Summary of Conference Call on Building Materials Industry Industry Overview - The building materials industry is showing signs of recovery, with significant increases in second-hand housing transaction volumes in early 2026 compared to the same period in 2025, indicating a rebound in market demand [1][3] - The real estate sector's contribution to cement demand has decreased to 18.9%, while the industrial glass sector's share has risen to 41.3%, suggesting a reduced sensitivity of traditional building materials to real estate demand [1][5] Key Points and Arguments - **Market Recovery Indicators**: - Core area housing prices in Beijing, Shanghai, and Shenzhen are recovering despite minimal policy changes, indicating an increased probability of the industry hitting a natural bottom [1][4] - The seasonal effect from March to April, traditionally a peak period for real estate, is expected to further enhance market sentiment [3] - **Supply Chain Dynamics**: - New construction starts have seen a significant decline, surpassing historical levels, leading to a contraction in capital expenditures in the building materials sector [1][8] - The waterproofing sector is experiencing the most severe supply-side clearing, with a high exit rate of companies and significant revenue declines among major players [2][7] - **Future Outlook**: - The building materials sector is at the beginning of a new cycle, with expectations of profitability bottoming out and stabilizing from 2026 onwards [2][12] - The industry has been in a downturn for five years, nearing a bottoming window, with historical data suggesting that real estate downturns typically last 4-7 years [5][8] Additional Important Insights - **Investment Opportunities**: - Focus on leading companies like 东方雨虹 (Dongfang Yuhong) and 科顺股份 (Keshun) for potential recovery opportunities, as well as undervalued stocks like 北新建材 (Beixin Building Materials) [2][11] - The waterproofing sector is highlighted as having the highest probability of recovery due to the severe supply-side clearing [10] - **Sector-Specific Trends**: - The engineering pipeline sector has maintained stable production levels, showing resilience compared to the more volatile waterproofing sector [9] - The waterproofing industry has seen a cumulative revenue decline of approximately 38% since 2021, reflecting significant profitability pressures [8] - **Strategic Recommendations**: - Investors are advised to avoid premature selling, as the cyclical nature of the market suggests that profitability will continue to improve with changing expectations [12]

Group 1: Industry Trends - The pipeline industry is experiencing a "infrastructure-driven, increasing differentiation" trend in bidding participation [1] - Market and policy are driving forces, with large infrastructure projects like national water network construction and urban renewal being key factors [1] - The competitive landscape is increasingly polarized, with leading companies leveraging full industry chain capabilities and brand reputation to dominate major project bids [1] - The bidding threshold has significantly increased, with emphasis on certifications and past project performance as core evaluation factors [1] Group 2: Company Highlights - Guangdong Xiong Plastic Technology Group Co., Ltd. ranked first in the bidding evaluation activity, known for its extensive product range and strong market presence [6] - Hubei Dayang Plastic Co., Ltd. focuses on high polymer plastic pipeline systems and has established itself as a key player in central China [7] - Guangdong Liansu Technology Industrial Co., Ltd. is a leading building materials group with a comprehensive product system and a strong brand influence [8] - Zhejiang Zhongcai Pipeline Technology Co., Ltd. is recognized for its complete product range and participation in national standard formulation [9] - Gu Di Technology Co., Ltd. is a well-known listed company in the plastic pipeline industry, maintaining a strong market position in central and southwestern China [10] - Gongyuan Co., Ltd. is a leading supplier of high-quality plastic pipeline systems, actively participating in national and industry standard formulation [11] - Chongzhou Minjiang Plastic Co., Ltd. has evolved into a significant player in the plastic pipeline industry with a diverse product range [12] - Anyang Steel Group Yongtong Ductile Iron Pipe Co., Ltd. is a prominent manufacturer of ductile iron pipes with a strong focus on quality and innovation [13] - Hubei Kaike Plastic Industry Co., Ltd. specializes in plastic pipeline systems and has established a good brand reputation in central China [14] - Shandong Dongxin Plastic Co., Ltd. is a high-tech enterprise focusing on plastic pipeline systems, known for its stable product performance and regional service network [15]

Core Viewpoint - China Lesso (2128.HK) has seen a significant price increase, reaching a new high since May 2023, driven by positive real estate policies and improving market conditions [1] Company Summary - China Lesso's stock price rose over 6% during trading, peaking at 5.8 HKD, marking a year-to-date increase of approximately 25% [1] - The company is benefiting from an increase in domestic market share, expansion of overseas business, and diversification of product categories, which are starting to show signs of revenue improvement [1] Industry Summary - Huatai Securities has indicated that positive real estate policies are likely to accelerate the stabilization of the real estate market, which is reflected in the stock prices and valuations of building materials companies [1] - The report suggests a balanced investment strategy in the building materials sector, focusing on both traditional cyclical opportunities and emerging technology growth [1]

每经AI快讯，中国联塑(02128.HK)涨超7%。截至发稿，涨7.13%，报5.41港元，成交额9317.07万港元。 ...

Core Viewpoint - China Lesso (02128) has seen a stock price increase of over 7%, with a cumulative rise of more than 10% over the past three trading days, indicating positive market sentiment towards the company [1] Group 1: Company Performance - As of the latest update, China Lesso's stock is up 7.13%, trading at HKD 5.41, with a transaction volume of HKD 93.17 million [1] Group 2: Market Outlook - Shenwan Hongyuan expresses optimism for the real estate construction sector by 2026, noting that market expectations for construction starts are low, which could lead to better-than-expected performance for construction materials like waterproofing and plastic pipes [1] - The long-term outlook for renovation demand is positive, as residents' desire to improve living conditions is expected to gradually manifest with improved income expectations [1] - GF Securities highlights the stable long-term demand for consumer building materials, the continuous increase in industry concentration, and the favorable competitive landscape for quality leading companies, indicating significant long-term growth potential [1]

Group 1 - China Liansu (02128) has seen a stock price increase of over 7%, with a cumulative rise of more than 10% over the past three trading days, currently priced at 5.41 HKD and a trading volume of 93.17 million HKD [1] - Shenwan Hongyuan expresses optimism for the real estate construction sector by 2026, noting that market expectations for construction starts are low, which could lead to better-than-expected performance for construction materials like waterproofing and plastic pipes [1] - Long-term demand for consumer building materials is expected to remain stable, with industry concentration continuing to rise, indicating significant growth potential for quality leading companies in the sector [1]

本文源自：金融界AI电报 中国联塑(2128.HK)高开高走，现涨3.96%报5.25港元，总市值162.88亿港元，最近3个交易日累计涨幅接 近10%。 ...

Core Viewpoint - China Lesso (2128.HK) has seen a significant increase in stock price, rising 3.96% to HKD 5.25, with a total market capitalization of HKD 16.288 billion, and a cumulative increase of nearly 10% over the last three trading days [1] Group 1: Industry Insights - The consumer building materials sector is experiencing a recovery in revenue and profit margins, with a focus on alpha opportunities [1] - Long-term demand for consumer building materials is stable, with increasing industry concentration and favorable competitive landscape, indicating substantial growth potential for quality leading companies [1] - The real estate sector is still in a bottoming phase, awaiting stabilization in sales; core leading companies exhibit strong operational resilience [1] Group 2: Investment Recommendations - Shanghai Shenwan Hongyuan Securities recommends paying attention to the current real estate chain market, expressing optimism about core consumer building material stocks [1] - By 2026, there is an expectation for improvement in real estate construction starts, with the market having low expectations for this segment; building materials related to waterproofing and plastic pipes are currently undervalued and may outperform under policy catalysts [1] - The demand for home improvement will gradually manifest as income expectations improve, benefiting sectors such as coatings, hardware, tiles, and boards in the later stages of the economic cycle [1]

Group 1 - China Liansu (2128.HK) opened high and rose by 3.96% to HKD 5.25, with a total market capitalization of HKD 16.288 billion, and a cumulative increase of nearly 10% over the last three trading days [1] - GF Securities recently pointed out that leading companies in the consumer building materials industry are seeing a recovery in revenue and profit margins, highlighting the potential for alpha opportunities [1] - The long-term demand stability for consumer building materials, continuous improvement in industry concentration, and favorable competitive landscape indicate significant long-term growth potential for quality leading companies [1] Group 2 - The downstream real estate sector is still bottoming out, awaiting stabilization and improvement in sales; core leading companies exhibit strong operational resilience [1] - Shanghai Shenwan Hongyuan Securities also emphasized the importance of the current real estate chain market, expressing optimism for core consumer building material stocks [1] - Looking ahead to 2026, there is optimism regarding the construction start segment, with market expectations being relatively low; valuations for building materials such as waterproofing and plastic pipes are at relatively low levels, which could lead to performance exceeding expectations under policy catalysts [1] Group 3 - In the medium to long term, the demand for renovation in existing stock is expected to gradually manifest as residents' desire to improve living conditions aligns with income expectations [1] - Subsequent periods for coatings, hardware, tiles, and boards are expected to benefit significantly [1] - Recommended stocks to focus on include Oriental Yuhong, China Liansu, Beixin Building Materials, and Weixing New Materials [1]

Summary of the Conference Call on the Real Estate Supply Chain Industry Overview - The real estate supply chain, particularly in the consumer building materials sector, has undergone significant changes over the past four years, with a turning point expected in Q3 2025 when leading companies will see revenue and profit growth year-on-year in Q4 2025, indicating independent growth through strategies like stock renovation, channel expansion, and internationalization despite ongoing industry pressures [1][2] Key Points and Arguments - **Supply Side Changes**: - Companies are enhancing profits through asset impairment, while many peers are exiting or transforming their businesses. The consumer building materials sector is currently undervalued, with most leading companies emerging from difficulties, and a growth trend expected to continue into 2026 [3] - The competition among leading companies is slowing, with strategies such as channel expansion and product diversification being employed to seek new growth points. Price increases in coatings and waterproof materials are anticipated in 2025, with gypsum board also expected to see price hikes in 2026, reflecting a trend of compromise and coexistence among leading firms [4] - **Impact of Urban Renewal Policies**: - Urban renewal policies are significantly boosting the building materials industry, with measures aimed at accelerating the transformation of the stock market to address challenges posed by a declining new housing market. By the end of 2024, there will be approximately 420 million housing units and over 50 billion square meters of total construction area in urban and rural areas, providing substantial demand support for the building materials sector [5] - **Performance in Specific Segments**: - The coatings sector has seen multiple price increases since 2021, with another expected in Q1 2025. Waterproof materials are also set for price hikes in mid-2025, while gypsum board has already undergone several price adjustments. These price changes indicate a shift in demand from the supply side, with these segments stabilizing prices and gradually restoring profitability during a demand downturn [6] - **Revenue Structure Adjustment and Cost Reduction**: - Building materials companies are shifting from reliance on large B clients (real estate bulk purchases) to small B and C end customers (retail market), improving gross margins through channel adjustments and product upgrades. Cost reduction and efficiency measures are expected to show results post-2025, with a notable decrease in expense ratios and improved financial conditions [7] Additional Important Insights - **Current Valuation of the Consumer Building Materials Sector**: - The sector is currently undervalued, showing signs of recovery after several years of adjustment. Leading companies are expected to continue this growth trend into 2026, with ongoing cost reduction measures and diminishing historical issues impacting financial reports, making it a favorable investment opportunity [8] - **Market Expectations and Demand Characteristics**: - Market expectations for the consumer building materials sector are low, with overall demand recovery anticipated to take time. However, there are signs of stabilization and differentiation, such as leading coatings companies exploring the second-hand housing market and non-housing demand growth in sectors like pipes and waterproof materials [9][10] - **Price Elasticity and Supply Structure Expectations**: - Current profit forecasts and valuations for companies have not fully reflected price elasticity. The supply structure has undergone deep adjustments, with small capacities exiting the market, leading to a concentration of market share among companies with brand, channel, and resource advantages, enhancing their pricing power and management capabilities [11] - **Investment Recommendations**: - Investors are advised to focus on companies such as Three Trees, Oriental Yuhong, Henkel Group, and Rabbit Baby, as well as Beixin Building Materials, Weixing New Materials, China Liansu, and ASEAN Holdings, which are decoupling from real estate and transitioning towards C-end and small B clients, with many beginning to expand internationally [12] - **Future Industry Outlook**: - Companies in the industry are making significant efforts to adapt to the current environment, including international expansion, product category diversification, and exploring structural opportunities in the second-hand housing market. While high expectations for rapid demand recovery are tempered, there is confidence that more companies will find recovery opportunities over time, with more sub-sectors expected to stabilize in 2026 [13]