Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The current steel fundamentals are in a "weak balance" state. Although demand is marginally improving and inventory is gradually being depleted, there is no strong trend - driving force yet. Attention should be paid to the release rhythm of peak - season demand and the impact of raw material price fluctuations on the cost side [2]. - Due to negotiation issues and overseas geopolitical conflicts, iron ore prices are fluctuating widely. There is a need to pay attention to subsequent negotiation progress and geopolitical situation development [5]. - In the short term, short - selling operations may not be appropriate before the Iran - US situation eases significantly. It is advisable to look for short - term rebound opportunities in undervalued and highly elastic varieties [9][15]. - For manganese silicon, factors such as supply - demand pattern, high inventory, and weak downstream demand are mostly priced in. Future market trends are mainly influenced by the overall market sentiment, cost push from manganese ore, and supply contraction (or contraction expectations) of ferrosilicon [10]. - In the short term, coking coal prices may have upward pulses due to market sentiment spillover, but in the medium - to - long term, coking coal prices are expected to be optimistic from June to October [15]. - Industrial silicon is expected to fluctuate weakly under cost support, while polysilicon is expected to be under pressure and fluctuate in the short term [18][20]. - Float glass is expected to maintain a wide - range oscillation pattern, and soda ash is expected to maintain a weak trend in the short term. Attention should be paid to the actual demand release rhythm during the "Golden March and Silver April" and the inventory changes in major production areas [23][25]. Summary According to Relevant Catalogs Steel Market Information - The closing price of the rebar main contract was 3135 yuan/ton, a decrease of 5 yuan/ton (-0.15%) from the previous trading day. The registered warehouse receipts were 41,676 tons, a net increase of 27 tons. The position of the main contract was 1.4492 million lots, a net decrease of 65,665 lots. In the spot market, the aggregated price in Tianjin was 3200 yuan/ton, unchanged from the previous day, and the aggregated price in Shanghai was 3240 yuan/ton, a decrease of 20 yuan/ton [1]. - The closing price of the hot - rolled coil main contract was 3302 yuan/ton, a decrease of 8 yuan/ton (-0.24%) from the previous trading day. The registered warehouse receipts were 473,996 tons, a net decrease of 292 tons. The position of the main contract was 1.1432 million lots, a net decrease of 28,781 lots. In the spot market, the aggregated price in Lecong was 3280 yuan/ton, unchanged from the previous day, and the aggregated price in Shanghai was 3280 yuan/ton, a decrease of 10 yuan/ton [1]. Strategy Viewpoints - The real - estate data from January to February was still weak. The real - estate investment repair momentum was insufficient, and the terminal demand was likely to remain weak. The hot - rolled coil demand recovered quickly, the output increased slightly, and the inventory entered the depletion stage. The rebar supply and demand both increased, and the inventory decreased slightly, showing a neutral performance overall [2]. Iron Ore Market Information - The main contract of iron ore (I2605) closed at 807.50 yuan/ton, with a change of -0.43% (-3.50). The position changed by -8625 lots to 446,900 lots. The weighted position of iron ore was 866,600 lots. The spot price of PB fines at Qingdao Port was 791 yuan/wet ton, with a basis of 32.78 yuan/ton and a basis rate of 3.90% [4]. Strategy Viewpoints - The overseas ore shipments in the latest period rebounded month - on - month. The shipments from Australia increased, those from Brazil remained stable, and the shipments from non - mainstream countries increased slightly. The near - end arrivals decreased. The daily average pig iron output increased by 69,500 tons to 2.2815 million tons. The blast furnaces that resumed production were mainly in Hebei after the end of production restrictions. The pig iron output is expected to continue to rise. The steel mill profitability rate continued to rise slightly. The port inventory decreased slightly from the high level, and the steel mill's imported ore inventory increased. Overall, the overseas supply of iron ore fluctuated at a high level and declined marginally. The BHP negotiation issue intensified the expectation of resource structural tension. The iron ore price fluctuated widely due to negotiation issues and overseas geopolitical conflicts [5]. Manganese Silicon and Ferrosilicon Market Information - On March 19, the main contract of manganese silicon (SM605) rose 0.81% intraday and closed at 6188 yuan/ton. The spot price of 6517 manganese silicon in Tianjin was 6000 yuan/ton, with a conversion to the futures price of 6190 yuan/ton, a premium of 2 yuan/ton to the futures price. The main contract of ferrosilicon (SF605) rose 0.48% intraday and closed at 5824 yuan/ton. The spot price of 72 ferrosilicon in Tianjin was 6000 yuan/ton, a premium of 176 yuan/ton to the futures price [8]. Strategy Viewpoints - The supply - demand pattern of manganese silicon was still not ideal, but these factors were mostly priced in. The fundamentals of ferrosilicon were good. The future market trends of manganese silicon and ferrosilicon were mainly influenced by the overall market sentiment, cost push from manganese ore, and supply contraction (or contraction expectations) of ferrosilicon. Attention should be paid to possible restrictive measures on manganese ore exports in South Africa and Gabon and the progress of the "dual - carbon" policy [10]. Coking Coal and Coke Market Information - On March 19, the main contract of coking coal (JM2605) initially rose due to the influence of crude oil sentiment but then fell due to the market environment, and finally rose 0.26% intraday and closed at 1159.5 yuan/ton. The spot price of low - sulfur main coking coal in Shanxi was 1464.9 yuan/ton, with a conversion to the futures price of 1272.5 yuan/ton, a premium of 113 yuan/ton to the futures price; the spot price of medium - sulfur main coking coal in Shanxi was 1300 yuan/ton, with a conversion to the futures price of 1284 yuan/ton, a premium of 124.5 yuan/ton to the futures price; the price of Mongolian 5 cleaned coal in Wubulang Jinquan Industrial Park was 1240 yuan/ton, with a conversion to the futures price of 1215 yuan/ton, a premium of 55.5 yuan/ton to the futures price. The main contract of coke (J2605) fell 0.03% intraday and closed at 1721.0 yuan/ton. The spot price of quasi - first - grade wet - quenched coke at Rizhao Port was 1470 yuan/ton, unchanged from the previous day, with a conversion to the futures price of 1725.5 yuan/ton, a premium of 4.5 yuan/ton to the futures price; the spot price of quasi - first - grade dry - quenched coke in Lvliang was 1495 yuan/ton, unchanged from the previous day, with a conversion to the futures price of 1710.5 yuan/ton, a discount of 10.5 yuan/ton to the futures price [12]. Strategy Viewpoints - Last week, coking coal prices benefited from the energy sentiment premium brought by the high - level crude oil due to the continuous perturbation of the Middle - East situation, and coke prices mainly followed the cost - side coking coal price fluctuations. In the short term, short - selling operations may not be appropriate before the Iran - US situation eases significantly. The inventory structure will show that downstream steel mills and coking plants actively reduce inventory, and upstream mines accumulate inventory, which will restrict the demand for coking coal and coke in the short term. In the medium - to - long term, coking coal prices are expected to be optimistic from June to October [14][15]. Industrial Silicon and Polysilicon Market Information - Industrial silicon: The closing price of the main contract of industrial silicon (SI2605) was 8285 yuan/ton, a change of -1.07% (-90). The weighted contract position increased by 14,461 lots to 378,927 lots. The spot price of non - oxygen - blown 553 in East China was 9100 yuan/ton, a decrease of 100 yuan/ton from the previous day, with a basis of 815 yuan/ton for the main contract; the spot price of 421 was 9600 yuan/ton, unchanged from the previous day, with a basis of 515 yuan/ton for the main contract after conversion to the futures price [17]. - Polysilicon: The closing price of the main contract of polysilicon (PS2605) was 38,550 yuan/ton, a change of -3.88% (-1555). The weighted contract position decreased by 3390 lots to 50,915 lots. The average price of N - type granular silicon was 44 yuan/kg, unchanged from the previous day; the average price of N - type dense material was 42 yuan/kg, a decrease of 1 yuan/kg from the previous day; the average price of N - type re - feeding material was 43.75 yuan/kg, a decrease of 1.75 yuan/kg from the previous day. The basis of the main contract was 5200 yuan/ton [19]. Strategy Viewpoints - Industrial silicon: The supply - demand pattern was weak on both sides. Due to the influence of overseas geopolitical conflicts and energy price fluctuations, the cost support was relatively solid. It is expected to fluctuate weakly under cost support [18]. - Polysilicon: The fundamentals were weak, and the price pressure remained. The inventory of the silicon wafer link was slowly depleted, and the downstream enterprise operating rate recovery was less than expected. The polysilicon inventory pressure increased, and the downstream restocking was only for rigid demand. The market new orders were few, and the price declined. The futures price is expected to be under pressure and fluctuate in the short term [20]. Glass and Soda Ash Market Information - Glass: The main contract of glass closed at 1066 yuan/ton on Thursday afternoon, a decrease of 2.56% (-28). The quoted price of large - size glass in North China was 1070 yuan, unchanged from the previous day; the quoted price in Central China was 1090 yuan, unchanged from the previous day. On March 19, the weekly inventory of float glass sample enterprises was 74.436 million cases, a decrease of 1.413 million cases (-1.86%). In terms of positions, the top 20 long - position holders reduced 4218 long positions, and the top 20 short - position holders reduced 17,285 short positions [22]. - Soda ash: The main contract of soda ash closed at 1211 yuan/ton on Thursday afternoon, a decrease of 2.57% (-32). The quoted price of heavy soda ash in Shahe was 1201 yuan, unchanged from the previous day. On March 19, the weekly inventory of soda ash sample enterprises was 1.8538 million tons, a decrease of 77,900 tons (-1.86%), among which the inventory of heavy soda ash was 890,700 tons, a decrease of 27,400 tons, and the inventory of light soda ash was 963,100 tons, a decrease of 50,500 tons. In terms of positions, the top 20 long - position holders reduced 6678 long positions, and the top 20 short - position holders reduced 25,634 short positions [24]. Strategy Viewpoints - Glass: The Middle - East geopolitical situation led to an increase in fuel costs, providing cost support. The market demand improved slightly, and the overall trading activity increased. It is expected to maintain a wide - range oscillation pattern in the short term, and attention should be paid to the actual demand release rhythm during the "Golden March and Silver April" and the inventory changes in major production areas. The reference range for the main contract is 1030 - 1110 yuan/ton [23]. - Soda ash: The Middle - East geopolitical situation led to an increase in international oil prices, driving up the prices of coal - chemical and soda ash. However, as the situation stagnated, the upward momentum of coal - chemical weakened. The supply was relatively abundant, and the demand for raw material restocking by glass enterprises was still strong. It is expected to maintain a weak trend in the short term, and attention should be paid to the actual demand release rhythm during the "Golden March and Silver April" and the inventory changes in main production areas. The reference range for the main contract is 1180 - 1250 yuan/ton [25].

Summary of Conference Call Records Industry Overview - The conference call focuses on the construction and building materials industry in China, particularly highlighting the developments in coal chemical projects and the transition of state-owned enterprises towards hydrogen energy operations. Key Points Coal Chemical Industry - China Chemical's coal chemical orders are expected to accelerate, reaching approximately 100 billion yuan by 2026, which will account for over 20% of total orders, significantly higher than the 10-20 billion yuan level in 2023 [1][2] - The coal chemical project reserves in Xinjiang exceed 500 billion yuan, with China Chemical holding an 80% market share, ensuring profitability above the industry average [1][2] - In 2025, China Chemical's new coal chemical contracts are projected to be around 70 billion yuan, showing a notable increase from approximately 50 billion yuan in the previous three quarters [2] Transition of State-Owned Enterprises - China Energy Construction is transitioning from traditional engineering construction to becoming a hydrogen energy operator, with an initial phase of an 800,000-ton green ammonia project already in production, expected to contribute profits by 2026 [1][4] - The valuation of major state-owned construction enterprises is currently low, with price-to-earnings ratios around 6-7 times, indicating potential for valuation recovery [1][4] Market Expectations and Policy Impacts - The 2026 special bond quota is expected to increase, and significant engineering projects are set to commence, although post-holiday resumption of work shows only a 1-2% increase in demand [1][4] - The construction materials industry is closely monitoring the 2027 carbon tax guidelines and supply-side production restriction policies, with the central government's push for consolidation among state-owned enterprises being a key observation point [1][5] Future Directions in the Building Materials Sector - The building materials sector is expected to see improvements in demand, although current new construction data shows only slight growth [5] - The combination of "dual carbon" policies and measures to reduce competition in the industry will be critical in shaping the market landscape [5] - The potential for consolidation among state-owned enterprises could break the current market expectations, providing opportunities for investors seeking undervalued assets [5] Additional Insights - The transition of China Energy Construction to hydrogen energy operations is seen as a significant shift that could lead to a revaluation of the company, similar to past trends observed in other state-owned enterprises [4] - The execution progress of coal chemical projects is reportedly on track, suggesting stable performance for companies involved in these projects in the first quarter of 2026 [2][4]

Group 1: Overall Economic Trends - The total retail sales of consumer goods in January-February 2026 increased by 2.8% year-on-year, driven by the long Spring Festival holiday, which boosted dining and travel demand, along with new subsidy funds [12][20] - The retail sales excluding automobiles reached 79,827 billion yuan, growing by 3.7% year-on-year, indicating a compound annual growth rate of 3.4% over two years [12][20] Group 2: Consumer Demand Insights - The consumption structure continues to upgrade, with service and dining retail sales growing faster than goods retail sales, and online retail sales of physical goods outpacing overall retail growth [20] - Essential consumption categories showed widespread improvement, with year-on-year growth in staple food, beverages, and clothing, while tobacco sales turned positive [20][16] - The new "trade-in" subsidy program, along with platform subsidies and Spring Festival activities, led to positive growth in home appliances and furniture, while communication equipment maintained high growth [20][16] Group 3: Information Technology Sector - The Philadelphia Semiconductor Index declined, while the Taiwan Semiconductor Industry Index and DXI Index increased [7] - DRAM prices showed a mixed trend, with the DRAM Index rising by 4.13% and NAND Index also increasing, while DDR5 DRAM prices fell [7][10] Group 4: Midstream Manufacturing Sector - The prices in the new energy supply chain mostly declined, and the automotive production turned negative with a year-on-year decline of 7.52% [7][19] - The sales of major engineering machinery companies mostly turned negative in February, indicating a slowdown in the manufacturing sector [7][19] Group 5: Resource Sector Tracking - The average transaction volume of construction steel increased, while coal prices showed mixed trends with some declines in specific regions [5][22] - Brent crude oil prices rose significantly, with a week-on-week increase of 17.15%, contributing to a general rise in chemical product prices [9][24] Group 6: Financial and Real Estate Sector - The monetary market saw a net absorption, with SHIBOR rates declining, while the turnover rate and daily transaction volume in the A-share market decreased [5][29] - The transaction area of new houses and the sales area of commercial housing showed a year-on-year decline, although the decline in real estate development investment narrowed [5][31]

Group 1: Economic Outlook and Asset Allocation Strategy - The article discusses the rising concerns of stagflation due to the recent surge in oil prices, particularly in the U.S. market, influenced by potential monetary policy changes under Trump and Walsh [1] - The probability of stagflation in China is considered low, as the conditions of excessive monetary easing and rigid wages are not met [1] - Under stagflation, the recommended asset allocation is: Gold & Commodities > Real Estate & Cash > Bonds > Stocks, with sector preferences being: Energy & Resources > Manufacturing > Consumer Staples & Utilities > Technology & Finance & Discretionary [1] - The article highlights three main investment directions: high-growth cyclical sectors (non-ferrous metals, building materials, steel), undervalued high-dividend domestic financials (insurance, white goods, liquor, condiments), and sectors aligned with the 14th Five-Year Plan (innovative pharmaceuticals, nuclear fusion, deep space exploration) [1] Group 2: Coal Market Dynamics - The article notes that geopolitical conflicts in the Middle East have disrupted global natural gas supplies, leading East Asian and EU countries to shift their power generation demands towards coal [2] - China's coal consumption for chemical raw materials is increasing at a rate of 20-30 million tons annually, with new coal chemical projects under construction requiring approximately 243 million tons of coal [2] - Indonesia, as the world's largest coal exporter, plans to significantly reduce its coal production quota to around 600 million tons by January 2026, a decrease of over 24% from the actual production of 790 million tons in 2025, which may tighten China's coal supply [2] - It is estimated that Indonesia's coal exports to China could decrease by 2-4 million tons in 2026, accounting for 4%-8% of China's total imports in 2025 [2] - The coal sector is characterized by high profitability, strong cash flow, and high dividends, making it a valuable asset with a high safety margin [3]

Investment Rating - The industry investment rating is "Overweight" for both the construction and building materials sectors [6]. Core Insights - Infrastructure investment in January-February 2026 showed a year-on-year increase of 11.4%, while real estate and manufacturing investments decreased by 11.1% and increased by 3.1%, respectively. The overall performance of infrastructure investment is positive, but sustainability remains to be observed due to the late timing of the Spring Festival [1]. - The report suggests focusing on opportunities in waterproofing and engineering pipe materials, as well as the impact of rising raw material prices on consumer building materials [1]. - The report highlights the potential for recovery in the building materials sector, with a narrowing decline in housing prices in major cities, indicating a possible improvement in retail sales of building materials [2]. Summary by Sections Infrastructure and Real Estate - In January-February 2026, infrastructure investment increased by 11.4% year-on-year, while real estate sales, new starts, and completions decreased by 13.5%, 23.1%, and 27.9%, respectively [1][2]. - The report emphasizes the need to monitor the sustainability of infrastructure investment growth and suggests that the recovery in real estate sales could signal a rebound in building materials sales [2]. Building Materials - The average price of cement in January-February 2026 was 351 RMB/ton, a decrease of 14.5% from December 2025 and 2.3% year-on-year. The average cement shipment rate was 28.0%, showing a year-on-year increase of 3.6% [3]. - The report notes that the price of flat glass has been under pressure, with a year-on-year decrease of 17.4% in January-February 2026, despite some support from production line cold repairs [4]. Stock Recommendations - The report recommends several stocks with a "Buy" rating, including: - Dongfang Yuhong (002271 CH) with a target price of 25.87 RMB - Yaxiang Integration (603929 CH) with a target price of 235.62 RMB - Zhongcai International (600970 CH) with a target price of 14.64 RMB - China Chemical (601117 CH) with a target price of 12.05 RMB - China Liansu (2128 HK) with a target price of 6.35 HKD [8][32].

Core Viewpoint - The article discusses the potential investment opportunities in various sectors amid rising concerns of "stagflation" in overseas economies, suggesting a focus on upstream resource products, essential consumer goods, and sectors benefiting from government policies and technological advancements [5]. Group 1: Investment Strategies - In the event of stagflation, upstream resource products such as oil, coal, non-ferrous metals, and agricultural products are recommended as core holdings [5]. - Essential consumer sectors including food and beverage, pharmaceuticals, and essential retail are highlighted as stable investment options [5]. - The article suggests exploring hard technology sectors like semiconductors, aerospace, high-end equipment manufacturing, and AI computing as flexible investment choices, alongside traditional and new infrastructure related to government spending [5]. Group 2: Market Performance - The article notes that the domestic equity market showed mixed performance, with the ChiNext Index rising by 2.51% [6]. - New energy-themed funds outperformed, with a net value increase of 4.22%, while other sector-themed funds experienced declines [6]. - The issuance of public funds, particularly FOF products, has been robust, with 30 new funds established, including 7 FOF funds [6]. Group 3: Sector-Specific Insights - The article mentions that oriented silicon steel prices have increased for the first time since October 12, 2024, indicating a potential upward trend in metal prices [7]. - The construction materials sector is experiencing significant price increases, with a focus on traditional materials and new materials, particularly in the fiberglass and electronic fabric segments [9]. - The disposable glove industry is expected to see price increases, benefiting domestic leading companies due to cost control and market share expansion [10].

Group 1 - The core viewpoint of the article highlights the price increases in the consumer building materials sector, driven by rising raw material costs, particularly asphalt, which has surged by 33% to 4650 yuan/ton from early 2026 to March 13 [4] - Major waterproofing companies such as Oriental Yuhong, Beixin Waterproof, and Keshun Co. have announced price hikes in a coordinated manner, indicating a unified response to industry cost pressures [4] - Leading paint manufacturers, including Nippon Paint, Sankeshu, and Jiaboli, have also issued price increase notices, with adjustments ranging from 5% to 15% due to significant rises in core raw materials like emulsions and titanium dioxide [4] Group 2 - The "14th Five-Year Plan" emphasizes the optimization and upgrading of traditional industries, urging the building materials sector to focus on capacity optimization in traditional materials like cement and glass, while also promoting advanced new materials such as high-end electronic fiberglass and heat-resistant ceramics [5]

Investment Rating - The report maintains an "Overweight" rating for the construction and engineering sector, as well as for building materials [10]. Core Insights - The report highlights a price increase chain in the building materials sector, which is now extending to carbon fiber and architectural coatings due to rising raw material costs and the onset of the regular demand peak season [1][12]. - The domestic carbon fiber market has seen a breakthrough in the T1200 grade, with leading companies initiating a new round of price increases, indicating high industry demand [1][12]. - The report emphasizes the importance of monitoring whether price increases during the regular peak season exceed expectations, recommending companies such as Yaxiang Integration, China National Materials, Sichuan Road and Bridge, and others [1][12][15]. Summary by Sections Building Materials Sector - Recent price increases have been observed in various building materials, including waterproofing materials and gypsum boards, with architectural coatings and ceramics following suit [1][12]. - The report notes that the average price of cement has decreased by 0.3% week-on-week, with a 24.7% shipment rate, reflecting a 9.5% increase month-on-month but a 20.1% decrease year-on-year [2][22]. - The average price of domestic float glass is reported at 63 yuan per weight box, showing a 1.2% increase week-on-week but a 10.4% decrease year-on-year [2][23]. Key Companies and Dynamics - Yaxiang Integration reported a revenue of 4.907 billion yuan for the year, with a net profit of 892 million yuan, reflecting a year-on-year increase of 40.3% [3]. - The report recommends several companies for investment, including Yaxiang Integration, Sichuan Road and Bridge, China National Materials, and others, all rated as "Buy" [10][34]. - The report indicates that the construction sector is experiencing a recovery in demand, particularly in the renovation market, with significant increases in second-hand housing transactions in Shanghai [15]. Price Trends and Market Dynamics - The report outlines two pricing scenarios: seasonal price increases driven by demand recovery post-holidays and off-season price increases reflecting stronger supply dynamics [13]. - The report anticipates that the construction materials sector will see a "L"-shaped recovery, with waterproof materials likely to stabilize in terms of volume and price [16][17]. - The carbon fiber market has seen a price increase of 5,000 yuan per ton for wet-process products due to strong demand [2][21]. Future Outlook - The report suggests that the construction materials industry must accelerate its transformation and upgrade to capture long-term growth opportunities, particularly in technology-driven segments [14]. - The report also highlights the potential for growth in sectors related to cleanroom engineering and special electronic fabrics, driven by high demand in AI technology [14]. - The overall sentiment remains positive for the renovation market, with expectations of continued demand for building materials in the coming months [15].

Group 1: Macroeconomic Liquidity - The US dollar index continued to rise, and the degree of inversion in the China-US interest rate spread deepened, with inflation expectations also increasing [2][16] - Offshore US dollar liquidity has marginally tightened, while the domestic interbank funding situation remains balanced [2][23] Group 2: Market Trading Activity and Volatility - Market trading activity has decreased, with major indices experiencing increased volatility; sectors such as oil and petrochemicals, electric new energy, public utilities, and construction are above the 90th percentile in trading activity [3][28] - The volatility of major indices, including the CSI 300 and ChiNext, has continued to rise, with steel and military sectors also showing volatility above the 90th historical percentile [3][35] Group 3: Institutional Research - The banking, electronics, electric new energy, computing, and automotive sectors are leading in research activity, with banking and automotive sectors showing a month-on-month increase in research heat [4][46] Group 4: Analyst Forecasts - Analysts have simultaneously raised net profit forecasts for the entire A-share market for 2026/2027, with increases noted in sectors such as electric new energy, non-ferrous metals, construction, machinery, and pharmaceuticals [5][19] - The proportion of stocks with upward revisions in net profit forecasts for 2026/2027 has increased across the A-share market [5][17] Group 5: Northbound Trading Activity - Northbound trading activity has decreased, continuing to net sell A-shares, with a notable increase in the buy/sell ratio for electric new energy, electronics, and automotive sectors [6][32] - Northbound trading primarily net bought coal and oil and petrochemical sectors, while net selling occurred in electronics, computing, and chemicals [6][33] Group 6: Margin Financing Activity - Margin financing activity has slightly increased but remains at a low level, with net buying primarily in electric new energy, chemicals, and computing sectors [7][35] - The proportion of financing purchases has increased across most sectors, with net buying focused on mid-cap growth and mid/small-cap value stocks [7][38] Group 7: Active Equity Funds and ETFs - Active equity funds have increased their positions, particularly in military, machinery, and automotive sectors, while reducing positions in non-ferrous metals, oil and petrochemicals, and steel [9][45] - ETFs have continued to experience net redemptions, particularly in broad-based indices like CSI 500, CSI 300, and ChiNext, while sectors such as electric power and public utilities saw net inflows [9][52]

Investment Rating - The industry rating is "Outperform the Market" [7][73]. Core Insights - The report highlights that the Shanghai real estate market is experiencing a recovery, with the easing of purchase restrictions continuing to have a positive effect. Recent data shows that the number of second-hand homes sold in Shanghai reached 1,324 units in a single day, breaking the 1,300 mark for the first time in 315 days [3][12]. - The report emphasizes that the easing of monetary and fiscal policies in China, alongside the recent decline in interest rates, is expected to boost home buying intentions and stabilize the real estate market. The report also notes that the construction materials sector is likely to benefit from supply-side reforms and a potential turning point in the capacity cycle [3][5]. Summary by Sections Market Overview - The report discusses various government initiatives aimed at supporting major projects and improving living conditions, including increased loan limits for home purchases in several cities and financial incentives for housing upgrades [3][12]. - It mentions that the PPI has been in negative growth for 41 consecutive months, and there is a growing expectation for it to turn positive, which could benefit the construction materials sector [3][12]. High-Frequency Data - As of March 13, 2026, the average price of bulk P.O 42.5 cement in China is 323.4 CNY/ton, showing a 0.3% decrease from the previous week and a 19.4% decrease year-on-year [4][13]. - The average price of glass (5.00mm) is reported at 1,158.6 CNY/ton, reflecting a 2.0% increase from the previous week but a 9.7% decrease year-on-year [4][25]. Investment Recommendations - The report suggests focusing on three main investment lines: 1. High-quality companies benefiting from stock renovations, such as Weixing New Materials and Beixin Building Materials [5]. 2. Undervalued stocks with long-term alpha attributes, like Sankeshu and Dongfang Yuhong [5]. 3. Leading cyclical construction material companies that are bottoming out, including Huaxin Cement and Conch Cement [5].