Tianfeng Securities·2025-08-05 04:11Investment Rating - Industry rating is maintained at "Outperform the Market" [4] Core Viewpoints - The report emphasizes the opportunity to focus on traditional sectors during market pullbacks while continuing to recommend high-end electronic fabric products. The recent meeting of the Central Political Bureau highlighted the need to stabilize employment, enterprises, markets, and expectations, which is expected to release domestic demand potential. The report anticipates that the governance of "involution" will form a combination of market, administrative, and legal measures, leading to clearer price recovery effects in industries with good demand support, such as cement [2][10] - The report suggests that the traditional building materials sector is nearing a cyclical bottom, with expectations for improvement in infrastructure and real estate demand. It highlights that the basic conditions for the sector are expected to improve, particularly with the recent release of real estate optimization policies [16] Summary by Sections Market Review - The report notes that the Shanghai and Shenzhen 300 index fell by 1.75%, while the building materials sector (CITIC) dropped by 3.32%. Among individual stocks, Honghe Technology saw a significant increase of 22.1% [1][10] - The performance of the recommended stocks included Honghe Technology (+22.1%), Zhongcai Technology (-2.5%), Xibu Cement (-1.44%), Huaxin Cement (-6.9%), and others [1][10] Recommended Stocks - The report recommends a focus on the following stocks: Zhongcai Technology, Honghe Technology, Xibu Cement, Huaxin Cement, Sankeshu, Dongfang Yuhong, and Weixing New Materials [3][16] Key Industry Insights - Cement is expected to benefit from anticipated improvements in infrastructure and real estate demand. The supply structure is expected to continue optimizing in the medium to long term [16] - The report indicates that the consumption building materials sector is likely to stabilize as real estate policies improve, with leading companies undergoing channel transformations to enhance scale effects [16] - New materials such as glass and carbon fiber are expected to face high demand and opportunities for domestic substitution, with leading companies likely to experience rapid growth [16] - The report also notes that the glass sector is at a historically low market value, with expectations for recovery as the industry undergoes cold repairs [16]