Core Viewpoint - After being privatized and delisted from the Hong Kong stock market in 2019, Zhenstone Co., Ltd. is re-entering the capital market after six years, with significant revenue growth and a stable outlook for its performance despite some risks of revenue decline in the coming years [1]. Financial Performance - In the first three quarters of this year, the company achieved operating revenue of 5.397 billion yuan, an annualized increase of 62.13% compared to 2024 [1]. - The net profit after deducting non-recurring gains and losses was 567 million yuan, with an annualized increase of 26.62% compared to 2024 [1]. - The company reported a total asset value of 10.941 billion yuan as of June 30, 2025, up from 9.039 billion yuan at the end of 2024 [2]. - The total liabilities to assets ratio was 69.27% as of June 30, 2025, compared to 67.77% at the end of 2024 [2]. Revenue and Profit Trends - The company anticipates a decline in operating revenue from 2022 to 2024, primarily due to falling sales prices of its main products, but expects a recovery in revenue in the first half of 2025 as prices stabilize [1]. - The operating revenue for 2025 is projected to be 3.275 billion yuan for the first half, down from 4.438 billion yuan in 2024 [2]. Related Party Transactions - Zhenstone Co., Ltd. has significant related party transactions with China Jushi, with the amount of transactions constituting a high percentage of the company's operating costs, ranging from 60.42% to 70.49% over the reporting periods [3]. - The company has begun engaging third-party suppliers for glass fiber procurement, with plans for large-scale purchases from international suppliers starting in 2025 [4]. Bad Debt Provisions - The company has adjusted its bad debt provisions for accounts receivable from Zhongke YN, increasing the provision from 5% to 80% after the client was listed as a dishonest executor [5][10]. - The accounts receivable balance as of June 30, 2025, was 358.185 million yuan, with a bad debt provision of 286.548 million yuan at an 80% provision rate [7]. IPO and Fundraising - Zhenstone Co., Ltd. plans to raise approximately 3.981 billion yuan through its IPO, which will be allocated to various projects including the construction of glass fiber product production bases and a research and development center [10]. Dividend History - Prior to the IPO application, the company distributed significant cash dividends totaling approximately 1.14 billion yuan in 2022 and 2023 [11].

Market Overview - The glass and fiberglass sector increased by 1.72% compared to the previous trading day, with Zhongcai Technology leading the gains [1] - The Shanghai Composite Index closed at 4007.76, up 0.97%, while the Shenzhen Component Index closed at 13452.42, up 1.73% [1] Stock Performance - Zhongcai Technology (002080) closed at 32.63, up 4.92% with a trading volume of 332,700 shares and a transaction value of 1.07 billion [1] - Honghe Technology (603256) closed at 33.17, up 2.57% with a trading volume of 257,900 shares and a transaction value of 847 million [1] - Jinjing Technology (600586) closed at 6.05, up 1.85% with a trading volume of 1,006,100 shares and a transaction value of 609 million [1] - International Composite (301526) closed at 6.07, up 1.68% with a trading volume of 497,400 shares and a transaction value of 300 million [1] - Other notable stocks include Changhai Co. (300196) at 14.57, up 1.18%, and China Jushi (600176) at 15.90, up 0.95% [1] Capital Flow - The glass and fiberglass sector saw a net inflow of 177 million from institutional investors, while retail investors experienced a net outflow of 1.27 billion [2] - The main capital flow data indicates that Zhongcai Technology had a net inflow of 48.60 million from institutional investors, while retail investors had a net outflow of 75.64 million [3] - Honghe Technology experienced a net outflow of 89.72 million from institutional investors, indicating a shift in investor sentiment [3]

Core Insights - The glass fiber industry has strong connections between upstream and downstream sectors, with upstream involving raw materials like ores and chemicals, midstream focusing on manufacturing, and downstream applications in transportation, construction, electronics, and emerging industries [1][4]. Industry Overview - Major listed companies in the glass fiber industry include China Jushi (600176), China National Materials (002080), Changhai Co. (300196), International Composites (301526), Shandong Glass Fiber (605006), Honghe Technology (603256), and Jiuding New Materials (000834) [1][2]. - The industry chain includes upstream suppliers such as quartz companies and chemical groups, midstream manufacturers, and downstream users [2]. Regional Distribution - Glass fiber production is concentrated in Jiangsu, Zhejiang, and Shandong provinces, with Jiangsu hosting many manufacturers like Changhai Co. and China National Materials, while the leading company, China Jushi, is located in Zhejiang [4]. Financial Performance - In 2024, China Jushi and China National Materials are expected to lead in revenue, with China Jushi projected to generate 15.48 billion yuan and a gross margin of 24.34% [6][7]. - Other companies like Jiuding New Materials and Changhai Co. also show strong gross margins above 20% [6][7]. Investment Trends - Since 2022, companies in the glass fiber sector have been expanding through subsidiaries, investment funds, and capital increases [8]. - Notable investments include International Composites planning to invest approximately 230 million yuan in upgrading production lines, and China Jushi investing around 951 million yuan for a new production line [10].

Market Overview - The glass fiber sector increased by 0.54% on November 5, with Jinjing Technology leading the gains [1] - The Shanghai Composite Index closed at 3969.25, up 0.23%, while the Shenzhen Component Index closed at 13223.56, up 0.37% [1] Stock Performance - Jinjing Technology (600586) closed at 5.94, up 4.95% with a trading volume of 1,199,100 shares and a transaction value of 700 million [1] - Jiuding New Materials (002201) closed at 8.78, up 3.91% with a trading volume of 257,000 shares [1] - Qibin Group (601636) closed at 7.07, up 1.73% with a trading volume of 383,300 shares [1] - Other notable performers include: - Kaisheng New Energy (600876) at 11.29, up 1.71% [1] - Zaiseng Technology (603601) at 4.80, up 1.69% [1] - Sanxia New Materials (600293) at 3.34, up 1.52% [1] Capital Flow - The glass fiber sector saw a net inflow of 68.10 million from institutional investors, while retail investors experienced a net inflow of 1.59 million [2] - Notable capital flows include: - Jinjing Technology had a net outflow of 48.45 million from institutional investors [3] - China Jushi (600176) saw a net inflow of 28.19 million from institutional investors [3] - Jiuding New Materials had a net inflow of 20.33 million from institutional investors [3]

Group 1: China Jushi (600176.SH) - The company achieved a revenue of 139.04 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 19.53% [6] - The net profit attributable to shareholders reached 25.68 billion yuan, up 67.51% year-on-year, with a non-recurring net profit of 26.12 billion yuan, increasing by 125.91% [6][9] - The company is expected to achieve net profits of 34.91 billion, 41.07 billion, and 46.48 billion yuan from 2025 to 2027, driven by the recovery of fiberglass prices and demand from various downstream sectors [9] Group 2: Transsion Holdings (688036.SH) - The company reported a revenue of 204.66 billion yuan in Q3 2025, a year-on-year increase of 22.60%, while the net profit attributable to shareholders was 9.35 billion yuan, down 11.06% year-on-year [11] - The company is expected to achieve revenues of 694.0 billion, 751.7 billion, and 871.6 billion yuan from 2025 to 2027, with net profits of 38.2 billion, 56.7 billion, and 70.8 billion yuan respectively [13] Group 3: Tonglian Precision (688210.SH) - The company reported a revenue of 2.4 billion yuan in Q3 2025, a year-on-year increase of 5.75%, while the net profit attributable to shareholders was 884,000 yuan, down 91.67% year-on-year [15] - The company is expected to achieve revenues of 11.4 billion, 15.5 billion, and 21.1 billion yuan from 2025 to 2027, with net profits of 1.0 billion, 1.9 billion, and 2.9 billion yuan respectively [17] Group 4: Topband Co., Ltd. (002139.SZ) - The company achieved a revenue of 26.9 billion yuan in Q3 2025, a slight increase of 0.1% year-on-year, while the net profit attributable to shareholders was 900 million yuan, down 44.7% year-on-year [18] - The company is expected to achieve net profits of 6.2 billion, 8.5 billion, and 10.8 billion yuan from 2025 to 2027 [19] Group 5: Inspur Information (000977.SZ) - The company reported a revenue of 1206.69 billion yuan in the first three quarters of 2025, a year-on-year increase of 45%, with a net profit of 14.82 billion yuan, up 15% year-on-year [25] - The company is expected to achieve net profits of 26.38 billion, 37.31 billion, and 47.77 billion yuan from 2025 to 2027 [26] Group 6: Benda Pharmaceutical (300558.SZ) - The company achieved a revenue of 27.17 billion yuan in the first three quarters of 2025, a year-on-year increase of 15.90%, while the net profit attributable to shareholders was 3.17 billion yuan, down 23.86% year-on-year [28] - The company is expected to achieve revenues of 35.50 billion, 43.71 billion, and 53.09 billion yuan from 2025 to 2027, with net profits of 5.73 billion, 7.21 billion, and 8.56 billion yuan respectively [29] Group 7: XWANDA (300207.SZ) - The company reported a revenue of 435.34 billion yuan in the first three quarters of 2025, a year-on-year increase of 13.73%, with a net profit of 14.05 billion yuan, up 15.94% year-on-year [35] - The company is expected to achieve net profits of 21.83 billion, 30.29 billion, and 40.31 billion yuan from 2025 to 2027 [37] Group 8: YH Technology (688080.SH) - The company achieved a revenue of 2 billion yuan in Q3 2025, a year-on-year increase of 34.5%, with a net profit of 400 million yuan, up 17.5% year-on-year [39] - The company is expected to achieve net profits of 1.5 billion, 2 billion, and 2.6 billion yuan from 2025 to 2027 [40] Group 9: Zhongji Xuchuang (300308.SZ) - The company reported a revenue of 102.2 billion yuan in Q3 2025, a year-on-year increase of 56.8%, with a net profit of 31.4 billion yuan, up 125% year-on-year [42] - The company is expected to achieve net profits of 107 billion, 205 billion, and 268 billion yuan from 2025 to 2027 [43] Group 10: Dongfang Tower (002545.SZ) - The company achieved a revenue of 33.92 billion yuan in the first three quarters of 2025, a year-on-year increase of 9.05%, with a net profit of 8.28 billion yuan, up 77.57% year-on-year [44] - The company is expected to achieve net profits of 12.68 billion, 14.46 billion, and 17.19 billion yuan from 2025 to 2027 [46]

Investment Rating - The report upgrades the investment rating of the company to "Buy" [4][6] Core Views - The company achieved a revenue of 13.904 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 19.53%, and a net profit attributable to shareholders of 2.568 billion yuan, up 67.51% year-on-year [1][6] - The revenue for Q3 alone was 4.795 billion yuan, with a year-on-year growth of 23.17%, while the net profit for the same period was 881 million yuan, reflecting a year-on-year increase of 54.06% [1][6] - The company is expected to benefit from the recovery of glass fiber prices and increased demand in downstream applications, which will support future earnings growth [4][6] Summary by Sections Financial Performance - In Q3 2025, the company reported a revenue of 4.795 billion yuan, a year-on-year increase of 23.17%, and a net profit of 881 million yuan, up 54.06% year-on-year [1][2] - The gross profit margin for the first three quarters increased by 8.69 percentage points to 32.42%, driven by product structure optimization and cost control measures [3] - Operating cash flow significantly increased, with a net inflow of 2.135 billion yuan, up 99.20% year-on-year, and inventory turnover improved [3] Future Projections - The company is projected to achieve net profits of 3.491 billion yuan, 4.107 billion yuan, and 4.648 billion yuan for the years 2025, 2026, and 2027 respectively [4][11] - The report anticipates that the company will continue to grow as it expands into high-end electronic fabric markets and benefits from recovering glass fiber prices [4][11]

Market Overview - The glass and fiberglass sector experienced a decline of 1.58% on November 4, with Honghe Technology leading the drop [1] - The Shanghai Composite Index closed at 3960.19, down 0.41%, while the Shenzhen Component Index closed at 13175.22, down 1.71% [1] Stock Performance - Key stocks in the glass and fiberglass sector showed varied performance, with Jin Jing Technology closing at 5.66, up 0.35%, and Honghe Technology closing at 32.69, down 2.97% [1][2] - The trading volume and turnover for major stocks included Jin Jing Technology with 1.3483 million shares traded and a turnover of 770 million yuan, while Honghe Technology had 179,700 shares traded with a turnover of 596 million yuan [1][2] Capital Flow - The glass and fiberglass sector saw a net outflow of 331 million yuan from institutional investors, while retail investors had a net inflow of 399 million yuan [2] - The capital flow for individual stocks indicated that major stocks like Honghe Technology and Jiu Ding New Materials experienced significant net outflows from institutional and speculative funds [3]

Group 1 - The company has approved a share repurchase plan to buy back between 30 million and 40 million shares within a 12-month period, using a total fund not exceeding 880 million RMB, with a maximum repurchase price of 22 RMB per share [2] - As of October 31, 2025, the company has repurchased 1 million shares, representing 0.025% of the total share capital, with a total transaction amount of approximately 16.15 million RMB [3] - The repurchased shares will be used for the company's equity incentive plan, and if the plan is not approved, the shares will be canceled within three years after the disclosure of the repurchase results [2] Group 2 - The company will adhere to relevant regulations and make repurchase decisions based on market conditions, ensuring timely information disclosure regarding the progress of the share repurchase [4]

Core Viewpoint - China Jushi (600176) announced a share buyback plan, indicating a commitment to enhancing shareholder value through the repurchase of shares [1] Group 1 - As of October 31, 2025, the company plans to repurchase a total of 1,000,000 shares [1] - The repurchased shares represent 0.025% of the company's current total share capital [1]

Industry Investment Rating - The investment rating for the construction materials industry is "Outperform the Market" and is maintained [1] Core Views - The construction materials industry is currently at a cyclical bottom in terms of profitability, with leading companies in various segments performing in line with expectations. For instance, China Jushi in the fiberglass sector has seen a significant year-on-year improvement in profitability, while companies like Rabbit Baby have also reported substantial profit improvements due to investment income. Other leading companies such as Oriental Yuhong, Beixin Building Materials, Qibin Group, and Jianlang Hardware are also showing signs of bottoming out in their fundamentals. It is anticipated that stock prices may break out of the bottom range under the influence of policy catalysts and market style shifts [4][5] Summary by Relevant Sections Cement - Demand for cement has shown a slight month-on-month improvement, primarily due to infrastructure projects and better weather conditions, although year-on-year demand remains down. The overall demand is still in a weak recovery phase, influenced by weather disruptions and the pace of demand release. In September 2025, the monthly cement production was 154 million tons, down 8.6% year-on-year [5][10] Glass - The glass industry is experiencing a continuous decline in demand due to the impact of real estate. Short-term demand during the traditional peak season has shown limited improvement, and inventory levels among intermediaries remain relatively high. The supply-demand imbalance persists, with limited improvement in downstream terminal demand. The industry is expected to face increased environmental requirements and costs, accelerating the pace of cold repairs [5][17] Fiberglass - The fiberglass sector is witnessing a price recovery, with price increases of 5%-10% reported. The demand for electronic yarns is driven by the AI industry, leading to a significant increase in both volume and price. The demand is expected to continue growing alongside AI developments [6] Consumer Building Materials - The profitability of the consumer building materials sector has reached a bottom, with prices having no further downward space after years of competition. The sector is strongly advocating for price increases and profitability improvements, with several categories like waterproofing, coatings, and gypsum boards issuing price increase notices this year. A recovery in profitability is anticipated for leading companies in the second half of the year [6] Recent Company Announcements - Conch Cement reported Q3 revenue of 20 billion yuan, down 11.4% year-on-year, but net profit increased by 3.4% year-on-year to 1.94 billion yuan, benefiting from cost reductions and improved gross margins. Q3 revenue for Qibin Group was 4.39 billion yuan, up 18.9% year-on-year, with a net profit of 20 million yuan, marking a return to profitability [19][20][22]