Investment Rating - The report maintains an "Overweight" rating for both the construction and building materials sectors [10]. Core Viewpoints - The construction and building materials sector is expected to experience a spring rally in 2026, driven by improvements in construction PMI, order volume, and favorable market conditions such as a later Spring Festival and strong domestic excavator sales [13][19]. - The report emphasizes the importance of high dividend and price-increasing stocks, recommending companies with stable performance and high dividend yields, as well as traditional building materials with price increase potential [13][19]. - The report identifies three main investment themes: sustainable growth in renovation, thorough industry clearing in construction materials, and opportunities in high-quality leading companies in various segments [14][21]. Summary by Sections Industry Overview - The report highlights a potential spring rally for the building materials sector, supported by fiscal improvements and strong domestic machinery sales [19]. - Historical data shows that the building materials index has a high probability of outperforming the market in Q1, with a 57% chance of rising based on past performance [15]. Key Companies and Recommendations - The report recommends several companies, including China Chemical, China National Materials, and Xinyi Glass, with target prices and buy ratings [10][38]. - Specific recommendations include: - China Chemical (601117 CH) - Target Price: 12.05 - China National Materials (600970 CH) - Target Price: 14.23 - Xinyi Glass (868 HK) - Target Price: 9.54 - Others include China United Plastic, Jinggong Steel Structure, and Dongfang Yuhong [10][38]. Market Dynamics - Recent data indicates a 1.2% week-on-week increase in national cement prices, while the average price of float glass has risen by 2.3% [2][28]. - The report notes that the domestic float glass market is stabilizing, with some regions experiencing price increases due to supply constraints [28][30]. - The electronic fabric market is also showing signs of price increases, driven by demand from PCB clients [25][33]. Future Outlook - The report anticipates continued demand in the cleanroom engineering and special electronic fabric sectors, with a focus on companies that can adapt to new production capabilities and traditional industry upgrades [14][19]. - The construction sector is expected to benefit from urban renewal initiatives and the ongoing recovery of the real estate market, with a focus on renovation and construction materials [21][22].