Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Chinese Basic Materials - **2026 Outlook**: Expected stable year for Chinese commodity demand with growth rates ranging from -1.3% to +2.0% year-over-year, improving sequentially from 2H25A [1][24] Core Insights and Arguments - **Demand Growth**: - Chinese copper and aluminum demand projected to grow by 2.0% and 0.8% respectively in 2026E, a deceleration from 1H25A but approximately 3% better than 2H25A [21][27] - Demand for lithium is expected to remain strong due to energy storage systems (ESS) [21] - Cement and steel demand under pressure due to weakened infrastructure activities, though government financing may improve conditions [22] - **Supply Dynamics**: - Solid supply/demand balance for most commodities, but strong pricing in 2025 may lead to changes in supply outlook [2] - Supply discipline is challenged in aluminum, while lithium shows signs of accelerated supply response; copper supply is expected to remain tight [2][17] - Anti-involution policies in oversupplied segments may improve industry capacity utilization by 10% [3] - **Acquisitions and Strategic Shifts**: - Increased acquisitions and asset injections by large state-owned enterprises (SOEs) in coal, steel, and other sectors, reflecting strategic repositioning [4] Commodity-Specific Insights - **Cement**: Positive outlook with expected recovery in capacity utilization from 49% to 60% by end of 2026E due to capacity closures [17] - **Coal**: Stable pricing anticipated due to balanced demand and supply [18] - **Copper**: Continued strong pricing expected due to limited supply growth [17] - **Lithium**: Market expected to tighten in 1H26E before easing in 2H26E, with potential for a balanced market depending on supply responses [17] - **Steel**: Margins expected to remain depressed with slower capacity work [17] - **Gold**: Forecasted price to reach US$4,900/oz by Dec-2026, supported by central bank purchases [20] Important but Overlooked Content - **Investment Ratings**: - Positive ratings maintained for Zijin-H/A, CMOC-H/A, and Anhui Conch-H/A; cautious stance on Ganfeng-H/A and Tianqi-H/A [16] - Upgrades for most coal names to NEUTRAL from Sell, indicating a more constructive view on coal [16] - **Market Dynamics**: - The contribution from the property sector to steel and cement demand is now limited, accounting for only 7-8% [22] - Expectations of flat coal demand driven by stable coal-fired power generation [23] - **Key Assumptions for Demand Estimates**: - Infrastructure investment growth projected at 4% for 2026E, with traditional infrastructure expected to grow by 1% [26] This summary encapsulates the critical insights and projections regarding the Chinese basic materials industry, highlighting both opportunities and risks for investors.

Group 1 - The cement sector experienced a rise of 0.81% on January 5, with Sichuan Jinding leading the gains [1] - The Shanghai Composite Index closed at 4023.42, up 1.38%, while the Shenzhen Component Index closed at 13828.63, up 2.24% [1] - Key stocks in the cement sector showed various performance levels, with Sichuan Jinding closing at 14.12, up 3.14%, and Huaxin Cement at 25.22, up 2.77% [1] Group 2 - The cement sector saw a net outflow of 72.81 million yuan from institutional investors, while retail investors contributed a net inflow of 47.65 million yuan [2] - Major stocks like Conch Cement had a significant net inflow of 90.25 million yuan from institutional investors, despite a net outflow from retail investors [3] - The overall trading volume and turnover in the cement sector reflected active participation, with notable transactions in stocks like Sichuan Jinding and Huaxin Cement [1][2]

本月底法定/註冊股本總額： RMB 5,299,302,579 呈交日期: 2026年1月5日 I. 法定/註冊股本變動 FF301 | 1. 股份分類 | 普通股 | 股份類別 | H | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00914 | 說明 | H股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 1,299,600,000 | RMB | | | 1 RMB | | 1,299,600,000 | | 增加 / 減少 (-) | | | | 0 | | | RMB | | | | 本月底結存 | | | 1,299,600,000 | RMB | | | 1 RMB | | 1,299,600,000 | | 2. 股份分類 | 普通股 | 股份類別 | A | | | 於香港聯交所上市 (註1) | | 否 | | | --- | - ...

Group 1 - The core point of the article is the completion of a shareholding change at Anhui Huaxin Micro-Nano Integrated Circuit Co., Ltd., with China Mobile and China National Building Material becoming significant shareholders through their respective investment funds [1][3] - The company has undergone a management team change, with Zhang Wei appointed as the new chairman by China Mobile, while the core management team remains led by Yu Lei and Lv Dongfeng, who have extensive experience in MEMS technology development and industry operations [3] - Established in March 2022, the company has a registered capital of 1 billion RMB and is positioned as a leading 8-inch MEMS wafer foundry in China, focusing on manufacturing MEMS wafers for various applications [3] Group 2 - The total investment for the 8-inch MEMS wafer production line project is 5.06 billion RMB, covering an area of approximately 154 acres with a total construction area of 82,000 square meters [3] - The project is recognized as a significant initiative in the national integrated circuit production capacity layout, receiving attention from various national and provincial authorities [3] - The company plans to achieve a manufacturing capacity of 10,000 wafers per month by 2025 and 30,000 wafers per month by 2027 [3]

Group 1 - The core viewpoint of the article highlights a decline in China's cement production, with a reported output of 150 million tons in November 2025, representing a year-on-year decrease of 8.2% [1] - Cumulatively, from January to November 2025, China's total cement production reached 1.55 billion tons, marking a decline of 6.9% compared to the previous year [1] - The data is sourced from the National Bureau of Statistics and compiled by Zhiyan Consulting, indicating a significant trend in the cement industry [1] Group 2 - The article lists several publicly listed companies in the cement sector, including Qingsong Jianhua, Jinyu Group, Sichuan Jinding, Fujian Cement, and others, which are relevant to the industry analysis [1] - Zhiyan Consulting is identified as a leading industry consulting firm in China, specializing in in-depth industry research reports and providing comprehensive consulting services for investment decisions [1]

Group 1 - The core point of the news is that Anhui Conch Cement Co., Ltd. has engaged in significant related party transactions, including logistics services and procurement agreements, which are expected to impact its financials in 2026 [1][2][3] Group 2 - On December 31, 2025, Anhui Conch Cement's stock closed at 21.86 yuan, with a slight increase of 0.09% and a trading volume of 153,900 lots, resulting in a total transaction amount of 337 million yuan [1] - The net inflow of main funds on December 31 was 16.4 million yuan, accounting for 4.87% of the total transaction amount, while retail investors experienced a net outflow of 22.1 million yuan, representing 6.56% of the total [1] - The company signed a logistics service contract with Haihui Company, with a transaction cap of 3 billion yuan for 2026, and a contract for charging station equipment with a cap of 150 million yuan [1] - Two procurement framework agreements were signed with Haihua Reagents for the purchase of combustion promoters, melting promoters, desulfurizers, and water treatment agents, with total expected transaction amounts of 151 million yuan and 149 million yuan respectively for 2026 [2]

Core Viewpoint - The stock price of Conch Cement (600585) has shown a slight increase, closing at 22.2 yuan, reflecting a 0.09% rise from the previous week, with a total market capitalization of 115.843 billion yuan, ranking first in the cement sector and 154th in the A-share market [1]. Trading Information Summary - On December 29, Conch Cement executed a block trade with a transaction amount of 2.221 million yuan [2][4]. Company Announcement Summary - Conch Cement signed a logistics and equipment usage contract with Haihui Company on December 31, 2025, with a total transaction cap of 3 billion yuan for logistics services and 150 million yuan for equipment usage in 2026 [3][4]. - The company also entered into two procurement framework agreements with Conch Additives, with expected total transaction amounts not exceeding 151 million yuan and 149 million yuan for various chemical agents in 2026 [3][4].

Core Viewpoint - Anhui Conch Cement Co., Ltd. has signed contracts with Haihui Company for supply chain logistics and charging station equipment, with significant transaction limits for 2026 [1] Group 1: Stock Performance - As of December 31, 2025, Conch Cement's stock closed at 21.86 yuan, up 0.09% from the previous trading day, with a total market capitalization of 115.843 billion yuan [1] - The stock opened at 21.83 yuan, reached a high of 22.02 yuan, and a low of 21.81 yuan, with a trading volume of 337 million yuan and a turnover rate of 0.38% [1] Group 2: Contract Details - The contracts signed with Haihui Company include a supply chain logistics service for cement, clinker, aggregates, ready-mixed concrete, and coal, with a transaction cap of 3 billion yuan for 2026 [1] - Additionally, Haihui Company will utilize and operate charging station equipment provided by Conch Cement, with a transaction limit of 150 million yuan for the same year [1] - These transactions are classified as continuing connected transactions, approved by the board of directors, and are exempt from independent shareholder approval [1]

Investment Rating - The report maintains a "Recommended" investment rating for the building materials industry [1] Core Insights - The building materials industry is experiencing a mixed performance, with traditional materials weakening while high-demand electronic yarns support the resilience of fiberglass [1][3] - The industry is expected to see a recovery in 2025, driven by urban renewal strategies and a shift towards high-quality green materials [5][6] Summary by Sections 1. Industry Overview - The building materials sector is crucial for infrastructure and strategic emerging industries, with China leading in the production of various materials [6][7] - The industry is undergoing a transformation towards high-end, green, and digital solutions, supported by government initiatives [6][8] 2. Traditional Materials and Electronic Yarn - Cement demand remains weak, with high kiln shutdown rates and stable prices in December; a rebound is expected post-Spring Festival [10][14] - Fiberglass shows a mixed demand; traditional yarns face price stabilization while high-end electronic yarns continue to see price increases due to supply constraints [40][42] - Consumer building materials show slight improvement in retail sales, driven by year-end demand, but overall demand remains below previous years [38] 3. Market Dynamics - The building materials industry maintained a stable operation in December, with a business climate index of 102.9, indicating steady demand and production [9] - The industry is witnessing a gradual recovery in confidence, with a 3.66% increase in December, outperforming the Shanghai and Shenzhen 300 index [48][49] 4. Investment Recommendations - Cement companies like Huaxin Cement, Shangfeng Cement, and Conch Cement are recommended due to expected improvements in supply-demand dynamics and profitability [4] - For fiberglass, companies like China Jushi and China National Materials are highlighted for their strong positioning in high-demand segments [4] - Consumer building materials firms such as Oriental Yuhong and Beixin Building Materials are expected to benefit from urban renewal and quality upgrades [4]

Core Viewpoint - The company has entered into two procurement framework agreements with Conch Reagents, involving the purchase of combustion and melting aids, as well as desulfurization and water treatment agents, with a total estimated transaction amount for 2026 not exceeding RMB 3 billion [1] Group 1: Procurement Agreements - The company signed a procurement framework agreement for combustion and melting aids with Conch Reagents, with a total estimated transaction amount for 2026 not exceeding RMB 151 million [1] - The company also signed a procurement framework agreement for desulfurization and water treatment agents with Conch Reagents, with a total estimated transaction amount for 2026 not exceeding RMB 149 million [1]