[Core Conclusion] China Communications Construction has a stable leading position in the field of transportation infrastructure. It is the world's largest design and construction company for ports, roads and bridges, and the world's largest dredging company. It has significant competitive advantages and is expected to fully benefit from the overall infrastructure prosperity driven by the start of large-scale infrastructure construction in China. Moreover, the company is China's largest international engineering contractor, with a deep internationalization history and outstanding advantages. It has made efforts overseas to provide growth momentum for performance. In addition, the company has issued dividend plans to stabilize investors' dividend expectations. We gave the company an 8 times PE in 2025, with a corresponding target price of 11.78 yuan per share, and a "buy" rating is given for the first time.

Industry level: 1) Overall demand in the construction industry is under pressure, but the new policy of anti-internal circulation PPP is expected to improve the industry environment. In 2024, the total output value of my country's construction industry increased by 3.9% year-on-year, with a growth rate of 1.9pct compared with 2023, and the newly signed contract amount was -5.21% year-on-year, with a decrease of 2.4pct compared with 23 years. 2) Differentiation of subdivided fields: Canal engineering has a high prosperity. Starting from 2024, central and local policies will be released frequently to support the construction of inland water transportation projects. At present, the Jianghuai Canal has been opened for navigation, and the Pinglu Canal is expected to be opened for navigation next year; the "11246" project of Zhejiang-Jiangxi-Guangxi Canal, Hunan-Guangxi Canal, Jinghan Canal and Henan inland shipping is being carried out in an orderly manner, with a total investment of 690 billion yuan. 3) Regional differentiation: The western infrastructure is in a high state of prosperity. On July 19, 2025, the groundbreaking ceremony of the hydropower project in the lower reaches of the Yarlung Zangbo River was held, with a total investment of approximately 1.2 trillion yuan. On August 7, Xintibet Railway Co., Ltd. was established with a registered capital of 95 billion yuan. The total length of the Xintibet Railway is 1,980 kilometers. Referring to the average single-kilometer construction cost of the Sichuan-Tibet Railway throughout the entire journey, the total investment of the project is estimated to be about 388.4 billion yuan, and it is expected to start construction within the year. 4) The prosperity of overseas projects continues: -7. The cumulative newly signed contracts in China's foreign contracting projects amounted to US$149.58 billion, an increase of 11.7% year-on-year, of which the proportion of new signing along the Belt and Road has reached 88.3%.

Company level: 1) The leading position in the transportation field is stable, and the Pinglu Canal is deeply involved in the construction of the Pinglu Canal throughout the process, which is expected to fully benefit from the high prosperity of the canal project. 2) Asia's largest international engineering contracting company adheres to "overseas priority". It has many "the earliest to go global" companies with outstanding international advantages. The company's overseas revenue growth rate in 2023 and 2024 was higher than that in China, and its proportion continued to increase. 3) Revenue and new signs have grown steadily, operating cash flow has improved, and dividends are guaranteed. The company has issued an annual dividend plan for 25-27, with the annual cash dividend ratio not less than 20%, and appropriately increased, and cash dividends shall be implemented at least twice a year.

Risk warning: macroeconomic fluctuation risks, internationalization risks, and investment risks.