Summary of Key Points from Conference Call Records Industry Overview Tungsten Industry - The tungsten industry has shown outstanding performance, with tungsten concentrate prices increasing by 30% year-on-year in the first three quarters and a quarterly increase of 40% in Q3, reaching a historical high [1][5] - Integrated tungsten companies such as Xiamen Tungsten and China Tungsten High-tech, along with downstream tool companies like Dingtai High-tech and Oko Yi, have seen improvements in gross margins and profitability [1][4] - Integrated tungsten companies reported a gross margin of 19.2% in Q3, up 0.5 percentage points quarter-on-quarter, while downstream tool companies had a gross margin of 37.7%, an increase of 3.8 percentage points [1][4] Nonferrous Metals Industry - The overall performance of the nonferrous metals industry in Q3 2025 was below expectations, with gold prices rising by only about 3% and aluminum and copper showing marginal increases of 3% and 2% respectively [3] - Despite the underperformance, the tungsten sector stood out, with significant price increases and strong demand [3][5] Petrochemical and Chemical Industry - The petrochemical sector experienced a 1.2% year-on-year decline in revenue in Q3, but net profit attributable to shareholders grew by 29% [11] - Sub-sectors such as fluorochemicals and private refining saw significant profit increases, with fluorochemicals' net profit rising by 320% [11] - The chemical industry has been in a decline for over three years, but profitability is expected to bottom out in 2025 and gradually increase from 2026 [13] Future Outlook Nonferrous Metals - The supply elasticity of nonferrous metals is expected to weaken over the next 3 to 5 years due to constrained supply and increasing demand from sectors like electric power, AI, military, and high-end manufacturing [1][7] - The market outlook for nonferrous metals remains optimistic, with expectations of good performance from metals like gold, copper, aluminum, tungsten, and cobalt from current adjustments until spring 2026 [7] Petrochemical and Chemical - A decline in capital expenditure among petrochemical companies since the end of 2023 suggests a potential turning point in the capacity cycle [12] - The chemical industry is expected to see a rebound in profitability starting in 2026, driven by significant changes in supply dynamics and reduced capital expenditures [13] Construction Materials - The construction materials sector showed signs of recovery, with revenue and profit declines narrowing significantly in Q3 [19] - The cement sector remains weak domestically but has significant growth potential in overseas markets, particularly in Africa [19][20] Express Delivery Industry - The express delivery sector has made notable progress in reducing competition, with significant performance disparities among companies [23] - The upcoming peak seasons are expected to improve the performance of express delivery companies significantly [23] Cross-Border Logistics - The cross-border logistics sector faced challenges due to changes in tariff policies, leading to a decline in performance [24] - However, stable tariff policies and upcoming demand peaks in North America and Europe may provide rebound opportunities [24] Additional Insights - The chemical sector is experiencing a significant shift with a focus on reducing capital expenditures and improving profitability through technological upgrades and new project launches [15] - The phosphoric acid market is expected to benefit from strong demand driven by energy storage applications, with high profitability likely to persist due to long construction cycles for new capacity [16] - Companies with relatively low valuations in the chemical sector, such as Wanhua and Hualu, are recommended for potential growth even in a weak demand environment [15]

Investment Rating - The report suggests investment opportunities in the glass fiber and cement industries, with a focus on selecting stocks in the consumer building materials and early-cycle sectors [3][4]. Core Insights - The construction materials industry saw a narrowing revenue decline of 3.1% year-on-year in the first three quarters of 2025, with total revenue reaching 4,322.5 billion yuan. Net profit attributable to shareholders increased by 27.8% to 244.4 billion yuan, marking a shift from profit decline to growth [2][9]. - The cement industry demonstrated significant profit elasticity, with sample companies achieving a total revenue of 1,812.3 billion yuan, a year-on-year decline of 8.4%, but a net profit increase of 148.8% to 91.3 billion yuan [20][27]. - The glass fiber sector reported robust growth, with total revenue of 492.1 billion yuan, up 23.5% year-on-year, and net profit soaring by 121.4% to 48.7 billion yuan [4][35]. - The consumer building materials segment faced pressure, with a revenue decline of 0.9% to 1,107.5 billion yuan and a net profit decrease of 6.9% to 82.1 billion yuan, although some companies showed strong performance [4][5]. - The early-cycle sector remains under pressure, but leading companies like Subote have achieved revenue and profit growth through strategic project expansions [5][9]. Summary by Sections Cement Industry - The cement industry is experiencing a gradual recovery, with a total revenue of 1,812.3 billion yuan in the first three quarters of 2025, down 8.4% year-on-year, but net profit increased by 148.8% to 91.3 billion yuan. Major players like Huaxin Cement and Conch Cement continue to dominate profit contributions [20][27]. - The overall profit margin for the cement sector improved, with a gross margin of 22.4%, up 2.76 percentage points from the previous year [27][29]. Glass Fiber Industry - The glass fiber sector has shown strong performance, with total revenue of 492.1 billion yuan, a 23.5% increase year-on-year, and net profit rising by 121.4% to 48.7 billion yuan. The recovery in pricing and the growth of specialty fabrics are key drivers of this improvement [4][35]. Consumer Building Materials - The consumer building materials segment reported a revenue of 1,107.5 billion yuan, down 0.9% year-on-year, with net profit decreasing by 6.9% to 82.1 billion yuan. Companies like Keda Manufacturing and Sankeshu are leveraging unique channel advantages to drive growth [4][5]. Early-Cycle Sector - The early-cycle sector remains challenged, but companies like Subote have successfully increased both revenue and profit by focusing on major engineering projects in the western regions [5][9].

Investment Rating - The report highlights a positive outlook for investment in Africa, particularly in Egypt, due to external support and potential for industrial development [1][10]. Core Insights - The report discusses the impact of US dollar interest rate changes on African economies, using Egypt as a case study, where economic growth has declined from 6.6% in FY 21/22 to 2.4% in FY 23/24 due to external pressures [1][10]. - Egypt's net international reserves reached a record high of $49.03 billion in July 2025, reflecting improvements in foreign exchange availability and investment attraction [1][10]. - The report emphasizes the need for African countries to develop local industries and supply chains to mitigate the negative impacts of external economic fluctuations [1][10]. Summary by Sections 1. Weekly Discussion - The report examines the growth potential in Africa amidst a backdrop of US dollar interest rate changes, focusing on Egypt's economic challenges and recovery efforts [1][10]. - It notes significant investments from the UAE and the World Bank to support Egypt's economy, totaling $35 billion and $6 billion respectively [1][10]. 2. Sectoral Linkages - Cement prices averaged 351 RMB/t, down 74 RMB/t year-on-year, with a national average shipment rate of 45.9% [2][13]. - Float glass prices decreased slightly to 1197.22 RMB/ton, with inventory levels showing a reduction [2][13]. - The report indicates a mixed performance across various materials, with cement and glass showing signs of price stabilization amidst fluctuating demand [2][13]. 3. Market Performance - The construction materials index increased by 1.51%, with glass manufacturing showing a notable rise of 4.41% [16]. - The report highlights the performance of specific companies in the construction materials sector, indicating a positive trend for certain stocks [16][18]. 4. Price Changes in Construction Materials - Cement prices showed a slight decline of 0.1% this week, with regional variations in price adjustments [24][25]. - Float glass prices remained stable, with some regions experiencing minor increases due to supply constraints [33][49]. - The report notes that the fiberglass market is stable, with prices holding steady and slight year-on-year increases observed [55].

Investment Rating - The report maintains an "Outperform" rating for the construction materials sector [2] Core Views - The construction materials sector continues to show a trend of profit improvement in Q3 2025, with a year-on-year increase in net profit despite a decline in revenue [5][39] - The overall revenue for the construction materials sector in the first three quarters of 2025 was CNY 463.64 billion, a decrease of 4.98% year-on-year, while net profit attributable to shareholders was CNY 18.79 billion, an increase of 28.19% year-on-year [5][39] - The report identifies key factors for profit improvement, including a decrease in raw material costs and an improved supply-demand balance for certain construction materials [5][39] Summary by Sections 1. Construction Materials Sector Overview - The construction materials sector's revenue in Q3 2025 was CNY 162.16 billion, down 6.0% year-on-year, with a net profit of CNY 6.99 billion, up 9.2% year-on-year [5][39] - The sector's overall gross margin improved to 19.64%, up 1.58 percentage points year-on-year, and the net margin was 4.18%, up 1.19 percentage points year-on-year [44] 2. Cement Sector - The cement sector's revenue for the first three quarters of 2025 was CNY 269.04 billion, down 7.79% year-on-year, while net profit was CNY 7.82 billion, up 158.8% year-on-year [46][52] - Despite a decrease in cement prices, profit margins improved due to lower costs of coal and other key inputs [46] 3. Glass Sector - The glass sector faced price pressures, with revenue for the first three quarters of 2025 at CNY 34.41 billion, down 11.28% year-on-year, and a net profit of CNY 0.27 billion, down 84.22% year-on-year [55][59] - The average price of float glass continued to decline, impacting profitability [55] 4. Fiberglass Sector - The fiberglass sector saw a revenue increase of 23.54% year-on-year in the first three quarters of 2025, totaling CNY 49.21 billion, with a net profit of CNY 4.87 billion, up 121.37% year-on-year [5][39] - Price increases initiated in September contributed to the sector's profit recovery [5] 5. Consumer Building Materials Sector - The consumer building materials sector reported a revenue of CNY 110.76 billion in the first three quarters of 2025, down 5.56% year-on-year, with a net profit of CNY 5.84 billion, down 24.01% year-on-year [5][39] - The sector's cash collection ratio improved to 97.38%, indicating better cash flow management [5][39] 6. Investment Recommendations - The report recommends focusing on leading companies in the consumer building materials sector, such as "Three Trees" and "Oriental Yuhong," which have shown resilience and growth potential [9] - It also suggests looking at companies with strong dividend yields and those actively expanding overseas, such as "China National Building Material" and "Conch Cement" [9]

Investment Rating - The report maintains a "Positive" outlook on the building materials industry for 2025, highlighting the potential for profit recovery and growth in specific sectors such as cement and fiberglass [1]. Core Insights - Revenue decline for the first three quarters of 2025 narrowed to 3.1% year-on-year, with total revenue reaching CNY 432.25 billion, while net profit attributable to shareholders increased by 27.8% to CNY 24.44 billion, indicating a shift from profit decline to growth [2][13]. - The cement industry showed significant profit elasticity, with a total revenue of CNY 181.23 billion for the first three quarters, down 8.4% year-on-year, but net profit surged by 148.8% to CNY 9.13 billion [26][27]. - The fiberglass sector experienced robust growth, with total revenue of CNY 49.21 billion, up 23.5%, and net profit soaring by 121.4% to CNY 4.87 billion [4][14]. - The consumer building materials segment faced pressure, with revenue declining by 0.9% to CNY 110.75 billion and net profit down 6.9% to CNY 8.21 billion, although some companies like Keda Manufacturing and Sanke Tree showed strong performance [4][5]. - The glass industry remains under pressure, with revenue dropping 11.0% to CNY 38.09 billion and net profit declining 63.2% to CNY 0.94 billion, necessitating attention to supply adjustments and pricing strategies [4][5]. - Early-cycle sectors are still under pressure, but leading companies like Subote have reported revenue and profit growth, driven by significant project developments in key infrastructure areas [5][6]. Summary by Sections Cement Industry - The cement sector's revenue for the first three quarters was CNY 181.23 billion, with a year-on-year decline of 8.4%, while net profit increased by 148.8% to CNY 9.13 billion, indicating a recovery trend [26][27]. - Major players like Huaxin Cement and Conch Cement continue to dominate, contributing significantly to industry profits [3][26]. Fiberglass Industry - The fiberglass industry reported a total revenue of CNY 49.21 billion, reflecting a 23.5% increase, and net profit rose by 121.4% to CNY 4.87 billion, showcasing strong recovery and growth potential [4][14]. - Companies such as China Jushi and Zhongcai Technology are expected to benefit from the ongoing price recovery and expansion into specialty fabrics [4][5]. Consumer Building Materials - The consumer building materials segment saw a slight revenue decline of 0.9% to CNY 110.75 billion, with net profit decreasing by 6.9% to CNY 8.21 billion, although some firms like Keda Manufacturing reported significant growth due to strategic overseas expansions [4][5]. Glass Industry - The glass sector faced challenges, with revenue down 11.0% to CNY 38.09 billion and net profit down 63.2% to CNY 0.94 billion, highlighting the need for strategic adjustments in response to market pressures [4][5]. Early-Cycle Industry - Early-cycle sectors remain under pressure, but companies like Subote have achieved revenue and profit growth through strategic project developments in infrastructure [5][6].

Investment Rating - The industry rating is "Outperform the Market" (maintained rating) [4] Core Views - The construction materials sector has shown a 1.62% increase, outperforming the Shanghai Composite Index by 0.8 percentage points, with glass and ceramics performing relatively well [2][10] - Cement demand continues to weaken due to seasonal factors, with shipment rates down 8% year-on-year as of the latest week [2] - Despite some positive sentiment in the glass market due to production line shutdown news, high inventory levels continue to pressure the market [2] - The real estate sector is stabilizing, with some leading consumer building materials companies showing early signs of revenue improvement in Q3 [2] - The report recommends leading consumer building materials companies and high-growth overseas targets, highlighting the potential for valuation recovery in the sector [2] Summary by Sections Market Review - The Shanghai Composite Index rose by 0.82% while the construction materials sector increased by 1.62%, indicating a strong performance relative to the market [10] - Notable stock performances included Hainan Development (27.4%), Jinjing Technology (24.8%), and Sichuan Jinding (15.3%) [10] Key Recommendations - The recommended stocks include Western Cement, Huaxin Cement, Keda Manufacturing, China National Building Material, Honghe Technology, China Jushi, Rabbit Baby, Qibin Group, and Dongpeng Holdings [3][9] - The report emphasizes the potential for traditional building materials to recover as the industry approaches a cyclical bottom, with specific recommendations for cement and glass companies [16] Price Trends - The report notes that the national cement market price has decreased by 0.1% week-on-week, with regional price fluctuations observed [15] - The average price of float glass has decreased slightly, indicating a stable but cautious market environment [15]

Group 1: China Jushi (600176.SH) - The company achieved a revenue of 139.04 billion yuan in the first three quarters of 2025, representing a year-on-year increase of 19.53% [6] - The net profit attributable to shareholders reached 25.68 billion yuan, up 67.51% year-on-year, with a non-recurring net profit of 26.12 billion yuan, increasing by 125.91% [6][9] - The company is expected to achieve net profits of 34.91 billion, 41.07 billion, and 46.48 billion yuan from 2025 to 2027, driven by the recovery of fiberglass prices and demand from various downstream sectors [9] Group 2: Transsion Holdings (688036.SH) - The company reported a revenue of 204.66 billion yuan in Q3 2025, a year-on-year increase of 22.60%, while the net profit attributable to shareholders was 9.35 billion yuan, down 11.06% year-on-year [11] - The company is expected to achieve revenues of 694.0 billion, 751.7 billion, and 871.6 billion yuan from 2025 to 2027, with net profits of 38.2 billion, 56.7 billion, and 70.8 billion yuan respectively [13] Group 3: Tonglian Precision (688210.SH) - The company reported a revenue of 2.4 billion yuan in Q3 2025, a year-on-year increase of 5.75%, while the net profit attributable to shareholders was 884,000 yuan, down 91.67% year-on-year [15] - The company is expected to achieve revenues of 11.4 billion, 15.5 billion, and 21.1 billion yuan from 2025 to 2027, with net profits of 1.0 billion, 1.9 billion, and 2.9 billion yuan respectively [17] Group 4: Topband Co., Ltd. (002139.SZ) - The company achieved a revenue of 26.9 billion yuan in Q3 2025, a slight increase of 0.1% year-on-year, while the net profit attributable to shareholders was 900 million yuan, down 44.7% year-on-year [18] - The company is expected to achieve net profits of 6.2 billion, 8.5 billion, and 10.8 billion yuan from 2025 to 2027 [19] Group 5: Inspur Information (000977.SZ) - The company reported a revenue of 1206.69 billion yuan in the first three quarters of 2025, a year-on-year increase of 45%, with a net profit of 14.82 billion yuan, up 15% year-on-year [25] - The company is expected to achieve net profits of 26.38 billion, 37.31 billion, and 47.77 billion yuan from 2025 to 2027 [26] Group 6: Benda Pharmaceutical (300558.SZ) - The company achieved a revenue of 27.17 billion yuan in the first three quarters of 2025, a year-on-year increase of 15.90%, while the net profit attributable to shareholders was 3.17 billion yuan, down 23.86% year-on-year [28] - The company is expected to achieve revenues of 35.50 billion, 43.71 billion, and 53.09 billion yuan from 2025 to 2027, with net profits of 5.73 billion, 7.21 billion, and 8.56 billion yuan respectively [29] Group 7: XWANDA (300207.SZ) - The company reported a revenue of 435.34 billion yuan in the first three quarters of 2025, a year-on-year increase of 13.73%, with a net profit of 14.05 billion yuan, up 15.94% year-on-year [35] - The company is expected to achieve net profits of 21.83 billion, 30.29 billion, and 40.31 billion yuan from 2025 to 2027 [37] Group 8: YH Technology (688080.SH) - The company achieved a revenue of 2 billion yuan in Q3 2025, a year-on-year increase of 34.5%, with a net profit of 400 million yuan, up 17.5% year-on-year [39] - The company is expected to achieve net profits of 1.5 billion, 2 billion, and 2.6 billion yuan from 2025 to 2027 [40] Group 9: Zhongji Xuchuang (300308.SZ) - The company reported a revenue of 102.2 billion yuan in Q3 2025, a year-on-year increase of 56.8%, with a net profit of 31.4 billion yuan, up 125% year-on-year [42] - The company is expected to achieve net profits of 107 billion, 205 billion, and 268 billion yuan from 2025 to 2027 [43] Group 10: Dongfang Tower (002545.SZ) - The company achieved a revenue of 33.92 billion yuan in the first three quarters of 2025, a year-on-year increase of 9.05%, with a net profit of 8.28 billion yuan, up 77.57% year-on-year [44] - The company is expected to achieve net profits of 12.68 billion, 14.46 billion, and 17.19 billion yuan from 2025 to 2027 [46]

Group 1: Cement Industry - The cement industry experienced a year-on-year production decline of 7% in Q3 2025, with average prices also decreasing. However, the drop in raw material prices supported the gross profit per ton to remain stable year-on-year [1] - In Q4, coal prices rebounded, increasing by 8% in October compared to September, which may lead to marginal cost increases for cement [1] - If the industry strictly limits overproduction in 2026, capacity utilization rates could recover to over 60%, which, along with staggered production execution, may support industry profitability recovery [1] Group 2: Consumer Building Materials - Key consumer building materials companies reported a combined revenue decline of 3% year-on-year in Q3 2025, with a gross margin decrease of 1.2 percentage points, although the decline rate has narrowed [2] - The sector has implemented strict cost control measures, leading to a slight improvement in cash flow [2] - It is recommended to consider undervalued stocks in segments where supply and price competition are easing, such as home decoration coatings and waterproof materials, as well as in stable demand sectors like coatings and gypsum boards [2] Group 3: Glass Fiber - The glass fiber sector saw improvements in both revenue and gross margin year-on-year in Q3 2025, with stable prices for wind power yarn and thermoplastic short-cut products [3] - There is potential for price increases in both roving and electronic fabrics, indicating a balanced industry outlook for 2026 [3] - Special glass fiber fabrics are expected to maintain rapid growth driven by AI advancements [3] Group 4: Glass Industry - The glass industry continues to face pressure from construction, with float glass profitability at a low point [4] - Looking ahead to 2026, after price declines in the off-season, some cash flow-negative capacities may undergo cold repairs, which could gradually improve supply-demand relationships [4]

Industry Investment Rating - The investment rating for the construction materials industry is "Outperform the Market" and is maintained [1] Core Views - The construction materials industry is currently at a cyclical bottom in terms of profitability, with leading companies in various segments performing in line with expectations. For instance, China Jushi in the fiberglass sector has seen a significant year-on-year improvement in profitability, while companies like Rabbit Baby have also reported substantial profit improvements due to investment income. Other leading companies such as Oriental Yuhong, Beixin Building Materials, Qibin Group, and Jianlang Hardware are also showing signs of bottoming out in their fundamentals. It is anticipated that stock prices may break out of the bottom range under the influence of policy catalysts and market style shifts [4][5] Summary by Relevant Sections Cement - Demand for cement has shown a slight month-on-month improvement, primarily due to infrastructure projects and better weather conditions, although year-on-year demand remains down. The overall demand is still in a weak recovery phase, influenced by weather disruptions and the pace of demand release. In September 2025, the monthly cement production was 154 million tons, down 8.6% year-on-year [5][10] Glass - The glass industry is experiencing a continuous decline in demand due to the impact of real estate. Short-term demand during the traditional peak season has shown limited improvement, and inventory levels among intermediaries remain relatively high. The supply-demand imbalance persists, with limited improvement in downstream terminal demand. The industry is expected to face increased environmental requirements and costs, accelerating the pace of cold repairs [5][17] Fiberglass - The fiberglass sector is witnessing a price recovery, with price increases of 5%-10% reported. The demand for electronic yarns is driven by the AI industry, leading to a significant increase in both volume and price. The demand is expected to continue growing alongside AI developments [6] Consumer Building Materials - The profitability of the consumer building materials sector has reached a bottom, with prices having no further downward space after years of competition. The sector is strongly advocating for price increases and profitability improvements, with several categories like waterproofing, coatings, and gypsum boards issuing price increase notices this year. A recovery in profitability is anticipated for leading companies in the second half of the year [6] Recent Company Announcements - Conch Cement reported Q3 revenue of 20 billion yuan, down 11.4% year-on-year, but net profit increased by 3.4% year-on-year to 1.94 billion yuan, benefiting from cost reductions and improved gross margins. Q3 revenue for Qibin Group was 4.39 billion yuan, up 18.9% year-on-year, with a net profit of 20 million yuan, marking a return to profitability [19][20][22]

Investment Rating - The report suggests focusing on the lithium hexafluorophosphate sector and undervalued growth stocks [5] Core Viewpoints - The chemical sector showed a 2.50% increase in the week of October 5, outperforming the Shanghai A-share index by 2.38 percentage points [2][11] - The report highlights the significant price increases in products such as vitamin VE and sulfuric acid, indicating a positive trend in the chemical market [4][18] - Recommended stocks include Duofluorite, which benefits from rising lithium hexafluorophosphate prices, and Huagong Technology, which is a stable growth leader in surfactants [5] Summary by Sections Industry Performance - The chemical sector had 26 sub-industries rising and 6 declining, with the top gainers being phosphate and phosphate salts (+11.32%) and inorganic salts (+8.94%) [3][15] - The dynamic PE of the chemical sector is 24.39 times, higher than the average PE of 8.06 since 2015 [2][11] Chemical Prices and Spreads - The top five products with the highest weekly price increases include liquid chlorine (+12.78%) and vitamin VE (+8.7%) [4][18] - The spreads for products like styrene-butadiene rubber increased significantly, with the highest being +26.39% for styrene-butadiene rubber spread [38][41] Inventory Changes - Significant inventory changes were noted, with polyester filament showing a decrease of 33.30% [5][61] Industry News Recap - Recent industry news indicates a substantial increase in imports and production recovery in the chemical sector, driven by lower costs and improved demand [88]