CITIC Construction Investment: Seize the opportunities of the new cycle of building decoration and focus on new models and new directions
The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that investment opportunities in the construction industry in 2027 lie in policy support and changes in the demand structure. In the new cycle, a stable investment policy will improve project funding conditions, and the “six networks” construction will clarify investment priorities, and push project demand to be concentrated on backbone networks, new facilities, and inventory updates. The transition from commercial housing to existing housing sales makes repayment more closely linked to completion and delivery. Shortening the construction period can reduce capital consumption, and industrial construction is thus more economically driven. Meanwhile, investment in energy and AI-related industries continues to advance, providing incremental demand for professional engineering. It is recommended to seize policy opportunities for key infrastructure and focus on growth opportunities brought about by improved construction efficiency and industrial production expansion.
CITIC Construction Investment's main views are as follows:
Stable investment policies are being actively promoted, and major projects and “six networks” construction drive demand
The valuation level of the construction sector has reached a low level, and PB is in the 0.7% position since 2014. Fixed asset investment increased 0.1% month-on-month in September. The year-on-year growth rate in the previous 9 months was the same as in the previous 8 months. The investment growth rate stabilized marginally, and policy financial instruments and special debt amounts were revitalized and increased the sources of project funding. The “15th Five-Year Plan” plans to deploy 109 major projects. The construction of the “six networks”, including water grids, new power grids, computing power networks, next-generation communication networks, urban underground pipelines, and logistics networks, is progressing comprehensively, and the focus of infrastructure is shifting to key projects and improving stock quality and efficiency.
Under the new real estate policy, construction period value has increased, and steel structures and prefabricated decoration have ushered in application opportunities
There was an orderly transition from commercial housing sales to existing housing sales, and the issuance of mortgages for pre-sale projects subject to the new regulations was postponed until after completion and filing, and the construction period directly affected the use of development funds. Based on an example of sales of 1 billion yuan, a mortgage ratio of 70%, and capital cost of 4%, a one-year deferral of capital costs increased by 28 million yuan. Steel structures and MiC rely on factory production and on-site construction in parallel to shorten the construction cycle. Prefabricated decoration combines the need for speeding up delivery and inventory renewal, and the economic benefits of industrial construction have been further demonstrated.
Coal chemical, offshore, nuclear power and clean engineering remain booming
High oil prices enhance the relative competitiveness of coal chemicals and the appeal of deep-water oil and gas development, and demand for plant construction and FPSO modules is supported. Nuclear power projects are continuously approved, and the units under construction form a continuous engineering workload. AI-related chip manufacturing and advanced packaging production expansion increased demand for clean rooms, HVAC and process pipelines. Investment in the integrated circuit manufacturing industry increased 14.2% year-on-year in the first three quarters of 2026, and on-hand orders from related professional engineering companies increased, providing support for subsequent business development.
It is recommended to focus on key areas supported by stable investment policies, as well as investment opportunities brought about by improved construction efficiency and industrial production expansion
In terms of major projects and “Liuzhang Network” construction, water and power projects benefit from backbone networks and energy support construction. It is recommended to focus on enterprises such as China Railway and China Energy Construction, while urban renewal proposals focus on enterprises such as China Construction, China Communications Construction, and Tunnel Co., Ltd. Industrial construction and prefabricated decoration focus on enterprises such as Honglu Steel, Seiko Steel, and China Metallurgical. In the field of professional engineering, coal chemicals and nuclear power construction are recommended to focus on companies such as Chinese chemical and Chinese nuclear construction, and it is recommended to focus on the marine engineering and clean room engineering sectors.
risk analysis
1. Construction progress is greatly affected by funding availability, natural conditions, etc., and delays may occur, which in turn affect revenue recognition; overseas project construction progress is also affected by the local political and safety environment. 2. The continued downturn in the real estate market may adversely affect construction companies in many ways. 3. The expansion of the new energy business may fall short of expectations. Some traditional construction companies are deploying new fields such as new energy consulting, engineering, and operation, and there may be a risk that expansion will fail.