Investment Rating - The industry view for China Materials is rated as Attractive [6] Core Insights - Cement is preferred due to supply discipline, price coordination, lower costs, and no impact from trade wars. The building materials sector is recovering from improved secondary property sales [1][2] - The cement industry is experiencing margin expansion and has formed new alliances to focus on profit rather than volume. A 5-10% year-over-year decline in demand is expected, but margin recovery is anticipated due to lower coal prices and effective supply control measures [2][3] - Late-cycle building materials are recovering, supported by better secondary home sales and government initiatives. However, demand remains soft due to declining property starts and completions [3] - The float glass segment is facing weak fundamentals, with low demand from property developers and high supply levels continuing to pressure earnings [4] Summary by Sections Cement - Major cement players have agreed to prioritize profit over market share, leading to a healthier price recovery despite weak property demand. The industry is expected to see a margin recovery due to lower coal prices and effective supply control policies [2] - Top producers like Conch, CNBM, and CR Cement are likely to benefit from new supply control measures aimed at reducing overproduction [2] Building Materials - The late-cycle building materials sector is expected to see mild growth in new infrastructure and industrial investments, with demand improving from better secondary home sales and government programs [3] - Companies such as Yuhong, Weixing, and Lesso are identified as potential beneficiaries of this recovery [3] Float Glass - The float glass market is currently weak, with low order days at processing plants and high supply levels continuing to exert pressure on earnings [4] Price Targets and Ratings - Price targets for key companies include Anhui Conch (A) at RMB 37.40 with a 47% upside, Anhui Conch (H) at HKD 29.80 with a 35% upside, and China Resources Building Materials at HKD 2.30 with a 39% upside [7][11] - Ratings for companies in the cement sector are predominantly Overweight (OW), while Xinyi Glass and Zhuzhou Kibing Glass are rated Underweight (UW) due to weak fundamentals [11][12]

Core Insights - David Tepper, a prominent investor, has shifted his portfolio by selling out of Adobe and investing in Corning, indicating a strategic move towards AI-related opportunities [3][5][6] Company Analysis - Corning is recognized as a leader in innovative glass materials, with its optical communications segment accounting for 35.3% of sales last year [7][9] - The optical segment has seen significant growth, driven by AI demand, with enterprise optical sales growing 93% in Q4 and 49% for the full year, reaching $2 billion out of $4.7 billion in total optical sales for 2024 [11][12] - Corning's "Springboard 2028" plan aims for $5 billion in incremental revenue by 2026 and $8 billion by 2028, with over half of these gains expected from the optical segment [13][16] - As of Q4 2024, Corning has already achieved an incremental revenue run rate of $2.4 billion, surpassing initial projections [14] - Corning's current valuation stands at 19.4 times 2025 earnings estimates, with a dividend yield of 2.45%, making it more attractive compared to other high-profile AI tech stocks [15] - If management meets its targets, Corning could reach $18.6 billion in revenue by 2026 and $21.6 billion by 2028, with core earnings projected at $2.7 billion in 2026 and $3.2 billion in 2028 [16][17]