Investment Rating - The report maintains an "Outperform" rating for the building materials sector [7]. Core Insights - The traditional building materials sector is expected to see sustained price improvements due to strong short-term cement peak-shifting collaboration, with long-term supply policies likely to support profit margins. High dividends highlight the long-term investment value, particularly in regional cement leaders [4][12]. - The report emphasizes the importance of focusing on leading companies in the renovation materials sector, as they continue to innovate through channel expansion and product diversification, which may accelerate market share growth amid industry consolidation [4][12]. - There is a notable investment opportunity in electronic fabrics, particularly for leading companies with strong expansion momentum and first-mover advantages, driven by high demand from AI computing needs [4][12]. Summary by Sections 1. Building Materials 2025H1 Performance Summary 1.1 Renovation Materials: Demand Under Pressure, Intense Competition - The renovation materials sector faced weak demand in 2025H1, with total revenue for sample companies at 69.7 billion, down 7% year-on-year, and net profit at 3.9 billion, down 19% year-on-year. The second quarter saw similar trends, with revenue of 40.7 billion, down 7%, and net profit of 2.7 billion, down 22% year-on-year [8][15][18]. 1.2 Cement: Supply-Side Reform Effects Continue to Show - In 2025Q2, most cement companies reported improved year-on-year profits despite some pressure on sales and revenue. The national average cement price was 382 yuan, up 2% year-on-year, while the price difference between cement and coal averaged 328 yuan, up 8% year-on-year [9][25][26]. 1.3 Glass Fiber: Rising Volume and Price for Roving and High-End Electronic Fabrics - The glass fiber sector experienced significant profit improvements due to rising demand for roving and high-end electronic fabrics, driven by wind power and AI computing needs. Major companies reported good revenue and profit growth in 2025Q2 [9][35]. 1.4 Glass: Pharmaceutical Glass Demand Under Pressure - The glass sector faced challenges, with pharmaceutical glass demand under pressure and overall market conditions for float glass and photovoltaic glass continuing to decline. Revenue and profit for leading companies remained under pressure [10]. 1.5 Other New Materials: Explosive Materials Market Upturn - The explosive materials sector saw rapid revenue and profit growth, while other materials like refractory materials faced increasing pressure. The overall demand for glass wool products remained weak [11]. 2. Focus on Cement Value Recovery and New Electronic Fabrics - The report suggests focusing on cement value recovery and the potential of electronic fabrics and corporate transformation opportunities, particularly in traditional building materials driven by asset consolidation [12][23].

Core Viewpoint - The company reported a slight decline in revenue for H1 2025, primarily due to reduced construction income from waste disposal, but achieved a year-on-year increase in net profit attributable to shareholders [1] Group 1: Financial Performance - In H1 2025, the company achieved revenue of 3.09 billion yuan, a year-on-year decrease of 1.6%, mainly impacted by reduced construction income from waste disposal [1] - The net profit attributable to shareholders was 1.29 billion yuan, reflecting a year-on-year increase of 9.3% [1] - The core net profit from the waste-to-energy business was 450 million yuan, a year-on-year decrease of 6.0%, influenced by a high base and losses in the new energy segment [1] Group 2: Waste Disposal Operations - The waste disposal segment generated revenue of 2.38 billion yuan in H1 2025, a year-on-year decrease of 7.0%, with construction income dropping to 270 million yuan, down 54.5% [1] - The operating revenue for waste disposal was 2.11 billion yuan, a year-on-year increase of 7.6%, with 8.02 million tons of municipal waste processed, up 3% [1] - The company operated 87 waste-to-energy projects by the end of H1 2025, with 23 projects selling steam and 35 projects coordinating sludge disposal, marking an increase from the end of 2024 [1] Group 3: Cash Flow and Dividends - The net cash inflow from operating activities was 910 million yuan, a slight decrease of 20 million yuan year-on-year, mainly due to reduced renewable energy price subsidies [2] - The company announced an interim dividend of 0.1 HKD per share, totaling 164 million yuan [2] - The asset-liability ratio stood at 40.05% at the end of H1 2025, a decrease of 0.23 percentage points year-on-year, indicating ongoing efforts to reduce leverage [2] Group 4: Industry Outlook and Investments - The company's share of profits from joint ventures was 840 million yuan, a year-on-year increase of 19.7%, benefiting from improved competition dynamics in the cement industry [2] - Despite fluctuations in cement prices since May, the company anticipates that supply-side reforms will accelerate, supported by increased infrastructure investment in H2 2025 [2] Group 5: Profit Forecast and Valuation - The company maintains profit forecasts of 2.48 billion yuan, 2.76 billion yuan, and 3.03 billion yuan for 2025-2027 [3] - The company has adjusted its target price upward by 16.6% to 12.12 HKD, based on a valuation of 8.8x 2025 P/E for its environmental business and 9.3x 2025 P/E for its investment in the Conch Group [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) with target prices of HKD 31.85 and RMB 32.97 [7][8] Core Views - The company reported better-than-expected performance in Q2 2025, with a revenue of RMB 222.40 billion, a year-on-year decrease of 8.24%, but a quarter-on-quarter increase of 16.74%. The net profit attributable to shareholders was RMB 25.57 billion, up 40.26% year-on-year and 41.26% quarter-on-quarter, attributed to effective cost control measures [1] - The company plans to distribute its first interim dividend of RMB 0.24 per share (tax included) [1] - The company is expected to benefit from increased infrastructure investment in the second half of 2025, alongside supply-side reforms such as staggered production and capacity management [1] Revenue and Profitability - In the first half of 2025, the company achieved a revenue of RMB 412.92 billion, down 9.38% year-on-year, with a net profit of RMB 43.68 billion, up 31.34% year-on-year [1] - The gross profit per ton of self-produced cement and clinker increased to RMB 70, an increase of RMB 18 year-on-year, primarily due to lower coal costs and proactive cost control [2] - The company’s trading volume of cement and clinker increased by 21.03% year-on-year, generating trading revenue of RMB 5.48 billion, up 16.33% year-on-year [2] Business Segments - The aggregate and concrete business showed mixed results, with aggregate revenue declining by 3.63% to RMB 21.11 billion, while concrete revenue increased by 28.86% to RMB 15.19 billion [3] - The company’s overseas business generated revenue of RMB 28.93 billion, up 14.95% year-on-year, with a notable increase in profitability from overseas operations [3] Financial Health - The company reported a net cash inflow from operating activities of RMB 82.87 billion in the first half of 2025, an increase of RMB 14.16 billion year-on-year [4] - The company’s interest-bearing debt decreased to RMB 280.03 billion, with a debt-to-asset ratio of 20.52%, down 0.8 percentage points from the previous year [4] - The net debt ratio is estimated to be -17.7%, indicating a strong balance sheet [4] Earnings Forecast and Valuation - The company’s net profit forecasts for 2025-2027 are RMB 99.5 billion, RMB 110.5 billion, and RMB 121.3 billion, respectively, with corresponding EPS of RMB 1.88, RMB 2.08, and RMB 2.29 [5] - The target price corresponds to a P/B ratio of 0.9x for 2025, which is below the historical average, reflecting potential short-term pressures in the cement supply-demand balance [5]

Core Viewpoint - The petrochemical industry is currently facing significant "involution" competition, leading to a widespread dilemma of increasing production without increasing profits, with the industry's operating revenue profit margin declining from 8.03% in 2021 to 4.85% in 2024, and remaining low in the first half of 2025 [1] Group 1: Industry Challenges - The low-quality and homogeneous competition is primarily due to excessive investment and repeated construction, resulting in product homogenization, along with local governments' blind investment promotion exacerbating overcapacity [1] - The central government has proposed comprehensive rectification requirements to address these issues, including strengthening self-discipline, promoting innovation, and eliminating non-compliant capacity based on energy efficiency and environmental standards [2] Group 2: Policy Developments - The chemical industry has seen a gradual deepening of anti-involution policies this year, with significant measures introduced such as the "National Unified Market Construction Guidelines" aimed at curbing repeated construction and market segmentation [2] - In June, a joint notice was issued by five ministries to assess old facilities in the refining and fertilizer sectors, focusing on safety, environmental protection, and energy efficiency to promote the exit of inefficient capacity [2] Group 3: Market Outlook - The industry is expected to see opportunities for supply-side reforms in areas with significant homogeneous competition, such as refining and certain pesticide varieties, as state-owned enterprises control capacity and new project approvals are restricted [3] - By August 2025, a recovery in overseas demand for certain chemical products and further domestic demand growth is anticipated, with a focus on investment in sectors with improved supply-demand dynamics and scarce resource attributes, particularly electronic resins [4] Group 4: Price Trends - As of July 2025, the China Chemical Product Price Index (CCPI) reported a decline of 5.6% from the beginning of the year, indicating a slight decrease in the prices of major chemical products [3] - International crude oil prices showed an upward trend in July, with Brent crude rising from $67.11 to $73.24 per barrel, influenced by geopolitical tensions and seasonal fuel consumption [4] Group 5: Sector-Specific Insights - The electronic resin sector is poised for growth due to increasing demand for high-frequency and high-speed copper-clad laminates, with a projected compound annual growth rate of 26% from 2024 to 2026 [5] - The phosphate fertilizer market is experiencing price increases driven by overseas agricultural recovery and supply disruptions, while the pesticide sector is expected to see price recovery due to increased demand and limited supply growth [5][6]

中金公司 周期半月谈——两会政策背景下周期板块的逻辑 演绎 20250310 摘要 Q&A 两会期间财政政策和货币政策对经济的影响有哪些？ 两会期间，财政政策总体符合市场预期，特别国债从去年（2024 年）的 1 万亿 提升到 1.3 万亿，专项地方债从 3.9 万亿提到 4.4 万亿。这些措施在国债和地 方债层面都有所扩展，对经济有一定刺激作用。预算内的赤字率为 4%，加上特 别国债和专项地方债后的广义赤字率接近 8%，这一水平在中国历史上较高，仅 次于 2020 年疫情爆发时的高位。 财政政策从积极转向更加积极，特别国债重 点支持"两重两轻"，即企业端设备以新换旧和居民端消费品以旧换新，如家 • 中国财政政策转向更加积极，广义赤字率接近 8%，为历史较高水平，重点 支持企业设备更新和居民消费品以旧换新，利好汽车、家电等化工下游行 业，有望推动化工品需求增长。 • 货币政策适度宽松但受汇率约束，未来可能择机降准降息以应对出口下行 和物价风险。居民就业和收入偏弱导致储蓄增加，需进一步提振经济。 • 化工行业资本开支已开始下降，预计 2025 年下半年快速扩张产能步入尾声， 有助于行业景气度回升。能源成本下降缓 ...