Investment Rating - The industry rating is "Recommended" [4] Core Views - The report highlights the potential for increased demand in the construction materials sector, driven by various factors including government projects and rising prices in carbon fiber [1][6] - The report emphasizes the importance of companies with strong operational resilience and high dividends, particularly in the consumer building materials segment [6] - The report suggests that domestic investment expectations are strengthening, with a focus on infrastructure and construction companies benefiting from increased demand [6][9] Summary by Sections Construction Materials - Beneficiaries include companies like Guangdong Hongda, Xuefeng Technology, and Guotai Group due to high demand in civil explosives and major projects like the Yarlung project entering the construction phase [1] - Carbon fiber price increases are noted, with companies such as Zhongfu Shenying and Jilin Chemical Fiber expected to benefit from emerging demand [1] - Companies with strong operational resilience and high dividends, such as Dongfang Yuhong and Weixing New Materials, are recommended for their potential to benefit from domestic consumption stimulus [1][6] Cement Market - The national average cement price is reported at 378.67 RMB/ton, with a decline of 1.1% week-on-week, particularly in regions like North China and East China [3][27] - Cement demand has shown slight recovery but remains 6-7% lower year-on-year, with supply pressures continuing to affect pricing [3][27] - Recommendations include leading cement companies like Conch Cement and Huaxin Cement, which are expected to benefit from domestic demand and industry self-discipline measures [6] Real Estate Market - The report indicates a short-term low overall market sentiment in the new and second-hand housing markets, with new housing transaction area down 12% year-on-year [2][22] - The report tracks transaction data across major cities, highlighting a mixed performance in the real estate sector [2][22] Emerging Opportunities - The report identifies opportunities in the domestic ship coating market, with companies like Maijia Xincai and Songji Co. expected to benefit from rising demand and domestic substitution trends [6][9] - The "Belt and Road" initiative is seen as a catalyst for international engineering projects, with companies like China State Construction and China Metallurgical Group recommended for potential benefits [6][9]

Investment Rating - The report maintains a "Positive" outlook for the building materials industry [2] Core Insights - The building materials sector continues to experience historical lows in 2024 and 2025, but signs of improvement are emerging [4][12] - Revenue for the building materials sector in 2024 is projected at CNY 682.93 billion, a year-on-year decline of 12.41%, ranking second to last among 31 industries [4][16] - In Q1 2025, the sector's revenue decline narrowed to 1.60%, with a revenue of CNY 129.83 billion, improving its ranking to 18th among industries [5][40] - The net profit margin and return on equity (ROE) are at historical lows, with the sector's net profit margin dropping to 2.61% in 2024 [25][28] Summary by Sections 1. Industry Performance Overview - The building materials sector's revenue and net profit continue to decline in 2024, remaining at the bottom of industry rankings [4][16] - Q1 2025 shows a narrowing revenue decline and improvements in net profit and cash flow, with a net profit of -CNY 243 million, a 74.02% year-on-year increase [5][44] 2. Segment Performance - In Q1 2025, segments like cement and glass fiber show positive revenue growth, with cement revenue up 0.11% and glass fiber up 25.24% [6][55] - Most segments, except for pipes, show improvements in net profit year-on-year, with cement, glass fiber, refractory materials, and coatings ending their respective revenue declines [6][58] 3. Investment Strategy - The report suggests that leading companies in the sector can achieve better growth in a challenging environment through internal and external development strategies [8][81] - The anticipated recovery of the real estate sector is expected to stabilize demand for building materials, leading to valuation recovery in the industry [8][84] - Recommended companies include Beixin Building Materials, Weixing New Materials, Shandong Pharmaceutical Glass, and others [8][84]

Group 1 - The company has demonstrated strong execution capabilities by significantly reducing costs and improving efficiency, leading to a substantial decrease in operating expense ratios in Q1 2025 [1] - In Q1 2025, the company's sales, management, R&D, and financial expenses were 540 million, 362 million, 99 million, and 13 million respectively, showing year-on-year decreases of 28.26%, 34.08%, 21.87%, and 57.42% [1] - The company is preparing for a prolonged competitive environment by optimizing internal operations and reducing personnel costs, achieving the largest decline in operating expense ratios in the industry [1] Group 2 - The consumer building materials industry is transitioning to a demand-driven model focused on existing homes, with renovation needs for second-hand and self-owned homes becoming predominant [2] - In 2023, the ratio of renovation demand for second-hand homes to new homes was approximately 6:4, indicating a shift in market dynamics [2] - The industry is facing a fragmented order landscape, necessitating a diversified and integrated supply capability for sustained growth [2] Group 3 - The company has evolved into a platform-type enterprise centered around waterproofing, expanding into related product categories such as mortar, plastic pipes, and coatings [3] - In 2024, non-waterproof business revenue accounted for 26.55% of total revenue, with the mortar business generating 4.152 billion, representing 14.8% of total revenue [3] - Revenue forecasts for the company from 2025 to 2027 are projected at 28.376 billion, 31.699 billion, and 35 billion respectively, with significant growth in net profit anticipated [3]

Core Insights - Brand Finance released the "2025 China Brand Value Top 500" list, showing that the total brand value of Chinese brands exceeded $2 trillion, marking a 3% year-on-year growth, indicating strong global competitiveness [1] - Oriental Yuhong, the largest waterproof system service provider in Asia, made its debut on the list at rank 412, being the only brand from the waterproof industry to be included [1][2] Brand Value and Strength - The report evaluates brand value based on financial performance, market influence, and consumer loyalty, highlighting the development trends and market changes of Chinese brands over the past year [2] - Oriental Yuhong's inclusion in the list reflects its effective brand building and sustainable development [3] Company Performance - Oriental Yuhong has experienced significant growth, with revenue increasing from 710 million yuan in 2008 to 28.1 billion yuan in 2024, representing a nearly 39-fold increase and a compound annual growth rate of approximately 30% over 16 years [4] Business Diversification - The company has diversified its operations beyond waterproofing to include various segments such as construction waterproofing, building materials, and energy-saving insulation, establishing over 70 production and R&D bases domestically and internationally [5] Market Position - Oriental Yuhong has been recognized in multiple prestigious rankings, including Forbes Global 2000 and Hu Run's Top 100 Chinese Companies, reflecting its growing market position and comprehensive strength [6] Innovation and R&D - The company emphasizes research and development, with a focus on product quality and innovation, having established a global leading R&D system and invested 586 million yuan in R&D in 2024 [13][11] Sustainability Efforts - Oriental Yuhong is committed to sustainable development, having received multiple certifications for green products and factories, and actively engaging in projects that promote environmental responsibility [15][17] Social Responsibility - The company invests in improving the living conditions of its workers and provides educational support for workers' children, demonstrating its commitment to social responsibility [18]

Core Viewpoint - The 30th anniversary of Dongfang Yuhong coincides with the ninth "China Brand Day," highlighting the company's evolution from a local waterproof materials manufacturer to a globally influential brand in the construction materials industry, emphasizing the importance of technology and service in enhancing brand value [1][2]. Group 1: Technological Strength - Since its establishment in 1995, Dongfang Yuhong has focused on technological innovation, redefining waterproofing as a critical aspect of building safety rather than just a hidden engineering task [2]. - The company has developed advanced products such as the bio-based waterproof coating with 38% bio-based content, certified by USDA, and the lightweight soundproof plaster with a 50% noise reduction effect, showcasing its commitment to integrating functionality with environmental considerations [2][5]. - Dongfang Yuhong's solutions have been applied in significant projects globally, including the Great Bay Area Bridge and Beijing Daxing International Airport, marking its role in the internationalization of Chinese construction [5][6]. Group 2: Service Commitment - The company has initiated the "Service for the People, Reject Leakage" community service campaign, addressing the leakage issues in old residential areas, which affect approximately 30% of such buildings nationwide [6][8]. - This initiative aims to provide free diagnostics and repairs, demonstrating the company's dedication to improving living conditions and fostering community stability [6][8]. - Dongfang Yuhong's approach reflects a shift from merely selling products to offering comprehensive lifecycle services, aligning with user needs and enhancing brand loyalty [8][10]. Group 3: Brand Development - Dongfang Yuhong emphasizes that the essence of a strong Chinese brand lies in its technological foundation and quality, aiming to elevate "Made in China" to "Chinese Brand" on the global stage [6][10]. - The company's narrative contributes to China's transition from a "brand power" to a "brand strong" nation, showcasing its commitment to quality and trust [10].

一、股东部分股份解除质押基本情况 北京东方雨虹防水技术股份有限公司（以下简称"公司"）近日接到公司控 股股东、实际控制人李卫国先生函告，获悉李卫国先生所持有本公司的部分股份 办理了解除质押手续，具体事项如下： | 股东 | 是否为控股股东 或第一大股东及 | 本次解除质 押股份数量 | 占其所持 | 占公司总 | 起始日 | | 解除日期 | | 质权人 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 名称 | 其一致行动人 | （股） | 股份比例 | 股本比例 | | | | | | | 李卫国 | 是 | 8,200,000 | 1.54% | 0.34% | 2024 年 4 月 日 | 9 | 2025 5 月 9 | 年 日 | 中国银河证 券股份有限 | | | | | | | | | | | 公司 | 二、股东股份累计质押基本情况 证券代码：002271 证券简称：东方雨虹 公告编号：2025-053 北京东方雨虹防水技术股份有限公司 关于公司控股股东部分股份解除质押的公告 本公司及董事会全体成员保证信息披露的 ...

Investment Rating - The report maintains a "Strong Buy" rating for Dongfang Yuhong, with a target price of 15 CNY per share [2][9]. Core Views - The company experienced a decline in revenue and net profit in 2024, with total revenue of 28.056 billion CNY, down 14.52% year-on-year, and a net profit of 108 million CNY, down 95.24% year-on-year. The first quarter of 2025 also saw a revenue drop of 16.71% year-on-year to 5.955 billion CNY, with a net profit of 190 million CNY, down 44.68% year-on-year [2][9]. - Despite the revenue decline, the company is optimizing its channels and improving cash flow, with a significant increase in cash flow from operating activities in the first quarter of 2025 [9]. Financial Summary - **2024 Financial Performance**: - Total revenue: 28,056 million CNY - Year-on-year growth rate: -14.5% - Net profit: 108 million CNY - Year-on-year growth rate: -95.2% - Earnings per share (EPS): 0.05 CNY - Price-to-earnings ratio (P/E): 250 [5][10] - **2025 Financial Projections**: - Expected total revenue: 29,877 million CNY - Expected net profit: 1,438 million CNY - Expected EPS: 0.60 CNY - Expected P/E: 19 [5][10] - **2026 and 2027 Projections**: - 2026 expected total revenue: 32,232 million CNY, net profit: 1,765 million CNY, EPS: 0.74 CNY, P/E: 15 - 2027 expected total revenue: 35,858 million CNY, net profit: 2,332 million CNY, EPS: 0.98 CNY, P/E: 12 [5][10]. Market Performance - The company’s stock price has shown a significant decline of 35% over the past year, compared to the Shanghai and Shenzhen 300 index [8].

Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 15 CNY per share [2][9]. Core Insights - In 2024, the company reported a revenue of 28.056 billion CNY, a year-on-year decline of 14.52%, and a net profit attributable to shareholders of 108 million CNY, down 95.24% year-on-year. For Q1 2025, revenue was 5.955 billion CNY, a decrease of 16.71% year-on-year, with a net profit of 190 million CNY, down 44.68% year-on-year [2][9]. - The company is experiencing a gradual optimization of its channels and improvement in cash flow, despite the ongoing decline in the real estate sector [2][9]. Financial Performance Summary - **2024 Financials**: Total revenue of 28,056 million CNY, with a year-on-year growth rate of -14.5%. Net profit attributable to shareholders was 108 million CNY, with a growth rate of -95.2% [5]. - **2025 Projections**: Expected revenue of 29,877 million CNY, with a growth rate of 6.5%. Projected net profit attributable to shareholders is 1,438 million CNY, with a growth rate of 1,229.8% [5]. - **Earnings Per Share (EPS)**: Projected EPS for 2025 is 0.60 CNY, increasing to 0.74 CNY in 2026 and 0.98 CNY in 2027 [5][9]. Business Segment Analysis - **Revenue Breakdown**: In 2024, retail business revenue was 10.2 billion CNY, accounting for approximately 36.39% of total revenue, with a year-on-year growth of 9.92%. The engineering channel and direct sales generated revenues of 13.4 billion CNY and 4.3 billion CNY, respectively [9]. - **Product Performance**: Revenue from waterproof membranes, coatings, mortar powder, and engineering construction was 11.8 billion CNY, 8.8 billion CNY, 4.2 billion CNY, and 1.6 billion CNY, respectively, with year-on-year changes of -11.45%, -8.96%, -1.06%, and -51.37% [9]. Cash Flow and Cost Management - **Cash Flow Improvement**: In Q1 2025, the company reported a net cash flow from operating activities of -0.81 billion CNY, an improvement of 56.98% compared to the previous period. The expense ratio decreased to 17%, down 3.4 percentage points year-on-year [9]. - **Cost Structure**: The company is optimizing its cost structure, with sales, management, R&D, and financial expense ratios reported at 9.1%, 6.1%, 1.7%, and 0.2%, respectively [9].

Summary of Conference Call Notes Industry Overview - The conference call discusses the construction materials industry, particularly focusing on cement and glass products, amidst recent monetary policy changes by the central bank [1][2]. Key Points and Arguments - **Monetary Policy Impact**: The central bank announced a 0.5% reduction in the reserve requirement ratio and a 0.1% decrease in policy interest rates, expected to inject approximately 1 trillion yuan into the market [3]. - **Cement Market Performance**: As of May 9, the national cement shipment rates were reported at 48%, with regional rates in East and South China at 52% and 54% respectively, showing a month-on-month decline of 1.5%, 0.9%, and 7.2 percentage points [1]. - **Price Trends**: The average price of cement decreased by 4.5 yuan per ton to 387 yuan per ton, marking a 15 yuan drop since early April [1]. - **Glass Market Update**: The average price of float glass was reported at 1318 yuan per ton, down 14 yuan from the previous week, with inventory levels at 58.17 million heavy boxes, an increase of 3.4% [1]. - **Fiber Market**: The average price of alkali-free glass fiber yarn in East China was 3650 yuan per ton, down 50 yuan from before the May Day holiday [1]. Investment Opportunities - **Excess Return Potential**: Historical data suggests that the construction materials sector has a high probability of achieving excess returns compared to the CSI 300 index when the real estate market shows signs of stability and improvement [3][4]. - **Real Estate Market Indicators**: As of April 28, the second-hand housing price index for first and second-tier cities was 196.84 and 145.02 respectively, indicating a stabilization trend. Notably, the investment amount from 30 monitored real estate companies reached 87.6 billion yuan in April, a year-on-year increase of nearly 100% [3]. Recommended Investment Lines - **Main Line One**: Focus on large-scale construction materials with improving supply-demand dynamics, emphasizing price elasticity and high dividend yields [5]. - **Main Line Two**: Favorable outlook on leading consumer building material companies with long-term growth potential, highlighting performance elasticity in high-demand consumer segments [7]. - **Main Line Three**: Interest in companies transitioning or expanding into high-growth sectors such as semiconductors, AI, and robotics [7]. Recommended Companies - **Cement Companies**: Conch Cement, Huaxin Cement, China Jushi, TPI Cement, Shangfeng Cement, Changhai Co. [6]. - **Consumer Building Materials**: Sankeshu, Oriental Yuhong, Beixin Building Materials, Weixing New Materials, Tubao, with a focus on Jianlang Hardware, Qinglong Pipeline, and Longquan Co. [7]. - **High-Growth Companies**: Quartz Co., Planet Graphite, with attention to Zhongqi New Materials [8]. Risk Factors - Potential risks include demand falling short of expectations, gross margins not meeting forecasts, and delays in receivables [8].

Core Viewpoint - The company reported a significant decline in revenue and net profit for Q1 2025, primarily due to weak market demand and ongoing structural adjustments in its business operations [1][2]. Revenue Performance - In Q1 2025, the company achieved revenue of 59.55 billion, a year-on-year decrease of 16.71% [1]. - The decline in revenue is attributed to weak demand in the real estate and infrastructure sectors, with new housing starts down 24.40% year-on-year [1]. - The company is undergoing structural adjustments, with direct sales in real estate procurement and engineering contracting continuing to shrink, impacting short-term revenue growth [1]. Profitability Analysis - The net profit attributable to shareholders for Q1 2025 was 1.92 billion, down 44.68% year-on-year [2]. - The gross margin for Q1 2025 was 23.73%, a decrease of 5.95 percentage points from 29.68% in the same period last year, influenced by a higher proportion of low-margin new products and intense competition in the waterproofing business [2]. - The net profit margin for Q1 2025 was 2.99%, down 1.79 percentage points year-on-year [2]. Cost Management - The company has made progress in controlling expenses, with total operating expenses for Q1 2025 amounting to 10.13 billion, down from 14.58 billion in the previous year [2]. - The sales expense ratio, management expense ratio, R&D expense ratio, and financial expense ratio all showed improvements compared to the previous year [2]. Cash Flow and Receivables - The net cash flow from operating activities for Q1 2025 was -8.13 billion, a significant improvement from -18.89 billion in the same period last year [3]. - The company has been improving its net cash ratio over the past two years, reflecting better expense control and working capital management [3]. - Accounts receivable increased to 88.22 billion from 78.52 billion at the beginning of the year, while other receivables decreased significantly, indicating ongoing efforts to manage historical issues [3]. Investment Outlook - The company aims to explore opportunities in sand powder products and deepen its retail channel while prioritizing partner relationships and accelerating overseas market expansion [4]. - Revenue projections for 2025-2027 are 283.78 billion, 292.73 billion, and 305.72 billion, with net profits of 14.22 billion, 18.99 billion, and 24.03 billion respectively [4]. - The projected price-to-earnings ratios for 2025-2027 are 19.2, 14.4, and 11.4 times, maintaining a "buy" rating [4].