CICC(SH:601995)2025-04-08 15:42Investment Rating - The report maintains a positive investment outlook for the construction and building materials sector, emphasizing its resilience to tariffs and trade wars due to its reliance on domestic demand [2][3]. Core Insights - The construction and building materials sector is expected to benefit from fiscal stimulus aimed at domestic consumption and infrastructure projects, making it a key investment focus [3][6]. - Supply-side reforms are likely to favor sectors such as cement, fiberglass, and steel, which are positioned to benefit from reduced competition and improved profitability [3][8]. - Defensive stocks with high cash flow, high ROE, and high dividend yields are highlighted as valuable during market volatility, particularly cement and state-owned enterprises [3][8]. Summary by Sections Investment Opportunities Post-Tariff - The construction and building materials sector remains attractive post-tariff due to its focus on domestic demand and local operations, making it less vulnerable to external shocks [2][3]. - Key beneficiaries include sectors directly impacted by fiscal policies, such as cement and consumer building materials [3][8]. Demand Factors for Building Materials - There are clear demand drivers for building materials, particularly from infrastructure projects and consumer home improvements, indicating a stable outlook for both B-end and C-end demand [6][17]. Sector Selection Strategy - The report suggests a balanced approach between defensive cement stocks and more aggressive consumer building materials, with a preference for companies like Three Trees and North New Materials [4][7]. Cement Industry Outlook - The cement sector is projected to see improved demand driven by fiscal stimulus, with expectations for a stable or improving national cement shipment rate [10][13]. - Recommended stocks include Huaxin Cement and Conch Cement, which are expected to perform well in the upcoming demand season [10][13]. Glass Industry Forecast - The glass sector faces challenges due to declining construction-related demand, but low export exposure and potential rebounds in the second half of the year are noted [11][13]. - Companies like Xinyi Glass are highlighted for their resilience and dividend yield, making them suitable for investment [11][13]. Fiberglass Sector Analysis - The fiberglass industry is less affected by tariffs due to low export ratios, with strong domestic demand in wind energy and thermoplastics providing a buffer [12][13]. - China Jushi is identified as a key player with a strong position in North America and Europe, mitigating tariff impacts [12][13]. Consumer Building Materials Market - The consumer building materials market is experiencing a decline in demand for waterproof materials, while gypsum board demand remains stable [17][19]. - Companies like North New Materials and Three Trees are noted for their strong performance and strategic pricing approaches [19][20]. Future Demand Drivers - Future demand in the consumer building materials sector is expected to be driven by infrastructure and home renovation projects, with Three Trees positioned for aggressive growth [24].