Galaxy Securities: Which sectors in the A-share market will benefit from the Central Urban Work Conference?

Galaxy Securities research report believes that the Central City Work Conference in 2025 clearly states that urban development will shift from expanding increment to improving stock, strengthening connotative development and urban renewal as the main line. This will systematically promote investment expectations in areas involving municipal infrastructure construction, green environmental protection, smart cities, and urban renewal, which will constitute a long-term positive for the relevant sub-industry chains in A shares. Urban renewal, urban villages and the renovation of old and dangerous buildings, and the construction of urban infrastructure lifelines are all comprehensive activities involving multiple industries such as construction, building materials, real estate, transportation, and environmental protection. The first quarter report of 2025 showed that the operating income of industries such as steel, building materials, construction decoration, real estate, and utilities all showed negative year-on-year growth, while the operating income of industries such as household appliances, transportation, and environmental protection showed positive year-on-year growth. In terms of profitability, the ROE of the steel and real estate industries is negative, indicating that they have not achieved profitability; and the ROE of the building materials industry is relatively low. With the development of modern people's cities that are innovative, livable, beautiful, resilient, civilized, and smart, the performance of industries related to urban renewal is expected to significantly improve.