ORIENTAL YUHONG(SZ:002271) Ge Long Hui·2026-01-28 00:14Core Viewpoint - The stock price of Dongfang Yuhong (002271.SZ) has shown strong performance, with a cumulative increase of approximately 24% since the beginning of the year, and its market capitalization has surpassed 40 billion [1][3]. Group 1: Company Developments - The controlling shareholder has announced a plan to reduce holdings by up to 3% of the total share capital, which will be used to fulfill employee stock ownership commitments and repay personal pledged loans [3]. - This reduction is seen as a move to stabilize the governance structure and reduce potential risks to the company, aligning with recent strategic actions such as selling multiple real estate assets and liquidating holdings in Jinke Services [3]. - The company is optimizing its asset structure to focus more on its core business, preparing for strategic initiatives in 2026 and beyond [3]. Group 2: Industry Trends - The construction materials industry is at a turning point, transitioning from a high-growth model reliant on real estate development to new structural opportunities [4]. - The industry is expected to reach a bottom in fundamentals by 2024-2025, with potential for growth in 2026 as supply-side improvements stabilize prices [5]. - The demand structure is fundamentally changing, with a significant shift towards renovation needs, which currently account for about 50% of demand and are expected to rise to nearly 70% by 2030 [5]. Group 3: Company’s Strategic Positioning - Dongfang Yuhong is undergoing a strategic transformation from a high accounts receivable model to a healthier development model focused on retail and engineering channels, with a projected revenue contribution from these channels reaching 84.06% by mid-2025 [8]. - The company is also expanding its sand powder and overseas businesses, with sand powder production expected to exceed 12 million tons in 2025, marking a 50% increase from 2024 [10]. - Recent acquisitions, such as the purchase of Construmart in Chile, are part of a strategy to establish an international retail platform and enhance global distribution capabilities [12]. Group 4: Market Expectations and Recovery Signals - There are three significant expectation gaps regarding Dongfang Yuhong: the market underestimates the depth of its strategic transformation, overlooks the reality of its new business growth engines, and focuses on overall industry lows while ignoring positive turning points [7][10][13]. - The company has shown a revenue growth of 8.51% year-on-year in Q3 2025, marking the first positive growth in recent years, indicating a shift in growth momentum [13]. - The competitive environment is improving, with supply-side adjustments and price stabilization signaling an end to the most intense phases of price competition, suggesting a recovery in profitability for leading companies in 2026 [13][14].