a continued decline in the first quarter of this year with revenues and net profits falling by 6.6% and 14.5% respectively, in line with industry cycle performance. The bank predicts that revenue for China Railway Construction Corporation in 2025 will recover by 3% year-on-year, and net profit is expected to increase by 6.1%. The bank maintains a "buy" rating.