Ping An Securities·2025-11-17 11:15Investment Rating - The report maintains an "Outperform" rating for the building materials industry [1]. Core Views - The traditional fiberglass industry is experiencing a price recovery and improved profitability, while the specialty fabric sector is benefiting from high demand driven by AI technology [4]. - The report highlights the structural recovery of the fiberglass industry in 2025, with a focus on the resilience of demand in key sectors such as wind energy and automotive [3][4]. Summary by Sections Traditional Fiberglass - The industry is set to undergo three rounds of slight price recovery starting in 2024, with a structural rebound in profitability expected in 2025. The demand for roving is driven by high growth in wind power installations and positive trends in new energy vehicles and home appliances, although construction and export demand remain weak [3]. - By the end of 2025, the domestic roving capacity is expected to increase by 460,000 tons per year, but the growth rate of capacity is anticipated to slow down due to more rational competition among companies and reduced capital expenditures in recent years [3][4]. - The profitability of listed fiberglass companies is projected to improve significantly, with a reported net profit of 4.79 billion yuan in the first three quarters of 2025, a year-on-year increase of 49% [9]. Specialty Electronic Fabrics - The demand for specialty electronic fabrics is experiencing a boom due to the rapid development of AI and high-frequency communication technologies. The strong growth in AI computing power is driving the demand for high-performance PCBs and chip packaging substrates [3][4]. - The global AI server shipment is expected to grow at a CAGR of 28.8% from 2022 to 2026, with significant increases in the demand for low dielectric electronic fabrics that meet the high-performance requirements of AI servers and switches [3][52]. - Domestic companies are rapidly catching up in the specialty electronic fabric market, with significant capacity expansions planned. For instance, China National Materials Technology plans to expand its production capacity by 94 million meters annually by 2025 [3][4]. Investment Recommendations - The report suggests focusing on companies such as China National Materials Technology, Honghe Technology, China Jushi, Feilihua, and International Composites, which are well-positioned to benefit from the recovery in the fiberglass industry and the growth in specialty electronic fabrics [4].