---
title: "Guosheng Securities: The \"14th Five-Year Plan\" is about to be released. What investment opportunities might there be in the construction sector?"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/261768511.md"
description: "Guosheng Securities released a research report indicating that with the upcoming \"14th Five-Year Plan,\" there are three major investment opportunities in the construction sector: 1) Focus on urban renewal and high-quality construction, with an expected increase in the penetration rate of prefabricated buildings; 2) New infrastructure directions include low-altitude economy, energy, and computing power infrastructure; 3) With policy support, construction in the western regions will accelerate, especially in strategic areas such as Xinjiang and Tibet. The construction industry is entering an era of stock, and the future will focus on the stock market and high-quality construction"
datetime: "2025-10-19T11:32:04.000Z"
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  - [zh-CN](https://longbridge.com/zh-CN/news/261768511.md)
  - [en](https://longbridge.com/en/news/261768511.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/261768511.md)
generator: "portal-rs"
---

# Guosheng Securities: The "14th Five-Year Plan" is about to be released. What investment opportunities might there be in the construction sector?

According to the Zhitong Finance APP, Guosheng Securities released a research report stating that the "14th Five-Year Plan" is about to be introduced, and the construction sector can focus on three major areas of investment opportunities: the industry is entering a stock era, urban renewal and high-quality construction demand are expected to continue to grow, among which the penetration rate of prefabricated buildings is expected to continue to rise, and the existing housing market is expected to welcome a peak in inspections; in the new infrastructure direction, attention should be paid to the low-altitude economy, energy, and computing power infrastructure; with policy support, construction in the western region is expected to accelerate, focusing on strategic hinterlands, Xinjiang, Tibet, and other regions.

## The main viewpoints of Guosheng Securities are as follows:

**Direction One: The industry is entering a stock era, focusing on urban renewal and high-quality construction**

By the end of 2024, China's urbanization rate will reach 67%, and urbanization will enter the mid-to-late development stage (generally considered to be the rapid development range of 30%-70%); China's construction industry is entering a stock era. The bank expects that against this backdrop, overall investment in the construction industry will slow down, and urban development will shift from "extensive expansion" to "intensive development." In the future, the development of the construction industry is expected to focus on the stock market, driving urban renewal, infrastructure operation and maintenance, inspection and testing, and other fields into a golden era of development; on the other hand, it will focus on high-quality construction to meet people's demands for green, low-carbon, and smart living buildings, driving the continuous rise of industrialization, greening, and intelligence in construction.

**Prefabricated buildings: The long-term development trend remains unchanged, with steel structures expected to show high prosperity.** Prefabricated buildings are a long-term development trend in the construction industry, based on the gradual disappearance of China's construction labor dividend and the unsustainability of the traditional extensive construction model under the "dual carbon" development requirements. In terms of labor, in 2024, there will be 29.973 million migrant workers nationwide, with construction migrant workers accounting for 14.3%, a decrease of 1.1 percentage points from the previous year, with the number of construction migrant workers at 4.286 million, a continuous decline for three years, significantly reduced by 12.72 million compared to 2021; the average monthly salary of construction migrant workers in 2024 will be 5,743 yuan, with wages continuing to rise, up 26% compared to 2019. In terms of environmental protection, China's construction industry has long developed in an extensive manner, pursuing high economic growth while ignoring its impact on society and the natural environment. Data from the China Building Energy Efficiency Association shows that the total energy consumption of the entire construction process in China accounts for 45.5% of the national energy consumption, and the total carbon emissions from the entire construction process account for 50.9% of the national carbon emissions (2020 data), indicating a huge space for energy conservation and emission reduction in construction. Prefabricated buildings can significantly reduce the demand for construction labor, improve the quality of building construction, reduce carbon emissions and energy consumption, and can also deeply integrate distributed renewable energy and smart building systems, achieving a green transformation in construction. Therefore, during the "14th Five-Year Plan" period, China is expected to continue to promote the development of prefabricated buildings (previously planned goals are a domestic penetration rate of 30% for prefabricated buildings by 2025 and 40% by 2030). Among them, steel structure buildings are easier to achieve a high assembly rate compared to precast PC structure buildings, have higher green and low-carbon attributes, and can be more conveniently integrated with distributed renewable energy and smart building systems, so the proportion of steel structure buildings is expected to continue to rise. Key recommendations include the steel structure engineering leader **Jinggong Steel Structure** (a leader in steel structure exports with outstanding high dividend potential) and the steel structure manufacturing leader **Honglu Steel Structure** **Inspection and Testing: Existing Building Area Continues to Rise, Stock Housing Expected to Welcome Testing Peak.** In recent years, the existing building area in China has continued to rise (the bank estimates that by the end of 2024, the urban housing area will be approximately 38.4 billion square meters), and the completion area has significantly increased during the real estate upturn from 2009 to 2019. Considering the housing testing cycle is about 10-20 years, it is expected that stock housing is about to enter a testing peak (according to the seventh national census statistics, the proportion of houses built before 1990/1990-1999/2000-2009/2010-2020 is 11%/20%/32%/37%, with a weighted average house age of 20 years). In 2023, the Ministry of Housing and Urban-Rural Development has repeatedly stated to "explore the housing pension system," with the core purpose centered around "improving housing safety management." In August 2024, the Deputy Minister of Housing and Urban-Rural Development stated at a press conference that they would study the establishment of three systems: housing physical examination, housing pension, and housing insurance. By August 2025, several cities, including Shenzhen, Qingdao, Chengdu, and Shenyang, have issued policies for regular housing physical examinations. As the proportion of older residential buildings increases year by year, the demand for stock housing testing is expected to continue to grow. Assuming that regular housing physical examination policies are implemented nationwide, the bank estimates that the testing demand in the national stock housing market will exceed 20 billion yuan, recommending a focus on leading housing testing companies **Guojian Group, Lianjian Technology, Shanghai JianKe**; and third-party engineering quality assessment leader **Shenzhen Ruijie** (which has participated multiple times in national self-built housing safety special inspections and established IDI-TIS business cooperation with several leading property insurance companies such as PICC and Ping An).

**Direction Two: The New Era Requires New Infrastructure, Focus on Low-altitude Economy, Energy, and Computing Power Infrastructure.**

**Low-altitude Economy: Policy Support Intensifies, Front-end Infrastructure Demand Expected to Rapidly Expand.** Since the "low-altitude economy" was first included in the government work report in 2024, industry support policies have been intensively introduced, with infrastructure (low-altitude digital systems, airspace route construction, take-off and landing point construction, etc.) serving as the foundation for industrial scale development, and demand is expected to expand first. According to estimates by the Civil Aviation Administration, the scale of China's low-altitude economy is expected to grow to 2 trillion yuan by 2030, with a corresponding low-altitude infrastructure market size of approximately 300-400 billion yuan based on a fixed asset investment ratio of 15%-20%. In December 2024, the State Council issued the "Opinions on Optimizing and Improving the Management Mechanism of Local Government Special Bonds," clearly including low-altitude economy-related infrastructure in the special bond capital "positive list," alongside emerging industries such as digital economy, quantum technology, and commercial aerospace. Currently, several provinces and cities, including Guangdong, Shandong, Anhui, and Sichuan, have issued special bonds related to low-altitude industrial parks, which are expected to provide funding support for large low-altitude infrastructure projects. In April this year, the Political Bureau of the Central Committee proposed the establishment of new policy-based financial tools. From recent work meetings in various regions, the funding amount for this round may be 500 billion yuan, mainly directed towards digital economy, artificial intelligence, low-altitude economy, etc., which is expected to further unblock funding bottlenecks and accelerate the low-altitude infrastructure process. Key recommendations include leading low-altitude planning and design company **Shencheng Jiao** (deeply involved in Shenzhen's low-altitude industry construction, jointly releasing the first low-altitude comprehensive management platform SILAS); and attention to local state-owned low-altitude construction platforms **Soochow Science and Technology, Design General Institute, Tunnel Co.** and others **Computing Power and Semiconductor-Related Engineering: The Computing Power Wave Drives Capacity Expansion, CAPEX Welcomes a New Growth Cycle.** Benefiting from the development of AI, global demand for computing power continues to grow significantly, with accelerated expansion in markets such as AI chips, storage, and advanced packaging. According to TSMC's guidance, the company's AI business is expected to double further on a high base by 2025, with an anticipated compound annual growth rate of about 40% over the next five years, expected to become the core driving force for growth in the semiconductor market. From a capacity planning perspective, TSMC's CAPEX guidance for 2025 has been significantly raised by 28%-41%, while leading companies like SMIC and Hua Hong Semiconductor maintain high CAPEX levels. The three major manufacturers, SK Hynix, Samsung, and Micron, are accelerating the expansion of HBM (the mainstream storage chip for AI servers), with the industry's total capital expenditure expected to reach $160 billion for the year, a 3% year-on-year increase. In the medium to long term: The mainland market is expected to benefit from domestic substitution, with leading companies' capital expenditures expected to continue to expand. In overseas regions, Southeast Asia is accelerating the transfer of semiconductor capacity due to cost advantages; the United States is providing subsidies and low-interest loans to leading companies like TSMC to support local capacity construction, resulting in strong regional engineering demand. Clean rooms, as an important infrastructure to ensure semiconductor yield and safety, are expected to see continued growth. The bank estimates that global/China's semiconductor clean room investment will be approximately $168 billion/$50.4 billion by 2025, accounting for about 15% of the industry's total capital expenditure. It is recommended to focus on high-quality semiconductor clean room leaders **Yaxiang Integration** (98% in the electronics industry), **Shenghui Integration** (67% in IC semiconductors), and **Bocheng Co., Ltd.** (72% in IC semiconductors).

**Energy: Controlled Nuclear Fusion Continues to Make Positive Progress, "14th Five-Year Plan" Technology Expected to Accelerate Implementation.** Since the beginning of this year, China has continued to make positive progress in controlled nuclear fusion. In January, the all-superconducting Tokamak device (EAST) achieved stable long-pulse high-confinement mode plasma operation at 100 million degrees for 1066 seconds; in March, the China National Nuclear Corporation's Southwest Institute of Physics achieved a nuclear temperature of 117 million degrees and an electron temperature of 160 million degrees for the first time in the country with the new generation artificial sun "China Circulation No. 3," with a significant leap in the comprehensive parameter fusion triple product; in July, China Fusion Energy Co., Ltd. was officially established in Shanghai; in October, key breakthroughs were made in the construction of the compact fusion energy experimental device (BEST) project. Currently, China's controlled nuclear fusion industry has clear policy signals, accelerated device construction, and frequent technological breakthroughs, and it is expected to accelerate implementation during the "14th Five-Year Plan." It is recommended to focus on **China Nuclear Engineering**, the main force in China's nuclear power engineering construction.

**Direction Three: Key Regions Supported by Policies, Focus on Strategic Hinterlands, Xinjiang, Tibet, and Other Areas**

**National Strategic Hinterland: A New Round of Productivity and Regional Economic Layout Adjustment, "14th Five-Year Plan" Expected to Accelerate Promotion.** In July 2023, the top management pointed out during an inspection in Sichuan that "Sichuan is the strategic hinterland of China's development, holding a unique and important position in the national development landscape, especially in implementing the Western Development Strategy"; in December 2023, the Central Economic Work Conference proposed for the first time to "optimize the layout of major productivity and strengthen the construction of the national strategic hinterland"; in January 2024, the State Council's approval of the "Sichuan Province Land and Space Planning (2021-2035)" clearly stated that "Sichuan Province is located in the upper reaches of the Yangtze River and the southwestern inland, and is the strategic hinterland of China's development, It is an important area supporting the implementation of national strategies such as the new era of western development and the development of the Yangtze River Economic Belt; the Third Plenary Session of the 20th Central Committee of the Communist Party of China in July 2024 once again emphasized "building a national strategic hinterland and backup for key industries." A series of policies indicate that China is accelerating the construction of a national strategic hinterland. The national strategic hinterland refers to non-core areas that play a supporting role in achieving national strategic goals. Since the founding of the country, China has implemented various national defense security or regional coordinated development strategies such as the Third Front Construction, Western Development, Central Rise, and Northeast Revitalization under specific periods and environments. Currently, against the backdrop of Trump 2.0, global economic risks are increasing, and uncertainties in international political and military conflicts are rising. Building a national strategic hinterland is a new round of adjustments to productivity and regional economic layout formulated by China in response to domestic and international situations and based on internal and external conditions. Its main significance lies in: 1) resisting external shocks and maintaining national security; 2) further tapping into the advantages of population and resources in the hinterland, improving the domestic economic circulation puzzle; 3) balancing regional economic development patterns and narrowing the gap in living standards among residents in different regions. The urgency of constructing the national strategic hinterland has significantly increased, and it is expected that top-level design plans related to the strategic hinterland will be introduced subsequently, with comprehensive key support expected from policies, funds, etc., which will greatly boost economic and investment growth in related regions. Among them, Sichuan Province has been clearly defined as a national strategic hinterland province, with a core recommendation for the southwestern transportation infrastructure leader **Sichuan Road and Bridge**.

**Xinjiang Sector: Continuous strong support from the central government, with transportation infrastructure and coal chemical industry expected to continue showing high prosperity.** In recent years, Xinjiang's GDP growth rate, fixed asset investment growth rate, central government transfer payment growth rate to Xinjiang, and fiscal expenditure growth rate have all exceeded the national average level, indicating that the series of support policies from the central government have significantly expanded Xinjiang's fiscal expenditure, accelerated fixed asset investment, and boosted economic growth. Looking ahead to the 14th Five-Year Plan: In terms of transportation infrastructure, Xinjiang's transportation network has implemented a medium- and long-term strategic layout of "four horizontal, four vertical, four rings, and fifteen connections," and Xinjiang plans to achieve the goal of "connecting every county" with expressways (first-level roads) and focus on filling the "gaps" in western railways, providing broad medium- and long-term construction space for transportation infrastructure. In the coal chemical industry, under the national energy security demand and combined with Xinjiang's natural resource endowment, there is enormous potential for developing the coal chemical industry in Xinjiang. According to incomplete statistics based on public information, as of June 2025, the total investment in coal chemical projects under construction and planned in Xinjiang exceeds 800 billion yuan. It is estimated that the annual investment from 2025 to 2027 will be approximately 997/2077/2326 billion yuan, with a large-scale EPC bidding expected to start in 2025, and project construction is expected to significantly accelerate starting in 2026, leading to a rapid conversion of revenue and profits for engineering companies. Key attention should be paid to local infrastructure leaders in Xinjiang benefiting from the accelerated implementation of large-scale transportation infrastructure, such as **Xinjiang Communications Construction** and **Beixin Road and Bridge**, as well as the local civil explosives leader **Xuefeng Technology**; and chemical EPC leaders **China Chemical, Donghua Technology, Sanwei Chemical, Aerospace Engineering**, etc.

**Investment Suggestions**

The 14th Five-Year Plan is about to be released, and the construction sector can focus on investment opportunities in three major areas:

1.  The industry is entering a stock era, with urban renewal and high-quality construction demand expected to continue growing. The penetration rate of prefabricated buildings is expected to rise, and the existing housing market is likely to see a peak in inspections. Key recommendations include leading steel structure engineering company Jinggong Steel Structure (25PE 14X) and leading steel structure manufacturer Honglu Steel Structure (25PE 21X). Attention should also be paid to leading housing inspection companies Guojian Group (25PE 23X), Lianjian Technology (25PE 43X), and Shanghai JianKe (25PE 21X), as well as third-party engineering quality assessment leader Shenzhen Ruijie.

2.  In the new infrastructure direction, key recommendations and attention should be given to low-altitude planning and design leader Shenzhen Urban Transport, local state-owned low-altitude construction platform Sujiao Science and Technology, Design Institute (25PE 9X), Tunnel Co. (25PE 7X), etc.; semiconductor cleanroom leaders Yaxiang Integrated (25PE 16X), Shenghui Integrated (25PE 32X), and Bocheng Co. (25PE 30X); and the main force in nuclear power engineering construction, China Nuclear Engineering (25PE 14X).

3.  With policy support, construction in the western region is expected to accelerate. Key recommendations and attention should be given to the southwestern transportation infrastructure leader Sichuan Road and Bridge (25PE 9X), benefiting from national strategic hinterland construction; as well as Xinjiang infrastructure leaders Xinjiang Jiaojian (25PE 33X), Beixin Road and Bridge, and Xinjiang civil explosives leader Xuefeng Technology (25PE 16X), chemical EPC leader China Chemical (25PE 7X), Donghua Technology (25PE 18X), Sanwei Chemical (25PE 17X), and Aerospace Engineering, etc.

**Risk Warning**: Policy releases may fall short of expectations, the development of various sub-sectors may not meet expectations, and there are risks of impairment, etc

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**