Core Viewpoint - The sustainable profitability of the cement industry is crucial for its high-quality development, necessitating measures to curb low-price dumping, establish a fair market competition environment, and regulate market order [1][2]. Group 1: Industry Challenges - The cement industry faces a significant imbalance between supply and demand, with domestic demand expected to decline over the next 5 to 10 years, making it imperative to achieve supply-demand balance for price recovery and profitability [2]. - There is an issue of overcapacity in the cement industry, exacerbated by a competitive environment characterized by low-price sales below cost, leading to increased losses among enterprises [1][2]. Group 2: Policy Measures - The recently introduced "Construction Materials Industry Steady Growth Work Plan (2025-2026)" provides a clear development path for the cement industry, emphasizing the need for self-discipline and peak production scheduling to control output and stabilize growth [2][3]. - The plan advocates for strict policy implementation, integrity in business operations, and a focus on industry health, promoting the idea that industry benefits should take precedence over individual enterprise interests [3]. Group 3: Future Directions - The industry is encouraged to shift its competitive focus from price wars to quality, technology, service, and green low-carbon initiatives, which will enhance overall productivity and provide sustained momentum for stable development [3].

Core Viewpoint - The cement industry has experienced stagnant revenue but significant profit growth in the first three quarters of the year, highlighting the need for further actions to maintain this performance amid overcapacity and declining prices [2][3]. Group 1: Company Performance - Jinyu Jidong reported a slight revenue increase of 0.1% to 18.575 billion yuan, while net profit surged by 113.6% to 40.35 million yuan, attributed to reduced costs from falling coal and raw material prices [2]. - Conch Cement's revenue decreased by 10.06% to 61.298 billion yuan, but net profit rose by 21.28% to 6.305 billion yuan, driven by enhanced cost control [3]. - Huaxin Cement achieved a revenue of 25.033 billion yuan, a 1.27% increase, with net profit soaring by 76.01% to 2.004 billion yuan, benefiting from rising domestic cement prices [3]. - Tapai Group's revenue slightly declined by 0.49% to 2.916 billion yuan, while net profit increased by 54.23% to 588 million yuan, supported by improved sales and cost control measures [4]. Group 2: Price Trends and Market Dynamics - Cement prices have been on a downward trend since April, reaching a near nine-year low, with only the first quarter supporting profit growth [2][5]. - The national cement price index dropped nearly 19% from approximately 394 at the beginning of the year to 320 by the end of September [4]. - The average selling price of cement has decreased less than the drop in coal prices, allowing for some profit margin retention [4]. Group 3: Industry Challenges and Strategies - The cement industry is facing a supply-demand imbalance, leading to intensified competition and price declines [5][8]. - The implementation of staggered production has been a key strategy for the industry, with companies showing varying levels of compliance [6][7]. - The cyclical nature of demand and the industry's response to price fluctuations have created a cycle of self-regulation and competitive pressure [8].

Report Investment Rating - No investment rating information provided in the report Core Views - For the steel sector, although the apparent demand for rebar has rebounded this week, it remains weaker than the same period last year. Rebar production has increased, but the decline in total inventory is slow. Hot-rolled coil inventory has significantly increased and is now much higher than the same period. Coke and coking coal prices are strong, providing some support for costs. However, due to the sharp decline in steel mill profits and the approaching end of the consumption peak, steel mills may reduce production, potentially triggering a negative feedback loop. Technically, the futures prices of rebar and hot-rolled coil have closed above the 10-day moving average for two consecutive days, indicating a possible end to the downward trend [2]. - For the iron ore sector, the high iron ore demand is supported by the high iron output of sample steel mills. However, due to the decline in steel mill profits, steel mills may reduce production, which will suppress raw material prices. On the supply side, global shipments are at a high level, and the increase in port inventories during the peak consumption season has a certain suppressing effect on futures prices. The slow destocking of steel inventories also dampens the overall market sentiment. Technically, the 01 contract has rebounded slightly, and there are resistances at the 60-day and 10-day moving averages. Attention should be paid to whether it can break through these two important resistance levels [5]. Summary by Directory I. Rebar and Hot-Rolled Coil - **Supply and Demand**: This week's data shows that the apparent demand for rebar continues to rebound but is weaker than the same period last year. Rebar production has increased, but the total inventory decline is slow. Hot-rolled coil inventory has significantly increased and is much higher than the same period. Coke and coking coal prices are strong, providing some support for costs. However, due to the sharp decline in steel mill profits and the approaching end of the consumption peak, steel mills may reduce production, potentially triggering a negative feedback loop [2]. - **Technical Analysis**: On the daily K-line chart, the futures prices of rebar and hot-rolled coil have closed above the 10-day moving average for two consecutive days, indicating a possible end to the downward trend [2]. - **Operation Suggestion**: Short positions can be held lightly, and profits should be taken in a timely manner when the price drops [2]. - **Data Summary**: - **Prices**: Rebar and hot-rolled coil futures and spot prices have increased to varying degrees. For example, the closing price of the rebar main contract is 3,071 yuan/ton, up 0.10% from the previous day and 0.72% from last week [3]. - **Production**: The national building materials steel mill rebar production is 207.07 million tons, an increase of 5.91 million tons from last week, a growth rate of 2.94%. Hot-rolled coil production is 322.46 million tons, an increase of 0.62 million tons from last week, a growth rate of 0.19% [3]. - **Inventory**: The five major varieties of social inventory are 1,099.7 million tons, a decrease of 26.14 million tons from last week, a decline of 2.32%. Rebar social inventory is 437.48 million tons, a decrease of 18.93 million tons from last week, a decline of 4.15%. Hot-rolled coil social inventory is 337.57 million tons, a decrease of 3.77 million tons from last week, a decline of 1.10% [3]. - **Apparent Demand**: The apparent demand for the five major varieties is 892.73 million tons, an increase of 17.32 million tons from last week, a growth rate of 1.98%. Rebar apparent demand is 226.01 million tons, an increase of 6.26 million tons from last week, a growth rate of 2.85% [3]. II. Iron Ore - **Supply and Demand**: High iron ore demand is supported by the high iron output of sample steel mills. However, due to the decline in steel mill profits, steel mills may reduce production, which will suppress raw material prices. On the supply side, global shipments are at a high level, and the increase in port inventories during the peak consumption season has a certain suppressing effect on futures prices. The slow destocking of steel inventories also dampens the overall market sentiment [5]. - **Technical Analysis**: The 01 contract has rebounded slightly, and there are resistances at the 60-day and 10-day moving averages. Attention should be paid to whether it can break through these two important resistance levels [5]. - **Operation Suggestion**: Short positions can be continued to be held [5]. - **Data Summary**: - **Prices**: Iron ore spot and futures prices have increased to varying degrees. For example, the settlement price of the DCE iron ore main contract is 777 yuan/dry ton, up 0.39% from the previous day and 0.45% from last week [5]. - **Shipments**: Australian iron ore shipments are 1,729.5 million tons, an increase of 65.3 million tons from last week, a growth rate of 3.92%. Brazilian iron ore shipments are 749 million tons, an increase of 22.1 million tons from last week [5]. - **Inventory**: Port inventories are 14,278.27 million tons, an increase of 253.77 million tons from last week, a growth rate of 1.81%. The inventory of imported sintered powder ore in 64 sample steel mills is 1,291.42 million tons, a decrease of 0.44 million tons from last week, a decline of 0.03% [5]. III. Industry News - **Coal**: Mongolian coal imports have decreased significantly due to political struggles in Mongolia. On Wednesday, the number of customs clearance vehicles at the Ganqimaodu Port was 570, a decrease of 43.95% compared to the average daily number in October, and it is expected to gradually recover next week [6]. - **Cement**: In the fourth quarter, the intensity of staggered production in the cement industry has increased, and the monthly average kiln shutdown in some areas exceeds 20 days. Recently, cement prices in many places have shown an upward trend [6]. - **Steel Inventory**: In mid-October, the social inventory of steel products in 21 cities was 9.36 million tons, a decrease of 100,000 tons from the previous period, a decline of 1.1%. The inventory fluctuated slightly [7]. - **Coking Coal**: The utilization rate of the approved production capacity of 523 coking coal mine samples was 85.1%, a decrease of 2.3% from the previous period. The daily average output of raw coal was 1.91 million tons, a decrease of 51,000 tons from the previous period [7]. - **Rebar**: As of the week of October 23, rebar production increased from a decline, and the factory and social inventories decreased for two consecutive weeks, while the apparent demand increased for two consecutive weeks [7]. - **Iron Ore Production**: In the third quarter of 2025, the iron ore output of Fortescue Metals Group was 50.8 million tons, a decrease of 7% from the previous quarter and an increase of 6% from the same period last year [8]. - **Global Steel Production**: In September 2025, global crude steel production decreased by 1.6% year-on-year to 141.8 million tons. China's steel production was 73.49 million tons, a year-on-year decrease of 4.6% [8]. - **Glass Inventory**: As of October 23, the total inventory of national float glass sample enterprises was 66.613 million heavy boxes, an increase of 2.337 million heavy boxes or 3.64% from the previous period, an increase for three consecutive weeks after the festival, reaching a three-month high [8].

Group 1 - China National Building Material (CNBM) shares rose over 6%, reaching HKD 5.99 with a trading volume of HKD 136 million [1] - The company issued a profit warning, expecting a profit of approximately RMB 2.95 billion for the nine months ending September 30, 2025, compared to a loss of RMB 684 million in the same period last year [1] - The expected profit increase is attributed to lower sales costs of cement and ready-mixed concrete, higher selling prices and lower costs of fiberglass, increased sales of wind turbine blades and coatings, higher profits from joint ventures, and increased net income from fair value changes of financial assets [1][1][1] Group 2 - The Ministry of Industry and Information Technology held a meeting to discuss growth stability in the cement industry, emphasizing the role of leading enterprises in implementing capacity replacement and regulation policies [1] - By the end of 2025, companies are required to develop capacity replacement plans for excess registered capacity, promoting alignment between actual and registered capacity [1] - Industry associations are encouraged to enhance self-discipline, conduct supply-demand balance research, organize staggered production, and provide average cost research to assist operators in reasonable pricing and prevent unfair competition [1][1][1]

Group 1 - China National Building Material (03323) shares rose over 6%, currently up 6.02% at HKD 5.99, with a trading volume of HKD 136 million [1] - The company issued a profit warning, expecting a profit of approximately RMB 2.95 billion for the nine months ending September 30, 2025, compared to a loss of approximately RMB 684 million in the same period last year [1] - The expected profit increase is primarily due to lower sales costs of cement and ready-mixed concrete, higher sales prices and lower costs of fiberglass, increased sales of wind turbine blades and coatings, higher profits from joint ventures, and increased net income from changes in the fair value of financial assets recognized in profit or loss, partially offset by a decline in cement sales [1] Group 2 - The Ministry of Industry and Information Technology held a meeting to discuss growth stability in the cement industry, emphasizing the role of leading enterprises in implementing capacity replacement and regulation policies [1] - By the end of 2025, companies are required to develop capacity replacement plans for excess registered capacity, promoting alignment between actual and registered capacity [1] - Industry associations are encouraged to enhance self-regulation, conduct supply-demand balance research, organize staggered production in the cement industry, and provide average cost research to assist operators in reasonable pricing, preventing unfair competition such as selling below cost [1]

Summary of Cement Industry Conference Call Industry Overview - The cement industry is expected to see profits drop from an initial forecast of 40 billion to over 30 billion in 2025 due to weather conditions, funding shortages, and staggered production impacts [1][5][11] - The Ministry of Industry and Information Technology (MIIT) has proposed to address overproduction indicators by the end of the year and promote capacity replacement, with a current plan for 61 million tons of capacity replacement [1][5] Key Points on Cement Prices - Attempts to raise cement prices since late August have been largely unsuccessful, with only the Southwest and Central South regions seeing significant increases in September [1][3] - The East China Yangtze River Delta region has not seen price increases due to poor cooperation among companies and inadequate staggered production execution [1][3][4] - Overall, cement prices are expected to fluctuate upwards in Q4, with regional performance varying significantly [1][9] Demand and Supply Dynamics - The cement market has entered a traditional demand peak season, but actual demand remains weak, with a shipment rate of around 45% compared to 50%-55% in the previous year [2][11] - Factors affecting demand include adverse weather conditions and funding shortages for ongoing projects [2][11] - National cement production is projected to decline by approximately 5% year-on-year, with price performance hindered by inconsistent cooperation among major companies [11] Policy Impacts - The MIIT has issued a growth stabilization plan for the building materials industry, emphasizing the need to complete overproduction indicators by the end of 2025 [5][7] - Carbon emission quotas for 2024-2025 will continue to be allocated for free, with a likely standard set around 0.8, which will not impose significant short-term restrictions on the industry [8][12] Importance of Industry Self-Regulation - Industry associations are encouraged to strengthen self-regulation and organize staggered production to address market oversupply and weak demand [6][7] - The effectiveness of staggered production is hindered by poor cooperation among companies, particularly in the Yangtze River Delta region [6][11] Future Demand Projections - Cement demand is expected to decline by 6%-7% in 2025, stabilizing in 2026 as the real estate market enters a recovery phase [12][13] - Long-term projections suggest that demand could decrease to around 15 billion tons by 2030 [13] Regional Performance and Capacity Management - Regional differences in capacity replacement indicators are influenced by local government priorities and company responsiveness [16] - The implementation of staggered production policies is crucial for balancing supply and demand in the short term [14][20] Monitoring and Regulatory Developments - The establishment of an online monitoring system is underway, with plans for nationwide rollout in 2026 [21][27] - Future regulatory measures will need to align with carbon trading systems to ensure effective management and control [22][26] Conclusion - The cement industry faces significant challenges in terms of profitability, demand, and regulatory compliance, necessitating enhanced cooperation among companies and effective policy implementation to stabilize the market [1][5][11][12]

Core Viewpoint - The company held an earnings briefing on September 15, 2025, to address investor concerns regarding its financial performance and operational strategies [1][2]. Group 1: Financial Performance - The company reported employee compensation of approximately 1.6 billion yuan in the first half of the year, which is comparable to Huaxin Cement, despite investor concerns about higher employee spending relative to revenue and taxes [3]. - The company acknowledged the challenging industry conditions, with national cement production data indicating a decline in performance for the third quarter, which will be detailed in the upcoming quarterly report [3]. Group 2: Market Conditions and Strategies - The company is focused on enhancing its market value through measures such as lean operations, focusing on core business areas, optimizing dividend policies, and completing equity incentives [3]. - The company noted that the cement price has been affected by a decrease in new real estate projects, but prices have stabilized recently, with expectations for recovery in demand during the "Golden September and Silver October" period [3]. Group 3: Future Outlook and Development - The company has supplied over 20 million tons of cement for the Xiong'an New Area since its establishment in 2017, benefiting from high product prices in the Beijing-Tianjin-Hebei region [3]. - The company is enhancing its team capabilities through a collaborative mechanism involving academic institutions and internal training programs, aimed at strengthening talent development [3].

Core Viewpoint - Dongwu Cement (00695) experienced a significant stock price increase, reaching a high of 6.38 HKD, the highest since September 2021, with a current increase of 7.01% to 6.11 HKD and a trading volume of 15.81 million HKD [1] Financial Performance - For the interim report of 2025, Dongwu Cement reported revenues of approximately 126 million HKD, with the cement segment contributing about 119 million HKD, reflecting a year-on-year growth of 28.0% [1] - The revenue increase is attributed to the cement industry actively promoting staggered production, which alleviated supply-demand conflicts, despite the market demand remaining weak [1] Market Dynamics - Although traditional peak season demand did not meet expectations, the decline in market demand has narrowed compared to the same period last year, contributing to the recovery in the company's revenue [1] - The company indicated that it will continue to closely monitor the dynamics of the cement sector and explore related business opportunities due to the narrowing trend of demand decline and the industry's anti-involution policy direction [1] Industry Outlook - Guotai Junan pointed out that once the cement industry enters a recovery phase in profitability, the release of industry profitability will be quite significant [1] - The focus on limiting overproduction remains a key concern for improving supply-demand dynamics in the industry under the anti-involution strategy [1]

Core Viewpoint - The announcement from the company indicates that the staggered production plans in Guangdong, Guangxi, and Fujian for 2025 will significantly impact cement supply and pricing due to effective policy enforcement [1] Industry Summary - In 2025, the staggered production plan for Guangdong will involve a kiln shutdown for 95 days, while Guangxi will have 160 days, and Fujian will have 170 days [1] - The implementation of staggered production policies this year has been effective, aligning with the national "anti-involution" requirements, which have strengthened the constraints on the industry [1] - The reduced supply of cement due to these policies is expected to provide support for cement prices [1]

Group 1 - The core viewpoint is that companies in regions such as the Yangtze River Delta, Hubei, Hunan, and Sichuan-Chongqing are actively discussing staggered production plans, which may lead to a recovery in cement prices if industry self-discipline measures are effectively implemented [1] - The establishment of Xinjiang Railway Co., Ltd. with a registered capital of 95 billion yuan, along with key projects like the Three Gorges Waterway and the Zhejiang-Jiangxi-Guangdong Canal, is expected to bring incremental demand for cement [1] - The average shipment rate of enterprises in key regions of the cement market is approximately 44%, and the medium to long-term supply-demand pattern is expected to improve with the recovery of infrastructure demand [1] Group 2 - The Building Materials ETF (159745) tracks the construction materials index (931009), which selects listed companies involved in cement, glass, ceramics, and other basic and new building materials to reflect the overall performance of related securities [1] - The index has both cyclical and growth characteristics, covering the entire industrial chain of building and decoration materials [1] - Investors without stock accounts can consider the Guotai CSI All-Share Building Materials ETF Initiated Link C (013020) and Guotai CSI All-Share Building Materials ETF Initiated Link A (013019) [1]