Investment Rating - The investment rating for the company is "Buy" (maintained) with a target price of RMB 29.76 and HKD 28.93 [7]. Core Views - The company reported a revenue of RMB 82.532 billion for 2025, a year-on-year decrease of 9.33%, while the net profit attributable to shareholders was RMB 8.113 billion, an increase of 5.42% year-on-year [1]. - The company plans to distribute a final dividend of RMB 0.61 per share, raising the total cash dividend payout ratio to 55.3%, marking the first time it has exceeded 50% [1]. - Despite industry demand pressures, the company is expected to achieve stable profit growth through cost control and reduced capital expenditures [1]. Summary by Sections Revenue and Profitability - The company achieved a revenue of RMB 82.532 billion in 2025, down 9.33% year-on-year, with a net profit of RMB 8.113 billion, up 5.42% year-on-year [1]. - The fourth quarter revenue was RMB 21.234 billion, showing a quarter-on-quarter increase of 6.14%, while the net profit was RMB 1.809 billion, down 6.61% quarter-on-quarter [1]. Cost Control and Efficiency - The company’s self-produced cement clinker sales volume was 26.5 million tons in 2025, a decrease of 1.13% year-on-year, which is better than the national average decline of 6.9% [2]. - The comprehensive cost of self-produced cement clinker decreased by 11.12% year-on-year, with fuel and power costs down by 15.70% [2]. - The gross profit margin for self-produced cement was 27.76%, an increase of 2.95 percentage points year-on-year [2]. Business Segments Performance - The aggregate and manufactured sand segment saw a revenue of RMB 4.203 billion, down 10.41% year-on-year, with a gross margin of 40.13%, a decrease of 6.78 percentage points [3]. - The ready-mixed concrete business performed well, achieving a revenue of RMB 3.209 billion, up 20.04% year-on-year, with a gross margin of 12.38%, an increase of 2.38 percentage points [3]. - The company’s overseas and export business became significant growth drivers, with revenues of RMB 5.846 billion and RMB 0.673 billion, respectively, representing increases of 24.99% and 158.5% year-on-year [3]. Financial Health - The company maintained a net cash position with a net cash flow from operating activities of RMB 16.644 billion, despite a decrease due to reduced trade income [4]. - The debt-to-asset ratio at the end of 2025 was 20.42%, down 0.89 percentage points from the previous year, with cash and cash equivalents reaching RMB 50.252 billion [4]. - The company’s net debt ratio was -18.0%, continuing its net cash status since 2017 [4]. Earnings Forecast and Valuation - Due to ongoing weak downstream demand and rising raw material prices, the earnings forecasts for 2026 and 2027 have been revised downwards, with expected net profits of RMB 9.211 billion and RMB 10.074 billion, respectively [5]. - The estimated book value per share for 2026 is RMB 37.2, with target prices set at RMB 29.76 and HKD 28.93, corresponding to 0.8x and 0.7x the 2026 P/B ratio [5].

Macro - The global order is being reshaped due to the collapse of "trust," leading to increased wealth disparity and high debt levels, undermining globalization [4] - The decline in dollar credit is causing a decoupling of gold and dollar interest rates, signaling a return to a multipolar currency system, with gold entering a historic long-term bull market [4] - The key macro focus for 2026 is "stabilizing prices," with weak domestic demand necessitating increased fiscal support and continued interest rate cuts [4] - The recovery of consumer wealth, income, and expectations is crucial for consumption rebound, with financing growth being an important leading indicator of demand [4] Strategy - Stability is identified as the underlying theme for the Chinese stock market, with expectations of new heights following the storm [7] - Emerging technology is highlighted as a main focus, with value sectors also expected to see a revival [7] - Investment themes should concentrate on new forms of intelligent economy and transformation opportunities [7] New Stock Research - The upcoming reforms in the ChiNext board are expected to enhance the IPO issuance process, supporting innovative enterprises in new industries and technologies [13] - In January-February 2026, new stock issuance was steady, with an average first-day increase of 189.23% for newly listed stocks [13][14] - The number of IPOs is projected to accelerate in 2026, with an estimated total of 90 to 150 new listings, raising approximately 150 billion yuan [14] Fixed Income - The bond market is influenced by economic data and input inflation, with a cautious approach to interest rate cuts expected [17] - The demand for bonds is supported by banks, insurance, and wealth management funds, although there is insufficient pricing power for ultra-long bonds [17] - Strategies in the bond market should adapt to a low-interest rate environment, focusing on multi-asset allocations [17] Real Estate - The sequence of industry recovery is clear, with policy expectations strengthening [22] - The focus during the "14th Five-Year Plan" period will be on high-quality development, with a shift from negative to neutral outlooks for certain asset prices [22] - Companies with strong land acquisition capabilities and low inventory are recommended for investment [22] Building Materials - The building materials sector is expected to find independent growth opportunities despite macroeconomic challenges [24] - Cement demand is anticipated to stabilize, with supply-side adjustments expected to optimize the market [25] - The consumption building materials segment is seeing a divergence in performance, with some companies showing resilience and strong dividend yields [26] Transportation - The aviation sector is entering a "super cycle," driven by steady demand growth and supply constraints [49] - The oil transportation industry is expected to experience a "super bull market," with high demand and limited supply [52] - The highway sector is projected to see stable traffic demand and dividend stability, with ongoing policy optimizations [56] Express Delivery - The express delivery industry is expected to maintain resilient growth, with a focus on small parcel trends [60] - Regulatory measures are stabilizing pricing, which is anticipated to improve profitability for e-commerce delivery companies [61] Non-ferrous Metals - The non-ferrous metals sector is shifting from traditional demand drivers to structural demand from new energy and AI [64] - Precious metals are expected to benefit from geopolitical risks and inflation concerns, while industrial metals face tight supply-demand balances [64] Petrochemicals - The refining industry is poised for a "cycle + growth" resonance, with tightening supply-demand dynamics [69] - Geopolitical risks are expected to drive oil prices higher, impacting the petrochemical market [69]

Investment Rating - The industry is rated as "outperforming the market," indicating an expected increase of over 10% in the industry index relative to the CSI 300 index over the next six months [14]. Core Insights - The A-share market experienced a rebound after an initial decline, with significant support at 3807 points for the Shanghai Composite Index, which closed at 3881.28 points, up 1.78% [3][7]. - Key sectors showing strong performance include non-ferrous metals, communication equipment, electricity, and power grid equipment, while sectors like rare earths, insurance, oil and petrochemicals, and coal showed weaker performance [3][7]. - The average price-to-earnings ratios for the Shanghai Composite and ChiNext indices are 15.79 times and 45.41 times, respectively, indicating a favorable environment for medium to long-term investments [3][13]. - The total trading volume for both markets was 20,962 billion, above the median of the past three years, suggesting robust market activity [3][13]. Summary by Sections A-share Market Overview - On March 24, the A-share market showed a pattern of initial decline followed by recovery, with the Shanghai Composite Index gaining support around 3807 points and ultimately closing at 3881.28 points [7]. - The trading day saw over 90% of stocks rising, with notable gains in sectors such as ground equipment, electricity, trade, environmental protection, and medical services [7]. Future Market Outlook and Investment Recommendations - The market is expected to maintain a volatile consolidation phase, with a focus on macroeconomic data, overseas liquidity changes, and policy developments [3][13]. - Short-term investment opportunities are recommended in sectors such as non-ferrous metals, electricity, communication equipment, and power grid equipment [3][13].

Exchange Rate Trends - The RMB has been on an appreciation trend this year, with the USD/RMB exchange rate increasing by 1.5% and the EUR/RMB by 1.4% in the first two months[4] - The nominal effective exchange rate of the RMB has surpassed 108, indicating a broad-based appreciation against a basket of currencies[4] Trade Surplus and Economic Implications - China's goods trade surplus reached approximately $1.2 trillion last year, a record-breaking figure, indicating a significant trade imbalance with partners[4] - The strong trade surplus may lead to increased trade friction amid rising global protectionism, prompting a policy shift towards expanding imports to narrow the surplus[4] Oil Prices and Cost Pressures - Global oil prices have surged, with Brent crude stabilizing around $100, reflecting an increase of over 30% compared to the same period last year[4] - The appreciation of the RMB can help alleviate cost pressures from rising commodity prices, enhancing the competitiveness of RMB-denominated trade[4] Export Outlook - Despite the RMB's appreciation, the impact on exports is expected to be limited due to the high bargaining power of China's exports, primarily in machinery and high-tech products[4] - China's share in global trade remains substantial, making it difficult for other countries to fully replace Chinese manufactured goods[4] Risk Factors - Geopolitical risks, domestic policy implementation challenges, and potential global recession driven by oil price increases are highlighted as significant risks to the economic outlook[4]

Investment Rating - The report maintains an "Overweight" rating for the construction and engineering sector, as well as for the building materials sector [5]. Core Insights - The report emphasizes a shift in infrastructure investment logic during the "14th Five-Year Plan" to a dual focus on "safety" and "development," integrating the "six networks" (water, pipeline, electricity, computing power, transportation, and industrial networks) [1][2]. - It predicts that infrastructure investment will stabilize and rebound in 2026, driven by the normalization of "dual construction" and the need to address gaps in strategic emerging industries [1][2]. - The report highlights that energy infrastructure will play a leading role in green transformation and enhancing grid resilience, while water conservancy and urban pipeline projects will focus on building a "national water network" and "resilient cities" [1][2]. Summary by Sections Investment Cycle Transition - The report notes that fixed asset investment growth in 2025 showed a downward trend, with a year-on-year decline of 3.8%, and infrastructure investment turned negative due to real estate pressures [12][20]. - It indicates that only a few regions, such as Tibet and Hebei, achieved their investment targets, while most areas experienced a trend of "shrinking total volume and adjusting structure" [12][13]. Energy and Pipeline Renovation - The "15th Five-Year Plan" includes a significant focus on energy security, with a projected 40% increase in investment compared to the previous plan, and emphasizes the importance of "computing power and electricity collaboration" [2][31]. - Urban renewal and pipeline renovation are highlighted as key areas, with an estimated investment demand exceeding 5 trillion yuan during the "15th Five-Year Plan" [2]. Investment Recommendations - The report identifies three main investment directions: 1. International expansion in sectors with global competitiveness, such as fiberglass and cleanroom engineering services [3]. 2. Domestic focus on "safety" and "industry," particularly in high-end manufacturing and energy engineering [3]. 3. Regional focus on investment opportunities in strategic areas like Tibet and Xinjiang [3].

Report Overview - The report is the morning report of Guoxin Guozheng Futures on March 24, 2026, covering multiple futures varieties [1] Index Futures - On March 23, the three major A - share indexes weakened. The Shanghai Composite Index dropped 3.63% to 3813.28 points, the Shenzhen Component Index fell 3.76% to 13345.51 points, and the ChiNext Index declined 3.49% to 3235.22 points. The trading volume of the Shanghai, Shenzhen, and Beijing stock markets reached 2.45 trillion yuan, an increase of 145.4 billion yuan from the previous trading day [1] - The CSI 300 Index was weak on March 23, closing at 4418.00, a decrease of 149.02 compared to the previous day [2] Coke and Coking Coal - On March 23, the weighted index of coke oscillated stronger, closing at 1867.8, a rise of 117.3 compared to the previous day [2] - The weighted index of coking coal was strong on March 23, closing at 1323.6 yuan, a rise of 122.3 compared to the previous day [3] - Coke: Coking profit is average, and daily production slightly increases. Coke inventory changes little, and the purchasing willingness of traders slightly improves [4] - Coking coal: The customs clearance volume of Mongolian coal is 1461 vehicles. The resumption of work in coal mines is good, the weekly production level continues to rise slightly, the spot auction transactions within the week are good, and the transaction price has increased. The total inventory of coking coal has increased slightly, and the inventory at the production end has decreased slightly [4] - Policy: According to the "15th Five - Year Plan" outline, by 2030, China's comprehensive energy production capacity will reach 5.8 billion tons of standard coal. Coal will play a long - term role in ensuring energy security and economic stability [4] Zhengzhou Sugar - The Zhengzhou Sugar 2605 contract oscillated and rose slightly on March 23. Affected by the rise of US sugar on Friday and the increase in spot quotes in the morning, the futures price oscillated higher, and then oscillated lower due to the sharp decline in the stock market. At night, it oscillated lower due to the news of the talks between the US and Iran in Pakistan [5] - From January to February 2026, China's imports of syrup and white sugar premixed powder were 830,000 tons and 592,000 tons respectively, an increase of 75,000 tons and 266,000 tons year - on - year. The total import volume was 1.422 million tons, an increase of 341,000 tons or 31% year - on - year [7] Rubber - Due to the large short - term decline, the Shanghai Rubber oscillated and rose slightly on March 23. At night, it oscillated and rose slightly due to the news of the talks between the US and Iran in Pakistan [7] - In January 2026, the US imported 23.48 million tires, a year - on - year increase of 2.6% and a month - on - month increase of 2.5%. Among them, the import of passenger car tires increased 1.2% year - on - year to 14.03 million, a month - on - month decrease of 0.3%; the import of truck and bus tires decreased 4.1% year - on - year and 3.4% month - on - month to 4.72 million [7] Soybean Meal - In the international market on March 23, the CBOT soybean main contract closed at 1164.5 cents per bushel, a rise of 0.34%. As of the week of March 19, the US soybean export inspection was 1,101,730 tons, in line with market expectations. The export inspection volume to China was 664,967 tons, accounting for 60.36% of the total inspection volume. As of last Thursday, the Brazilian soybean harvest rate was 68%, behind 80% of the same period last year [7] - In the domestic market on March 23, the soybean meal main M2605 contract closed at 3007 yuan per ton, a decline of 0.73%. With the relaxation of the inspection of weeds and pests on imported Brazilian soybeans in China, it is expected that many soybeans stranded at ports will complete customs clearance one after another. After the soybean inventory of oil mills is replenished, the soybean meal production will remain high, and the tight supply situation of soybean meal will be alleviated [7] Live Pigs - On March 21, the live pig main contract LH2605 closed at 9980 yuan per ton, a decline of 2.35%. The slaughter plan of large - scale breeding enterprises in March increased significantly compared to the previous month, the slaughter rhythm accelerated significantly, the market supply was sufficient, and the sales were active. The supply of suitable - weight standard pigs was loose. On the demand side, it is in the seasonal off - season, the sales of downstream white - striped pork are weak, the operating rate of slaughtering enterprises is low, and the demand - side carrying capacity is insufficient, providing limited support for pig prices. Although frozen product segmentation warehousing and some secondary fattening have formed a certain bottom - support, it is difficult to reverse the pattern of strong supply and weak demand as a whole [7] Palm Oil - On March 23, benefiting from the rise of crude oil prices over the weekend, the palm oil on the Dalian Commodity Exchange oscillated stronger. The main contract P2605 closed with a large positive line with a lower shadow. The highest price was 9960, the lowest price was 9650, and the closing price was 9942, a rise of 2.31% compared to the previous trading day [8] - As of March 20, 2026 (the 12th week), the commercial inventory of palm oil in key regions across the country was 808,200 tons, a decrease of 33,800 tons or 4.01% compared to the previous week, and an increase of 419,900 tons or 108.14% compared to 388,300 tons of the same period last year [8] Shanghai Copper - The main contract of Shanghai Copper opened at 94,510, reached a high of 94,740, a low of 91,500, and closed at 92,100, with a settlement price of 92,870. The trading volume was 215,827 lots, and the open interest was 204,413 lots. Macro - suppression: The hawkish stance of the Federal Reserve and the strengthening of the US dollar suppress commodities. The fundamentals are weak: High smelting operation rate, increased imports, and rising bonded - area inventory; the demand in the "Golden March" is lower than expected, and the spot premium has narrowed. The spot price of Yangtze River Non - ferrous 1 copper is 93,190 yuan per ton, a decrease of 2,700 yuan per ton; the premium to CU2605 is 120 - 160 yuan per ton [8] Cotton - The main contract of Zhengzhou Cotton closed at 15,316 yuan per ton at night on March 23. The cotton inventory decreased by 16 lots compared to the previous trading day. Entering the peak season of "Golden March and Silver April", downstream textile enterprises purchase as they use [8] Iron Ore - On March 23, the main contract of iron ore 2605 oscillated and closed up, with a rise of 0.92% and a closing price of 819 yuan. The iron ore shipment increased month - on - month, the arrival volume decreased again, the port inventory continued to accumulate, the demand for molten iron from steel mills' resumption of production increased, and the short - term iron ore price was in an oscillating trend [8] Asphalt - On March 23, the main contract of asphalt 2606 oscillated and rose, with a rise of 4.27% and a closing price of 4661 yuan. Domestic refineries reduced production due to unstable raw material supply, the inventory increased slightly, the downstream demand has not started, the refinery's shipping volume decreased month - on - month, and it is in a situation of weak supply and demand. The short - term asphalt price may follow the oil price [8] Logs - The main contract of logs 2605 opened at 825 on March 23, with a low of 819, a high of 832, and a closing price of 822, with an increase of 702 lots in open interest. The spot price of 3.9 - meter medium - grade A radiata pine logs in Shandong was 770 yuan per cubic meter, unchanged from the previous day, and the spot price of 4 - meter medium - grade A radiata pine logs in Jiangsu was 780 yuan per cubic meter, unchanged from the previous day [8][9] Steel - On March 23, rb2605 closed at 3154 yuan per ton, and hc2605 closed at 3330 yuan per ton. The military strikes launched by the US and Israel against Iran on March 23 entered the 24th day, and the transportation interruption in the Strait of Hormuz continued, and high oil prices will last longer. On the one hand, the energy substitution effect is strengthened, the shipping cost rises, and the prices of black - series raw fuels are pushed up. On the other hand, the global inflation expectation heats up, the liquidity tightens, the risk - aversion sentiment spreads, and the global economic growth is impacted. In the short term, driven by high costs, steel prices may oscillate stronger [9] Alumina - On March 23, ao2605 closed at 3093 yuan per ton. On the supply side, the new production capacity is being put into operation at an accelerated pace. The 1.2 million - ton project of Guangxi Long'an Hetai will be put into trial production in April, and another new production capacity is expected to be put into operation at the end of March. Coupled with the high arrival volume of imported alumina from March to April (about 250,000 tons per month on average), the subsequent supply pressure is becoming increasingly prominent, which will effectively suppress the upward space of prices. On the demand side, the consumption improvement space is limited, and the spot trading atmosphere is average. Although the slight recovery of downstream consumption and the firmness of the spot provide a bottom support for alumina, the commissioning of new projects in many places and the increase in raw material arrivals have established the expectation of loose supply [10] Shanghai Aluminum - On March 23, al2605 closed at 23,555 yuan per ton. On the macro - level, the geopolitical situation in the Middle East continues to escalate. The US threatens to expand attacks on Iran's power generation facilities, and Iran responds firmly. The inflation risk caused by geopolitics intensifies, further leading to a collapse in demand and a shrinkage in investment. The market sentiment of trading recession remains. The precious metals and non - ferrous metal markets continue to decline. Attention should be paid to the adjustment of Guinea's bauxite export policy. On the supply side of the fundamentals, the operation is stable, the molten aluminum ratio has increased slightly, and the social inventory has decreased slightly. Attention should be paid to the arrival of the inventory inflection point. On the demand side, the receiving situation continues to improve. The absolute price has dropped to an ideal range, and downstream and terminal buyers increase their purchases at low prices, which continues to strengthen the support for the spot [10]

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]

Group 1 - The report indicates that high oil prices will not lead to stagflation in China, as improved inflation expectations can catalyze an upward inventory cycle, benefiting manufacturing and cyclical industries amid global energy transition and capacity security [1] - High oil prices impact the A-share market through four main pathways: cost shock, inventory changes, external demand pressure, and valuation effects [4][33] - The report highlights that the cost transmission ability is ranked as upstream > downstream > midstream, with industries like transportation, chemicals, electricity, and construction being more affected by high oil prices [14][18] Group 2 - Historical analysis of the oil price shocks during the Libyan civil war (2010-2012) and the Russia-Ukraine conflict (2021-2022) shows that while upstream sectors benefited initially, sustained high oil prices eventually suppressed external demand and led to stagflation concerns [33][39] - The report emphasizes that the current economic cycle in China is in a recovery phase rather than overheating, suggesting that rising oil prices could accelerate the recovery of the Producer Price Index (PPI) [27][31] - Recommended sectors include those benefiting from the energy transition and capital goods exports, such as power equipment, new energy vehicles, and construction materials, which are expected to see price increases and inventory replenishment [4][33]

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]

Market Trends - Recent increase in U.S. Treasury yields due to rising oil prices has pressured liquidity-sensitive assets like gold and the tech sector[1] - The current market adjustment reflects a contraction in risk appetite rather than a deterioration in fundamentals[10] PPI and Earnings Outlook - PPI turning positive is expected to boost A-share earnings, with a projected increase in non-financial net profit growth from 11% under neutral assumptions to 17% under optimistic scenarios for 2026[2] - The contribution of cyclical resources and manufacturing to overall A-share profits is significant, accounting for 45% of non-financial profits over the past five years[2] Index and Valuation - The Shanghai Composite Index has retraced approximately 64% from its peak, nearing historical pullback levels seen in previous bull markets[3] - Current valuations remain high, with the Shanghai Composite PE-TTM at 16.6x and the overall A-share market at 22.6x, both around the 75th percentile of the last 20 years[3] Key Influencing Factors - Geopolitical risks and oil price trends are critical, with three scenarios outlined: easing, maintaining, and escalating tensions in the Middle East affecting market liquidity and asset prices[4] - Changes in domestic and external demand are crucial, with recent data indicating a shift towards stronger domestic demand, particularly in real estate[4] Investment Strategy - Short-term focus on low-volatility assets, while maintaining a strategic emphasis on cyclical resources throughout the year[9] - Structural opportunities in inflation-benefiting sectors, particularly upstream industries, are highlighted as key areas for investment[4]