Group 1 - The core viewpoint is that the building materials sector is expected to reach an inflection point due to accelerated supply-side reforms and declining interest rates, which may restore home buying willingness and capability, thereby stabilizing the real estate market fundamentals [1][3] - The building materials sector shows signs of overall recovery, with profitability improving from the bottom. In the first half of 2025, listed companies in the building materials sector achieved total revenue of 305.53 billion, a year-on-year decrease of 4.9%, while net profit attributable to shareholders was 11.8 billion, a year-on-year increase of 43.7% [1] - The cement industry is recovering due to a rebound in prices, although downstream demand has not yet improved. In the first half of 2025, the cement sector generated revenue of 179.6 billion, down 5.4% year-on-year, but net profit increased significantly to 4.29 billion, up 903.8% year-on-year [1] Group 2 - The glass industry is under pressure, while the glass fiber sector is experiencing a demand recovery. In the first half of 2025, the glass manufacturing sector reported revenue of 22.06 billion, down 18.1%, and a net profit of 530 million, down 72.7% [2] - The glass fiber manufacturing sector achieved revenue of 31.1 billion, up 20.9%, and a net profit of 3.29 billion, up 127.0%, benefiting from structural improvements in downstream demand and price recovery [2] - Leading companies in the consumer building materials sector are starting to recover, while small and medium-sized enterprises are generally under pressure. In the first half of 2025, 37 renovation material companies achieved revenue of 72.76 billion, down 7.7%, and a net profit of 3.7 billion, down 31.1% [2] Group 3 - Investment recommendations suggest focusing on three main lines: high-quality companies benefiting from stock reform, such as Weixing New Materials and Beixin Building Materials; undervalued stocks benefiting from credit risk alleviation, such as Sankeshu and Dongfang Yuhong; and leading cyclical building materials companies with bottoming fundamentals, such as Huaxin Cement and Conch Cement [3]

Investment Rating - The industry rating is "Outperform the Market" [8][69] Core Viewpoints - The recent reduction in personal housing provident fund loan rates and the expected incremental policies are anticipated to boost home buying willingness and ability, thereby stabilizing the real estate market fundamentals [3][6] - The central bank's actions, including a 0.5 percentage point reserve requirement ratio cut and a 0.1 percentage point policy interest rate reduction, are expected to provide long-term liquidity of approximately 1 trillion yuan to the market [3][6] - The report highlights that the real estate sector is gradually entering a bottoming phase after three consecutive years of decline in commodity housing sales area, with increasing sensitivity to policy easing [3][6] Summary by Sections Weekly Insights - On May 7, the People's Bank of China announced a 0.5 percentage point reserve requirement ratio cut and a 0.1 percentage point policy interest rate reduction, along with a 0.25 percentage point decrease in personal housing provident fund loan rates [3][13] - The report outlines various local government initiatives aimed at supporting housing purchases, including increased subsidies for green buildings and multi-child families [3][13] High-Frequency Data - As of May 9, 2025, the national average price of bulk P.O 42.5 cement is 390.0 yuan/ton, showing a 1.3% decrease from the previous week but an 11.5% increase year-on-year [4][14] - The national average price of glass (5.00mm) is 1271.4 yuan/ton, reflecting a 0.3% decrease from the previous week and a 24.7% decrease year-on-year [4][22] Sector Review - The Shanghai Composite Index rose by 1.92%, while the Shenzhen Composite Index increased by 2.88%. The building materials sector index rose by 2.55% [5][55] - Among sub-sectors, refractory materials saw the highest increase at 7.96%, followed by other building materials at 4.44% and cement products at 4.42% [5][55] Investment Recommendations - The report suggests focusing on three main investment lines: high-quality companies benefiting from stock renovations, undervalued stocks with long-term alpha attributes, and leading cyclical building material companies showing signs of bottoming [6][58]