Industry Investment Rating - The investment rating for the construction materials industry is "Outperform the Market" and is maintained [1] Core Insights - The report highlights that the recent escalation of the US-Iran conflict has led to a significant increase in oil prices, which is expected to drive up the prices of consumer building materials such as waterproofing, pipes, and coatings. This price increase is anticipated to benefit leading companies in the market while putting pressure on smaller firms due to their lack of raw material inventory and delayed price adjustments [3] - The cement sector is currently in a recovery phase, but the volume of shipments is still lagging behind last year. The report notes that while funding for infrastructure projects is relatively secure, there remains pressure on housing demand. In the medium term, cement production capacity is expected to decline under policies limiting overproduction, which will enhance profit margins as capacity utilization improves [3][8] - The glass industry is experiencing a downward trend in demand influenced by the real estate sector. Although downstream processing plants are gradually recovering, their operating rates remain low. The report anticipates that prices will remain low and fluctuate in the short term due to ongoing supply-demand pressures [4][13] - The demand for fiberglass is expected to grow significantly, driven by the AI industry, with a notable increase in both volume and price for low-dielectric products. The report suggests a positive outlook for the fiberglass sector as it benefits from structural upgrades in product offerings [4] - The consumer building materials sector has reached a profitability bottom, with no further downward price pressure expected. The report indicates a strong demand for price increases among industry leaders, particularly in waterproofing, coatings, and gypsum board, which could lead to improved profitability in 2026 [4] Summary by Sections Cement - Cement is in a recovery phase, but shipment volumes are still below last year's levels. The report notes a 6.6% year-on-year decline in cement production in December 2025, with a total output of 144 million tons [8][16] Glass - The glass industry is facing continuous demand pressure, with a slight recovery in downstream processing demand. However, overall supply-demand pressures are expected to keep prices low in the short term [4][13] Fiberglass - The fiberglass sector is poised for explosive growth driven by AI-related demand, with expectations for a significant increase in both volume and price for upgraded products [4] Consumer Building Materials - The sector is experiencing a strong push for price increases, with expectations for improved profitability among leading companies in 2026 [4]

Market Overview - On March 25, the A-share market surged collectively, with the Shanghai Composite Index rising over 1% to surpass 3900 points, and the ChiNext Index increasing by over 2% [1] - The total trading volume in the Shanghai and Shenzhen markets reached approximately 2.19 trillion yuan, an increase of nearly 100 billion yuan compared to the previous day [1] AI Industry Chain - Stocks related to the AI industry chain experienced a significant rally, with notable gains in CPO concepts and computing power sectors [2][3] - Companies like Alade and Changguang Huaxin saw their stock prices hit the daily limit, with Alade rising by 20% and Changguang Huaxin increasing by over 14% [3] Storage Chip Sector - The storage chip sector was active, with stocks like Chaoying Electronics and Baiwei Storage hitting the daily limit, and Baiwei Storage reaching a new historical high [8][9] - Baiwei Storage announced a procurement contract worth 1.5 billion USD for storage wafers, which is expected to account for 11.1% of its NAND Flash procurement and 18.01% of its sales in 2025 [11] Local Stocks in Fujian - Local stocks in Fujian saw significant movements, with companies like Weike Technology and Pingtan Development hitting the daily limit [12][13] - The Fujian Provincial State-owned Assets Supervision and Administration Commission released a plan to enhance the development of state-owned enterprises, aiming to strengthen listed companies and encourage more provincial enterprises to enter the capital market [17]

Supply and Demand - Construction activity shows resilience, with building start rates performing reasonably well despite seasonal variations[2] - Industrial production remains strong, with overall industrial operating rates at historical highs for the lunar period[2] - Demand for construction materials is higher than the same period in 2025, indicating signs of stabilization in the construction sector[3] Commodity Prices - International commodity prices are influenced by ongoing geopolitical tensions, with oil prices continuing to rise and gold prices experiencing significant fluctuations[4] - Domestic industrial product prices are showing a strong upward trend, with notable increases in rebar and coal prices[4] Real Estate Market - New housing transactions in first-tier cities show positive year-on-year growth, with a 61.1% increase in average transaction area compared to the previous lunar period[5] - Second-hand housing transactions in major cities like Beijing and Shanghai have also performed well, with year-on-year increases of 7% and 17% respectively[5] Export Trends - South Korea's AI product exports continue to show strong growth, which may benefit China's exports due to rising energy prices[6] - Overall, China's export volume is expected to decline significantly in March, influenced by global oil price increases[6] Liquidity and Interest Rates - Recent weeks have seen a decline in funding rates, with the R007 rate at 1.48% and DR007 at 1.42% as of March 20[73] - The central bank has implemented a net withdrawal of 35.3 billion yuan through reverse repos in the last two weeks[75] Risk Factors - Potential risks include unexpected fluctuations in commodity prices and stronger-than-expected policy measures[79]

Industry Investment Rating - The investment rating for the construction materials industry is "Outperform the Market" and is maintained [1]. Core Insights - The report highlights a significant increase in raw material prices due to the geopolitical situation, particularly the rise in oil prices, which is expected to drive up prices in consumer building materials such as waterproofing, pipes, and coatings. This price increase may lead to a market share shift, favoring larger companies over smaller ones that lack inventory [3]. - Cement demand has rebounded quickly post-Chinese New Year, supported by resumed work and downstream inventory replenishment. However, housing construction demand remains under pressure. The cement industry's capacity is expected to decline under production limitation policies, which will enhance profit margins [4]. - The glass sector is experiencing a downward trend in demand influenced by the real estate market, although there are signs of gradual recovery in downstream processing plants. Supply-side adjustments are ongoing, but overall supply-demand pressure persists [4]. - The fiber glass segment is seeing a mixed demand recovery, with AI-related products driving growth. The industry is expected to experience a significant increase in demand and pricing due to structural upgrades [4]. - The consumer building materials sector has reached a profitability bottom, with strong calls for price increases across various categories, indicating potential for profit recovery in 2026 [4]. Summary by Sections Cement - Post-holiday demand for cement has rapidly recovered, primarily due to resumed work and inventory replenishment. The cement production capacity is expected to decline, leading to improved utilization rates and profit elasticity [8]. - In December 2025, cement production was 144 million tons, a year-on-year decrease of 6.6% [8]. Glass - The glass industry is facing sustained demand pressure, although there are signs of recovery in downstream processing. Supply-side adjustments are ongoing, but prices are expected to remain low in the short term [14]. Fiber Glass - Demand in the fiber glass sector is mixed, with AI-related products driving growth. The industry is expected to see a significant increase in demand and pricing due to structural upgrades [4]. Consumer Building Materials - The sector has reached a profitability bottom, with strong calls for price increases across various categories, indicating potential for profit recovery in 2026 [4].

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [1] Core Insights - The report highlights a significant increase in raw material prices due to the geopolitical situation, particularly the rise in oil prices, which is expected to drive up prices in the consumer building materials sector, including waterproofing, pipes, and coatings [3] - The cement industry is experiencing a recovery in demand post-Spring Festival, supported by resumed work and downstream inventory replenishment, although there are still pressures in the housing construction sector [3][8] - The glass industry is facing ongoing demand challenges influenced by the real estate sector, with a slight recovery in downstream processing demand but still low operating rates [4] - The fiber glass sector is expected to see growth driven by demand from the AI industry, with a notable increase in both volume and price for low dielectric products [4] - The consumer building materials sector is anticipated to see a bottoming out of profitability, with strong calls for price increases across various categories, indicating potential for profit improvement in 2026 [4] Summary by Sections Cement - Post-Spring Festival, national demand for cement has rapidly rebounded, primarily due to resumed work and inventory replenishment, with a significant increase in capacity utilization expected to enhance profit elasticity [8] - In December 2025, cement production was 144 million tons, a year-on-year decrease of 6.6% [8] Glass - The glass sector is experiencing sustained demand pressure, although there is a slight improvement in supply due to cold repairs of production lines [4] - Prices are expected to remain low and fluctuate in the short term due to ongoing supply-demand pressures [4] Fiber Glass - Demand in the fiber glass sector is expected to grow significantly, driven by the AI industry, with a clear trend of volume and price increases for upgraded products [4] Consumer Building Materials - The sector's profitability has reached a low point, with strong demands for price increases across multiple categories, indicating a potential for profit recovery in 2026 [4]

Core Insights - The article highlights the monthly fund flow dynamics in the Hong Kong mutual fund market, indicating a structural differentiation where equity and mixed funds continue to attract net inflows, while bond funds experience net outflows [1]. Fund Flow Analysis - In February 2026, the mixed fund category showed strong performance, with the Swiss Pictet Strategy Income Fund leading with a net inflow of 3.27 billion RMB, accumulating a total of 8.024 billion RMB year-to-date [1]. - The HSBC Asian Multi-Asset High Income Fund and Schroder Asian High Yield Bond Fund also performed well, with net inflows of 675 million RMB and 516 million RMB respectively, ranking fourth and fifth in monthly net inflows [1]. - In the equity fund segment, high dividend strategies and thematic industry funds were the main focus for investors, with the Morgan Asia Dividend Fund attracting 2.539 billion RMB in net inflows, ranking second for the month [1]. - The Morgan Pacific Technology Fund, as the only technology-focused equity fund, benefited from the recovery of global tech stocks, achieving a net inflow of 464 million RMB [1]. Bond Fund Performance - Overall, bond funds continued to see net outflows, primarily due to restrictions on sales to mainland investors and a shift in risk appetite towards equity products [1]. - The Morgan International Bond Fund recorded the largest net outflow for the month, while several HSBC bond products also faced significant outflows [1]. - Notably, the Bank of China Hong Kong All-Weather Asian Bond Fund managed to achieve a net inflow of 691 million RMB, ranking third in net inflows for the month [1]. Market Share Dynamics - As of the end of February 2026, Morgan's mutual fund products held an asset size of 86.76 billion RMB, capturing over 40% of the market share, maintaining a leading position [16]. - HSBC and Huitianfu ranked second and third, with asset sizes exceeding 20 billion RMB, while firms like Swiss Pictet and East Asia United Fund solidified their market positions with asset sizes surpassing 10 billion RMB [16].

Group 1 - The report highlights that the current phase may represent the peak of pressure due to the ongoing stalemate in the US-Iran conflict, which continues to suppress risk appetite and leads to a short-term decline in funds supporting the "first phase of the rally" [1][4][5] - It emphasizes that mid-term uncertainties are underestimated, including the likelihood of increased inflation tolerance by both the US and China, the resilience of the US economy, and the potential for China's energy and supply chain security to become a global alpha [1][4][12] - The report draws parallels between the current situation and past oil crises, indicating that rising oil prices and freight costs could lead to inflation and monetary tightening, confirming a stagflation cycle that may impact stock market fundamentals and valuations [5][11] Group 2 - The A-share market is currently in a "two-phase rally" adjustment phase, with expectations of a rebound following a period of overselling, but the market is likely to remain in a range-bound state with potential for sector rotation [1][12][13] - Short-term investment recommendations focus on "reality-based" structures, particularly in CPO and energy storage sectors, which are expected to benefit from energy diversification and supply resilience trends [1][13][16] - The report suggests that the characteristics of the two-phase rally are consistent with historical patterns, indicating that the adjustment phase is not about switching styles but rather about the diffusion of leading sectors [1][14][16]

Macroeconomic Overview - In January-February 2026, industrial added value increased by 6.3% year-on-year, rebounding by 1.1 percentage points from December 2025 and by 0.4 percentage points from the previous year [3] - The total retail sales of consumer goods in January-February 2026 nominally grew by 2.8% year-on-year, up by 1.9 percentage points from December 2025 but down by 0.9 percentage points from the previous year [3] - Fixed asset investment in January-February 2026 saw a cumulative year-on-year growth rate of 1.8%, rebounding by 5.6 percentage points from the previous year, with manufacturing investment growing by 3.1% and infrastructure investment (excluding electricity) growing by 11.4% [3] Real Estate Sector - Despite improvements in real estate investment in January-February 2026, specific data indicates ongoing challenges, with new housing starts down by 23.1% year-on-year and housing sales area down by 13.5% [4] - The funding sources for real estate development saw a year-on-year decline of 16.5%, with domestic loans down by 13.9% and other funding sources (prepayments) down by 25.1% [4] - The price index for new residential properties in 70 large and medium-sized cities in February 2026 was down by 3.5% year-on-year, while the second-hand housing price index fell by 6.3% [5] Trade and Export - Exports in January-February 2026 grew by 21.8%, significantly higher than the 5.5% growth in the previous year, with a trade surplus of 213.6 billion USD, an increase of 26.2% year-on-year [6] - The contribution rate of net exports to GDP reached 32.7% in 2025, the highest since 1998, indicating a strong reliance on external demand amidst rising trade protectionism and global trade complexities [6] Industry Insights - The Chinese Ministry of Commerce reported stable progress in US-China trade negotiations, with discussions on tariff levels and potential extensions of non-tariff measures [8] - Nvidia's GTC conference highlighted a projected demand of at least 1 trillion USD by 2027 for AI-related products, indicating a doubling of expected demand compared to previous forecasts [8] Consumer Sector - Chuangmeng Tiandi (1119.HK) announced a positive profit forecast for FY2025, expecting a net profit of 10 million to 30 million CNY, a significant turnaround from a loss of approximately 545 million CNY in FY2024 [10] - The improvement in profitability is attributed to successful commercialization of self-developed games, particularly "Karabichu," and a shift from high R&D investment to operational efficiency [10]

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [2] Core Insights - The report highlights a steady recovery in demand post-holiday, with expectations for policy support to further boost the market [5] - The construction materials sector is experiencing a mixed recovery, with cement demand rebounding while glass demand remains under pressure [6][16] - The report emphasizes the potential for profit elasticity in the cement industry due to capacity reduction policies, while the glass sector faces ongoing supply-demand challenges [10][16] Summary by Sections Industry Overview - As of March 11, 2026, the national construction site resumption rate is 42.5%, up 19 percentage points month-on-month, but down 5.2% year-on-year [5] - Labor utilization rate stands at 43.9%, with a month-on-month increase of 14.2% and a year-on-year decrease of 5.8% [5] - Funding availability rate is at 42.8%, reflecting a month-on-month increase of 7.4% and a year-on-year decrease of 0.8% [5] Cement Sector - Post-holiday, national cement demand has quickly rebounded, primarily due to resumption of work and downstream inventory replenishment [10] - Cement production in December 2025 was 144 million tons, a year-on-year decline of 6.6% [10] - The report suggests that cement capacity is expected to decrease under production limitation policies, leading to improved capacity utilization and profit potential [10] Glass Sector - The glass industry is facing a downward trend in demand due to real estate impacts, although downstream processing demand is gradually recovering [16] - Several production lines underwent cold repairs in December 2025, but overall supply-demand pressure remains, leading to expectations of low price fluctuations in the short term [16] Fiberglass Sector - Demand in the fiberglass sector is subdued post-holiday, but the electronic yarn segment is experiencing growth driven by AI industry demand [6] - The report anticipates a significant increase in demand and pricing for low dielectric products as the industry upgrades its product structure [6] Consumer Building Materials - The sector's profitability has reached a bottom, with no further downward price pressure expected [7] - The report notes a strong push for price increases across various categories, indicating potential for profit recovery in 2026 [7]

Group 1: Investment Rating - There is no information about the industry investment rating in the report. Group 2: Core Views - This week, Treasury bond futures closed down across the board, with significant fluctuations in the ultra - long end. Rising oil prices due to the Middle East situation and domestic economic data have put pressure on the bond market, while the expected interest rate cut of over 10 trillion inter - bank deposits has provided phased support for bond futures prices [4]. - Short - term Treasury bond futures are expected to be more stable, suitable as a "stabilizer" in the portfolio. Long - term varieties will be dominated by the game between external inflation expectations and internal fundamentals, with greater volatility. The 30 - year contract will be in a weak shock, and the 10 - year Treasury bond yield is expected to fluctuate mainly in the range of 1.75% - 1.85%. If the subsequent economic data warms up more than expected or the equity market continues to strengthen, long - term interest rates still face upward pressure [6]. Group 3: Summary by Directory Part One: Main Views - **Weekly Market Overview**: Treasury bond futures closed down across the board. The escalation of the Middle East situation led to a surge in oil prices, triggering input - type inflation expectations that suppressed the bond market. Domestic economic data showed a good start, with the CPI rising and PPI decline narrowing. The trade data was strong, which also put pressure on the bond market. The expected interest rate cut of over 10 trillion inter - bank deposits supported bond futures prices [4]. - **Main Forecasts**: Short - term Treasury bond futures are more stable, while long - term varieties are more volatile. The 30 - year contract is in a weak shock, and the 10 - year Treasury bond yield fluctuates in a certain range. There is upward pressure on long - term interest rates under certain conditions [6]. Part Two: Liquidity Tracking - The report presents multiple charts related to liquidity, including open - market operations (volume and price), medium - term lending facilities (volume and price), various interest rates (such as reverse repurchase rates, inter - bank deposit rates, etc.), and the relationship between different interest rates and yields (such as the spread between R007 and DR007, and the term spread of Treasury bonds and US Treasury bonds) [10][12][23]. Part Three: Treasury Bond Futures Arbitrage Indicator Tracking - The report shows the basis, net basis, implied repo rate (IRR), and implied interest rate of 2 - year, 5 - year, 10 - year, and 30 - year Treasury bond futures [46][56][62][71].