GF Securities: Reiterates that the main line of common wealth investment in the construction industry attaches importance to infrastructure and other engineering service targets in relevant provinces and regions

The Zhitong Finance App learned that GF Securities released a research report stating that it once again attaches full importance to the main line of investment for common prosperity proposed in the 2025 Mid-Term Strategy Report, attaches importance to investment opportunities in the main battlefields of western development in the new era, such as Xinjiang, Tibet, Sichuan and Chongqing, and fully attaches full importance to engineering service targets such as infrastructure, coal chemicals, mining services, and civilian explosions in relevant provinces and regions. Infrastructure sector: Domestic railway and highway investment has maintained a high intensity, and the implementation of major projects such as the Xinjiang-Tibet Railway (Xinjiang section), the Yining-Aksu Railway, and the Doku Expressway has catalyzed an increase in the boom. Coal chemical industry: Xinjiang coal chemical catalysis. Explosion of mining services: excellent resource endowments and accelerated concession transactions.

The main views of GF Securities are as follows:

railroad

The Xinjiang Railway has broad investment space, and the establishment of the Xinzang Railway Group has catalyzed an increase in the investment boom. The Xinjiang Railway has sufficient reserves for long-term projects. During the “15th Five-Year Plan” period, Xinjiang has planned 2,767 kilometers of railway projects, with a total investment of 157.3 billion yuan. In terms of the execution of major projects, major projects such as the Xinzang Railway (Xinjiang section) (462.6 km, bridge-tunnel ratio of 61.53%, registered capital of 95 billion yuan) and the Yining-Aksu Railway (464.9 km built, total investment 381-38.9 billion yuan) all started or one after another during the year. Local state-owned enterprises such as Xinjiang Communications Construction, Beixin Road and Bridge, as well as China Railway Construction and China Railway represented central enterprises or fully benefited.

highways

Highway investment in Xinjiang has increased steadily, and major projects such as the Doku Expressway have contributed flexibly. Highway investment in the country remains high. According to the Xinjiang Transportation Work Conference, it is planned to invest 80 billion yuan in highways in 2025, +13.5% over the same period last year. Looking at the execution of major projects, the G3033 Doku Expressway (total investment of about 100 billion yuan, 460 kilometers, bridge-tunnel ratio > 50%) is scheduled to start construction by the end of 2025, with Xinjiang Trading Co., Ltd. Wholly owned by Xinjiang Trading Co., Ltd., taking the lead investment. Xinjiang Communications Construction is a construction platform under Xinjiang Trading Co., Ltd., and Beixin Road and Bridge, as a regional local state-owned enterprise, are all expected to gain order flexibility from it.

Coal chemicals

The coal chemical industry is expanding at an accelerated pace, focusing on recommending China Chemical, which has a low valuation and a high market share. In 2024, Xinjiang's raw coal production was 541 million tons, an increase of 17.5% over the previous year. In terms of application areas, in 2024, Xinjiang will consume 195 million tons of coal for thermal power generation, accounting for about 36% of Xinjiang's annual coal production, ranking first; the coal chemical sector consumes 90 million tons of coal, accounting for 17% of annual production. The coal chemical industry is the main growth pole for the Xinjiang economy.

Mining development & mining service bombing

Concession transactions are speeding up, resource development is in full swing, and the mining services sector is rising. Under resource safety guidelines, exploration and development of resources in Xinjiang was accelerated, and 6 large-scale resource bases were added during the “14th Five-Year Plan” period. 25M4's “Notice on Supporting the Carrying out of Strategic Mineral Surveys” encourages geological exploration units, mining companies, etc. to raise their own funds to carry out 1:50,000 strategic mineral geological surveys, preferential investigation and evaluation of exploration blocks, and oil and gas resources surveys. From 2022 to 2024, the number of mining rights sold in Xinjiang was 146, 227 and 558, respectively, ranking first in the country for three consecutive years.

Risk warning: macroeconomic cycles fluctuate, domestic investment intensity falls short of expectations, and order execution falls short of expectations.