HK Stock Market Move | CHINA LESSO (02128) rose over 7% in early trading, as municipal engineering projects are expected to accelerate, benefiting the company's pipeline construction.

CHINA LESSO (02128) rose more than 7% in early trading, rising 6.53% to 4.73 Hong Kong dollars as of the close, with a turnover of 29.0756 million Hong Kong dollars. On the news front, Zheng Zhijie, Secretary and Director of the Party Group of the National Development and Reform Commission, previously pointed out that during the "14th Five-Year Plan" period, more than 700,000 kilometers of underground pipeline network will be built or renovated, with new investment demand exceeding 5 trillion yuan. Guosheng released a research report stating that under the proactive debt-to-equity policy, government fiscal pressure is expected to be relieved, there is room for repair of corporate balance sheets, municipal engineering projects are expected to accelerate, and the workload of municipal pipelines and anti-seismic physical works is expected to be accelerated. Guotai Haitong released a research report stating that CHINA LESSO's pipeline business sales transition is progressing well, with rapid expansion in non-real estate and non-South China markets. The rapid expansion of non-real estate business and the expansion of markets outside of South China are leading in the agricultural field. The company's pre-existing real estate accounts receivable, when high-risk real estate companies' accounts receivable are fully provisioned at over 75%, make the overall risk of ongoing projects relatively well-managed. The company's current dynamic PE has dropped to around 4x, mainly due to its listing on the Hong Kong stock exchange; moreover, in the current context of underutilized production capacity, the increase in transitioning to new energy by the company also does not significantly increase capex, making operational risks relatively controllable.