Orient Securities·2025-07-17 05:42Investment Rating - The report maintains a "Buy" rating for the fiberglass industry, indicating a relative strength of over 15% compared to market benchmarks [4][13]. Core Insights - The fiberglass industry has initiated a self-regulation against "involution" competition, yielding significant results. The government has prioritized addressing low-price disorderly competition, with a focus on orderly exit of outdated capacities [9]. - The collective price recovery initiated by leading companies like China Jushi has alleviated the price war, leading to improved profitability for major players in the first half of 2025. For instance, China Jushi reported a net profit of 730 million yuan in Q1 2025, a year-on-year increase of 108.5% [9]. - Despite the alleviation of price competition, supply-demand imbalances persist, with production capacity expected to rise from 5.41 million tons in 2020 to 7.35 million tons in 2024, raising concerns about potential price declines if competition intensifies [9]. Summary by Sections Investment Recommendations and Targets - The report suggests focusing on leading fiberglass companies such as China Jushi (600176, Buy) and China National Materials (002080, Not Rated), anticipating a significant profit improvement in the first half of 2025 due to collective price recovery efforts [4]. Industry Dynamics - The fiberglass industry is not classified as overcapacity, as it is encouraged by the state as an emerging industry. The ongoing capacity expansion, coupled with weak demand, raises concerns about future price stability [9]. - The implementation of "involution" countermeasures is expected to yield better results in maintaining stable prices and volumes, enhancing market expectations for corporate performance [9].