Shenwan Hongyuan Securities·2026-03-03 05:59Investment Rating - The report maintains a positive outlook on the construction materials industry, specifically highlighting the waterproof segment as a key area of focus [2][4]. Core Insights - The waterproof industry is experiencing price increases of 5%-10% from major players such as Oriental Yuhong, Keshun, and Beixin, driven by rising asphalt prices and the need to maintain product quality [4]. - The timing of these price hikes is earlier than usual, indicating a strong demand signal before the traditional peak season [4]. - The report identifies significant changes in demand structure, including increased importance of non-residential scenarios and a rise in second-hand housing transactions, which are expected to boost the renovation market [4]. - The report suggests that the construction materials sector, particularly waterproofing, is well-positioned for growth, with additional price increase opportunities in cement, glass, and gypsum board as demand recovers [4]. Summary by Sections Price Increases - Major companies in the waterproof sector have announced price hikes ranging from 5%-10% effective March 15, 2026, due to increased costs and a favorable market environment [4][5]. Demand Dynamics - The report notes a shift in demand dynamics, with non-residential applications gaining importance and a significant increase in second-hand housing transactions, which could lead to a rise in renovation activities [4]. Investment Recommendations - The report recommends focusing on the waterproof segment, specifically suggesting Keshun and keeping an eye on Oriental Yuhong. It also highlights companies like Hanhigh Group and SanKeTree for their strong performance in challenging market conditions [4][6].