1. Report Industry Investment Rating - No relevant information provided 2. Core View of the Report - The cost of logs is rising, and the price is fluctuating at a high level [1] 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Futures Market Data**: For the 2605 contract on March 18, 2026, the closing price was 806, down 0.7% from the previous day and up 2.2% week - on - week; the trading volume was 5187, down 48.6% from the previous day and up 16% week - on - week; the open interest was 11016, up 3.3% from the previous day and up 34% week - on - week. Similar data for 2607 and 2609 contracts are also presented, with varying price, volume, and open - interest changes [1] - **Spread Data**: The spread between spot and 2605 contract was - 36 on March 18, 2026, down 13.3% from the previous day and up 89% week - on - week. Spreads between different contracts (2605 - 2607, 2605 - 2609, 2607 - 2609) also showed significant daily and weekly changes [1] - **Log Spot Market Data**: The prices of various types of logs in Shandong and Jiangsu markets, such as 3.9 - meter 30 + radiata pine, 5.9 - meter 40 + radiata pine, etc., showed different degrees of daily and weekly price changes, with most prices remaining stable, and only a few showing slight increases or decreases [1] - **Timber Square Spot Market Data**: The median prices of 3 - meter and 4 - meter radiata pine and white pine timber squares in Rizhao, Chongqing, and Zhenjiang also showed different degrees of daily and weekly price changes, with most remaining stable and a small number showing slight decreases [1] 3.2 Macro and Industry News - The 2026 government work report focuses on stabilizing expectations, adjusting the structure, preventing risks, and promoting reforms. The GDP growth target is adjusted from "around 5%" to "4.5% - 5.0%", and the scale of policy - based financial instruments is increased [3] - Five departments in Shanghai, including the Shanghai Municipal Commission of Housing and Urban - Rural Development and the Shanghai Housing Administration Bureau, jointly issued a notice on February 25, 2026, to further optimize and adjust the local real estate policy, which came into effect on February 26, 2026 [3] 3.3 Trend Intensity - The trend intensity of logs is 0, with the value ranging from - 2 to 2, indicating a neutral view [4]

Group 1: Investment Rating - No investment rating information provided in the report. Group 2: Core View - The cost of iron ore is rising, leading to a rebound in ore prices [1]. Group 3: Summary by Directory 1. Fundamental Tracking - **Futures Data**: The closing price of I2605 was 784.5 yuan/ton, up 12.5 yuan/ton (1.62%). The position was 473,257 hands, a decrease of 14,997 hands [1]. - **Spot Price**: The prices of various iron ore types increased. For example, the price of Carajás fines (65%) rose from 896.0 to 905.0 yuan/ton, and the price of PB fines (61.5%) rose from 764.0 to 773.0 yuan/ton [1]. - **Basis and Spread**: The basis of I2605 against Super Special decreased by 1.7 yuan/ton, and the basis against Jimbara decreased by 3.9 yuan/ton. The spread between I2605 - I2609 increased by 1.0 yuan/ton, and the spread between I2609 - I2701 decreased by 0.5 yuan/ton [1]. 2. Macro and Industry News - In 2025, China imported 570,000 tons of iron ore from Iran, accounting for 0.45% of the total annual imports. If the US - Iran conflict persists, energy costs may increase and affect iron ore prices through freight [1]. - The 2026 government work report aims to stabilize expectations, adjust the structure, prevent risks, and promote reform. The GDP growth target was adjusted from "around 5%" to "4.5% - 5.0%", and the scale of policy - based financial instruments was increased [2]. - The daily average hot metal output of 247 steel enterprises was 227.59 tons, a decrease of 5.69 tons compared with the previous period [2]. - Five departments in Shanghai jointly issued a notice to optimize and adjust real - estate policies, which took effect on February 26, 2026 [2]. 3. Trend Intensity - The trend intensity of iron ore is 1, indicating a relatively neutral trend [2].

Group 1 - The core viewpoint of the article highlights the active performance of certain Chinese real estate stocks, with notable increases in share prices for companies such as Jin Hui Holdings (up 6.29% to HKD 1.52), R&F Properties (up 6.12% to HKD 0.52), and others [1][1][1] - Xiangcai Securities suggests that the optimization of purchase restrictions and housing fund loan policies in Shanghai before March is expected to stimulate demand, activating the second-hand housing replacement chain and boosting market confidence [1][1][1] - The article mentions that Open Source Securities identifies three main focuses for the real estate sector in 2026: valuation recovery at the policy bottom, premium pricing for quality properties, and attention to rental yield recovery in core cities [1][1][1] Group 2 - The article notes that the real estate sector is anticipated to have speculative opportunities in March, particularly regarding the expected incremental policies from the Two Sessions and the performance of sales data during the "small spring" [1][1][1] - The emphasis on developers with mature systems and high-end product lines suggests that these companies will benefit from sales premiums and gross margin advantages due to quality differentiation [1][1][1] - The article also highlights the importance of learning from Hong Kong's "industry-population-rent" transmission path, indicating a potential demand for asset allocation driven by rental yield recovery in key cities [1][1][1]

Core Viewpoint - The article discusses the recent adjustments in Shanghai's real estate policies, referred to as "沪七条," which have positively impacted the housing market by activating potential buyers and increasing market confidence [1][9]. Group 1: Policy Adjustments - Shanghai's "沪七条" includes seven measures aimed at optimizing real estate policies, focusing on adjustments in purchase restrictions, public housing fund enhancements, and property tax improvements [1]. - Following the policy announcement, there was a significant increase in online inquiries for new homes, with a 106% rise in consultation volume and an 80% increase compared to the previous month [1][10]. Group 2: Market Response - The market response was evident with a surge in foot traffic at sales offices, particularly from buyers in Wenzhou, indicating a revival of the "Wenzhou property speculation group" [3][5]. - Notable sales figures were reported by various developers, with some projects achieving significant transaction volumes shortly after the policy announcement, such as 2.5 billion yuan in sales over a week [9]. Group 3: Buyer Behavior - The "Wenzhou property speculation group" is characterized by a more rational investment approach, focusing on high-quality assets in core cities, influenced by the recent policy changes [5][6]. - The article highlights that many buyers who were previously hesitant due to market conditions are now actively seeking properties, as evidenced by increased inquiries and sales conversions [10]. Group 4: Future Market Outlook - Analysts predict a warm spring market in March, driven by the positive signals from "沪七条," traditional seasonal demand, and the release of pent-up demand from earlier in the year [10]. - The balance of power in negotiations is shifting towards sellers, indicating a potential increase in property prices if the current trends continue [10].

Summary of Conference Call Notes Industry Overview - The real estate industry is currently facing significant pressure, with a focus on risk prevention related to real estate and its associated sectors [4][8]. Key Insights and Arguments - **New and Second-hand Housing Transactions**: - In 40 cities, new housing transaction area decreased by 65.2% month-on-month and 79.1% year-on-year [1] - In 18 cities, second-hand housing transaction area decreased by 68.8% month-on-month and 77.6% year-on-year [1] - **Inventory and Absorption**: - In 12 cities, new housing inventory area decreased by 0.2% month-on-month and 4.3% year-on-year [1] - The absorption cycle is 21.3 months, which is an increase of 1.4 months month-on-month and 7.4 months year-on-year [1] - **Land Transactions**: - In 100 cities, land transaction area decreased by 44.3% month-on-month and 49.4% year-on-year [1] - The average land price decreased by 26.2% month-on-month and 52.9% year-on-year, with a premium rate of 3.65%, which is an increase of 1.7 percentage points month-on-month and a decrease of 0.3 percentage points year-on-year [1] Policy Changes - **Shanghai's New Policies**: - Adjustments to purchase restrictions for non-local residents based on social security or tax contributions [2] - Increase in the maximum public housing loan limit from 1.6 million to 2.4 million yuan, with potential increases for families with multiple children [2] - Adjustments to property tax regulations for certain buyers [2] Market Expectations - The new policies are expected to increase purchasing eligibility and lower costs, potentially boosting transaction volumes in the short term, though sustainability remains uncertain [3] - The market is experiencing a downward trend, with bearish expectations that may prompt quicker policy responses [5] Investment Recommendations - The real estate sector is anticipated to present significant opportunities in 2026, with two potential turning points: a "policy turning point" around the end of Q1 and a "fundamental turning point" around Q4 [6] - Early positioning for the "policy turning point" is advised, while the "fundamental turning point" may offer longer-lasting opportunities as demand improves and price declines stabilize [6] - Suggested companies for investment include China Resources, Binjiang, and others that are adapting to new consumption trends [7] Risk Factors - Risks include policies not meeting expectations, continued decline in sales and housing prices, and slower-than-expected recovery in market confidence [8]

Group 1 - The core viewpoint of the article emphasizes the importance of the upcoming "Two Sessions" in China, which will set the economic direction for the year and discuss key themes such as economic growth targets and the "14th Five-Year Plan" [3][4][8] - The average GDP growth target for 31 provinces is set at around 5%, with many provinces adjusting their targets more conservatively compared to previous years, indicating a shift towards a more pragmatic approach to economic growth [11][14] - The focus on new and future industries, particularly in artificial intelligence, green energy, and digital economy, is highlighted as a key area of development, with various provinces outlining specific growth targets and initiatives [16][20] Group 2 - The article outlines three main strategies for boosting consumer spending, including enhancing consumer capacity, stimulating service consumption, and optimizing new policies to support consumption [28][29][31] - The concept of "investing in people" is emphasized as a central theme in macroeconomic policies, focusing on enhancing human capital through education, healthcare, and social services [33][36][37] - The article discusses the evolving business environment in China, shifting from tax incentives to deeper institutional guarantees, with a focus on intellectual property protection and fostering innovation [39][43][44] Group 3 - In the real estate sector, the article notes a dual approach to stabilize the market, focusing on revitalizing existing inventory and promoting the construction of quality housing [55][56] - The upcoming "Two Sessions" are expected to provide significant signals regarding the future economic path and policy directions for the next five years, particularly in relation to the "14th Five-Year Plan" [57]

Investment Rating - The report maintains an "Overweight" rating for the construction materials industry [1] Core Insights - The construction materials sector has shown a weekly increase of 4.42%, outperforming the CSI 300 and Wind All A indices by 3.34% and 1.67%, respectively [4] - The report highlights the potential for price increases in construction materials driven by rising costs of basic metals and crude oil, suggesting a focus on companies benefiting from overseas demand expansion and domestic consumption [4][5] - The report emphasizes the importance of monitoring the recovery of the real estate market, with signs of stabilization in second-hand housing transactions and potential improvements in profit margins for many companies [4] Summary by Sections 1. Bulk Construction Materials Fundamentals and High-Frequency Data - **Cement**: The national average price for high-standard cement is 338.5 CNY/ton, down 2.7 CNY/ton from last week and down 50.3 CNY/ton from the same period in 2025. The average cement inventory ratio is 64.1%, down 1.3 percentage points from last week but up 6.9 percentage points year-on-year [11][20] - **Glass**: The average price for float glass is 1164.6 CNY/ton, up 7.0 CNY/ton from last week but down 222.2 CNY/ton from the same period in 2025. Inventory levels have increased by 1565 million heavy boxes compared to last week [44][50] - **Fiberglass**: The market price for non-alkali fiberglass remains stable, with average prices around 3603.50 CNY/ton. The demand for fiberglass is expected to maintain steady growth, supported by wind power and new applications [6] 2. Industry Dynamics Tracking - The report notes that the cement industry is undergoing supply-side adjustments, with a focus on eliminating outdated capacity. The effective capacity for cement is projected to improve, leading to potential price elasticity during peak demand seasons [6] - The glass industry is experiencing a supply contraction, which may provide price elasticity for float glass in the first half of 2026. The report anticipates a rebound in prices as inventory levels decrease following seasonal demand increases [6] - The fiberglass sector is expected to see stable growth in demand, particularly in high-end applications, which may enhance profitability for leading companies [6] 3. Weekly Market Review and Sector Valuation - The report provides a detailed review of price changes and inventory levels across various regions for cement and glass, indicating regional disparities in market performance [20][21] - It highlights the importance of monitoring the competitive landscape and potential shifts in market dynamics due to policy changes and economic conditions [5][6]

Investment Rating - The report maintains an "Overweight" rating for the real estate sector [1] Core Insights - The Shanghai government has relaxed housing purchase restrictions, which is expected to positively impact sales [8] - The real estate sector has shown signs of recovery, with both new and second-hand home sales experiencing a rebound compared to previous weeks [8] - The report emphasizes the importance of financially stable and well-performing leading real estate companies as key investment targets [8] Summary by Sections Weekly Market Review - The Shenwan Real Estate Index increased by 0.51%, while the CSI 300 Index rose by 1.08%, indicating underperformance of the real estate sector compared to the broader market [4][13] Industry Fundamentals - In the week of February 20-26, 2026, 7,098 new homes were sold across 38 key cities, reflecting a year-on-year decline of 72.9% but a month-on-month increase of 43.8% [23] - The total transaction area for new homes was 695,000 square meters, with a year-on-year decrease of 73.7% and a month-on-month increase of 39.9% [23] - For second-hand homes, 6,706 units were sold, showing a year-on-year decline of 68.3% but a month-on-month increase of 185.2% [37] Inventory Situation - The total inventory of commercial housing in 17 key cities was 186,786,000 square meters, with a slight month-on-month decrease of 0.1% and a depletion cycle of 174.1 weeks [50]

Core Viewpoint - The new real estate policy in Shanghai aims to stimulate demand by lowering purchase thresholds for non-local residents and enhancing financial support through increased public housing fund loan limits, which is expected to activate the housing market significantly [1][2][3] Group 1: Policy Adjustments - The new policy reduces the social security or tax payment requirement for non-local residents from 3 years to 1 year for purchasing homes within the outer ring, allowing those with 3 years of payments to buy an additional unit, and those with a 5-year residence permit to purchase one unit citywide [1] - The policy systematically lowers the purchasing barriers in core areas, particularly benefiting regions like Jing'an and Xuhui, which have stable housing prices [1] - The policy is expected to release over 90,000 new residents' purchasing potential, as non-local residents accounted for 40%-45% of second-hand home transactions in 2025 [1] Group 2: Financial Support Enhancements - The public housing fund loan limit for first-time homebuyers has been raised from 1.6 million to 2.4 million, with potential increases for families with multiple children (+20%) and green buildings (+35%), reaching a maximum of 3.24 million, the highest in the country [2] - The policy also relaxes loan recognition criteria, allowing families with cleared loans and limited housing to apply for new public housing loans, thereby releasing improvement demand [2] - Analysts predict that the new policy will stabilize demand for high-priced properties in core areas, with expectations of improved market data starting in March [2] Group 3: Market Expectations - The policy is anticipated to repair the replacement chain and promote "sell old buy new" demand by reducing costs associated with property exchanges, such as tax exemptions for families with adult children purchasing their only home [3] - Data shows a significant increase in second-hand residential transactions in January 2026, with a year-on-year growth of 26.69%, indicating a rise in market activity following the policy implementation [3] - The industry expects a "small spring" in the market during March and April, with core area prices stabilizing and property valuations recovering, providing a reference model for national policies [3]

Market Performance - On February 25, 2026, the equity market saw most sectors rise, with the Shanghai Composite Index and Shenzhen Composite Index increasing by 0.72% and 1.21% respectively, while the CSI 300 and CSI 500 rose by 0.60% and 1.60% respectively [1] Individual Stock Performance - The top five gainers in the real estate sector were Huangting International, I Love My Home, Hualian Holdings, City Investment Holdings, and Zhujiang Shares, with increases of 10.05%, 10.03%, 9.96%, 9.96%, and 6.77% respectively [2] - The largest decliners included Hefei Urban Construction, Sanxiang Impression, Ningbo Fuda, Jinqiao B Share, and Haitai Development, with declines of -5.33%, -1.52%, -1.13%, -0.53%, and -0.45% respectively [2] Industry News - On February 25, 2026, five departments in Shanghai announced a reduction in housing purchase restrictions, effective February 26, 2026. Non-Shanghai residents can now purchase homes in the outer ring with a social security or tax payment history of just 1 year, and those with 3 years can buy an additional property [3] - The maximum housing provident fund loan for first-time homebuyers has been increased from 1.6 million yuan to 2.4 million yuan. Additionally, families with multiple children can receive a 20% increase in the maximum loan amount for purchasing a second home [3] - From January 1, 2026, adult children of local residents purchasing their only home will be exempt from personal housing property tax [4] Company Announcements - China Overseas Macro Real Estate Group announced that the buyback registration period for "23 Hongyang 02" bonds is from March 2 to March 9, 2026, with the repayment date set for April 3, 2026 [6] - Poly Real Estate Group announced the early delisting of "23 Baozhi 01" bonds, with a total buyback amount of 1 billion yuan. The bonds will be canceled due to this buyback [6]