Investment Rating - The report maintains an "Accumulate" rating for the building materials industry [1] Core Views - The short-term economic downturn is causing the real estate chain to hover at the bottom, but the overall direction remains positive with expectations for recovery in the home improvement sector by Q3 2025 [3][4] - The cement market is experiencing a slight price decline, with a national average price of 387.7 RMB/ton, down 3.2 RMB/ton from last week, but up 29.7 RMB/ton year-on-year [3][19] - The report highlights the potential for recovery in demand for building materials, driven by government policies aimed at stabilizing the real estate market and boosting domestic consumption [15] Summary by Sections 1. Sector Overview - The building materials sector saw a decline of 2.14% this week, underperforming the CSI 300 index, which fell by 0.43% [3] - The report emphasizes the importance of low-valuation leading companies and expansion-oriented firms, recommending companies like Beixin Building Materials and SanKeTree [3][4] 2. Bulk Building Materials Fundamentals and High-Frequency Data 2.1 Cement - The national cement market price has decreased by 0.8% this week, with regional price fluctuations observed [18] - The average cement inventory level is at 61.7%, down 0.1 percentage points from last week, while the average shipment rate is 49.5%, up 2.1 percentage points week-on-week [27] - The report anticipates a weak and fluctuating price trend in the near future due to weak market demand [18][19] 2.2 Glass Fiber - The glass fiber industry is expected to see a gradual recovery in profitability, with demand in wind power and thermoplastics continuing to grow [12] - The report notes that leading companies are likely to benefit from structural advantages in product offerings [12] 2.3 Glass - The glass industry is currently facing a weak balance between supply and demand, with slow inventory depletion [13] - The report suggests that the profitability of the glass sector remains at a low point, but may improve with supply adjustments [14] 3. Industry Dynamics Tracking - The report discusses the impact of external uncertainties such as tariffs and trade tensions, which are expected to enhance domestic demand expectations [15] - It highlights the government's commitment to stabilizing the real estate market and the anticipated positive effects of new policies on home improvement consumption [15] 4. Weekly Market Review - The report provides a detailed analysis of price changes in the cement market, with specific regional price movements noted [20] - It also includes a summary of the performance of various companies within the building materials sector, emphasizing the potential for valuation recovery [16][17]

Investment Rating - The report maintains an "Accumulate" rating for the building materials industry [1] Core Views - The short-term economic downturn is causing the real estate chain to hover at the bottom, but the overall direction remains positive with expectations for recovery in the home improvement sector by Q3 2025 [3][4] - The cement market is experiencing a slight price decline, with the national average price at 387.7 RMB/ton, down 3.2 RMB/ton from last week but up 29.7 RMB/ton year-on-year [3][19] - The report highlights the potential for recovery in demand for building materials, driven by government policies aimed at stabilizing the real estate market and boosting domestic consumption [15] Summary by Sections 1. Industry Overview - The building materials sector saw a decline of 2.14% this week, underperforming the CSI 300 index, which fell by 0.43% [3] - The report emphasizes the importance of low-valuation leading companies and expansion-oriented firms as key investment targets [3][4] 2. Bulk Building Materials Fundamentals and High-Frequency Data 2.1 Cement - The national cement market price has decreased by 0.8% this week, with regional variations noted [18] - The average cement inventory level is at 61.7%, down 0.1 percentage points from last week [27] - The report anticipates a weak but stable price trend moving forward due to ongoing supply-demand adjustments [4][18] 2.2 Glass Fiber - The glass fiber industry is expected to see a gradual recovery in profitability, with demand from wind power and thermoplastics sectors continuing to grow [12] - The report suggests that leading companies may benefit from structural advantages and cost efficiencies [12] 2.3 Glass - The glass industry is currently facing a weak balance between supply and demand, with slow inventory depletion [13] - The report indicates that rising costs from petroleum coke may impact profitability, but leading companies are expected to maintain competitive advantages [14] 3. Industry Dynamics Tracking - The report notes that government policies are increasingly focused on stimulating domestic demand and stabilizing the real estate market, which is expected to positively impact the building materials sector [15] - The anticipated implementation of "old-for-new" policies in 2025 is expected to further boost demand for home improvement materials [15] 4. Weekly Market Review - The report provides a detailed analysis of price changes in the cement market, highlighting significant regional differences [20] - It also includes a summary of the performance of various building materials companies, emphasizing those with strong growth potential and competitive advantages [16][17]

Investment Rating - The report maintains an investment rating of "Outperform the Market-A" for the construction industry [5]. Core Viewpoints - The escalation of the US-China trade war, with a 34% tariff imposed on Chinese goods, is expected to increase domestic pressure on exports, leading to a focus on expanding domestic demand and stabilizing investment. This may result in enhanced infrastructure policies to counteract export pressures, particularly in sectors such as road and bridge construction, water conservancy, rail transit, and municipal projects [1][13]. - In March, the manufacturing PMI, non-manufacturing PMI, and composite PMI rose to 50.5%, 50.8%, and 51.4%, respectively, indicating a marginal recovery in the economy. The construction PMI increased to 53.4%, reflecting accelerated construction activities due to favorable weather and increased project progress [2][14]. - The report anticipates a positive fiscal policy for 2025, with increased support for infrastructure investment and ongoing debt reduction policies, which are expected to improve the fundamentals of the construction sector. Central enterprises in the infrastructure sector are projected to see significant cash flow improvements due to these policies [3][15]. Summary by Sections Industry Dynamics - The US has imposed a 34% tariff on Chinese goods, which, combined with previous tariffs, is expected to pressure domestic exports and shift focus towards domestic demand and investment stabilization [1][13]. - The construction sector is expected to benefit from increased infrastructure investment as a countermeasure to export pressures, with key areas including road and bridge construction, water conservancy, rail transit, and municipal projects [1][13]. Market Performance - The construction industry experienced a slight decline of 0.27% in the week from March 31 to April 3, outperforming the broader market indices [16]. - The steel structure sector showed strong performance with a weekly increase of 3.49% [16]. Key Investment Targets - The report suggests focusing on undervalued construction central enterprises such as China State Construction, China Communications Construction, China Railway Construction, and China Railway Group, which are expected to benefit from improved operational metrics and market management [8][10]. - It also highlights the potential of leading design firms in the infrastructure sector, which are well-positioned to benefit from fiscal policy enhancements and debt reduction measures [9][10]. Company Announcements - Significant contracts were announced, including a project worth 31.63 billion yuan by Yaxiang Integrated and a contract worth approximately 9.6 billion yuan by China Energy Construction [29]. Industry Valuation - As of April 3, the construction and decoration industry had a TTM price-to-earnings ratio of 9.76 and a price-to-book ratio of 0.78, indicating relatively low valuations compared to other sectors [21]. - The report identifies the lowest PE ratios in the industry, with China State Construction at 4.36 and China Communications Construction at 0.54 [21][23].