The Zhitong Finance App learned that infrastructure stocks generally rose in early trading. As of press release, China Railway (00390) rose 4.33% to HK$4.58; China Metallurgical (01618) rose 2.89% to HK$1.78; China Railway Construction (01186) rose 2.48% to HK$5.79; and China Communications Construction (01800) rose 2.07% to HK$4.92.

According to the news, the country's broad infrastructure investment increased 7.78% year-on-year from January to April 2024, which is higher than the level of fixed asset investment. The growth rate of investment in the water sector and railway transportation segments was impressive. Furthermore, on May 17, the first 40 billion ultra-long-term special treasury bond was issued. SDIC Securities believes that with the gradual commencement of construction of trillion-dollar treasury bonds and ultra-long-term special treasury bond projects, the speeding up review of local government special debt projects are all expected to support the growth of infrastructure investment throughout the year.

The bank is optimistic that the “three major projects” will drive growth in infrastructure and housing investment, drive marginal improvements in new real estate construction and sales, and create an increase in demand for the construction sector. In addition, many leading companies in the construction industry are actively expanding their international layout, and overseas engineering construction is releasing increased market demand. Currently, the fundamentals of the construction industry are stable as a whole. The concentration of central infrastructure enterprises and leading local infrastructure industries continues to increase. Combined with state-owned enterprise reforms, incentives for dividends and market value management, and valuations are expected to increase.