Shenwan Hongyuan: Income and profits of the 25H1 construction and decoration industry are under pressure, and it is expected to see a recovery in corporate income data in the second half of the year.

Shenwan Hongyuan released a research report stating that income and profits are under pressure, but cash flow is improving, maintaining a "positive" rating on the construction and decoration industry. Infrastructure investment in the first half of 2025 still faces certain pressures. Against this background, companies actively reduce their scale, focus on cash collections and cost control. As a result, some large construction companies saw a decrease in revenue compared to the same period last year, but operating cash flow showed an improving trend. Looking ahead, the bank believes that under external environmental pressures, expectations for domestic investment stimulus remain strong. The acceleration of "two heavy" projects represented by central government finance is expected. Companies are also strengthening their own management, streamlining costs. It is expected that in the second half of 2025, corporate income data will show signs of recovery, and cash flow will further improve.