Core Views - The building materials sector slightly underperformed the overall A-share market in 2025, with a return of 19.62% compared to a -4.85% excess return relative to the Wind All A Index [2][10] - The macro outlook suggests that total policies are expected to strengthen, with physical demand support likely to increase, as emphasized in the December Politburo meeting [2][15][20] - The glass fiber industry is anticipated to see a resonance between traditional and emerging fields, with demand growth expected to remain stable despite a potential slowdown [2][23][45] 2025 Market Review - The building materials sector's performance can be segmented into several phases, with notable periods of underperformance and outperformance against the A-share market [10][12] - The glass fiber sub-sector showed significant excess returns driven by high demand in wind power and thermoplastics [10][12] - The cement sub-sector experienced a boost due to improved domestic demand expectations and effective supply-side discipline [10][12] Macro Outlook - Fixed asset investment in China saw a year-on-year decline of 1.7% from January to October 2025, with infrastructure and real estate investments dropping by 0.1% and 14.7%, respectively [15][19] - The Politburo's focus on expanding domestic demand and optimizing supply is expected to lead to a moderate increase in total policies [15][20] - The anticipated fiscal spending for 2026 is projected to reach 41.62 trillion yuan, a 2.1% increase year-on-year, with a focus on effective investment [20][21] Glass Fiber Industry - The supply shock in the glass fiber industry is gradually being digested, with new capacity expected to be limited in the medium term [23][39] - The effective production capacity for glass fiber is projected to reach 759.2 million tons for roving and 107.7 million tons for electronic fabrics in 2026, representing year-on-year increases of 6.9% and 7.3%, respectively [23][40] - Demand for glass fiber is expected to remain stable, supported by wind power and thermoplastics, despite potential declines in growth rates [45][46] Cement Industry - The cement industry is expected to maintain self-discipline in supply, with a focus on eliminating outdated capacity, which will support profitability [3][20] - The exit of 10,952 million tons of outdated capacity is projected, which will enhance the utilization rate of clinker capacity [3][20] - The profitability of the cement sector is expected to improve in 2026, particularly in regions with significant infrastructure projects [3][20] Glass Industry - The glass industry is experiencing accelerated supply clearance, which is expected to provide price elasticity in 2026 [2][3] - The current state of losses in the industry is likely to drive the closure of high-cost production lines, leading to a potential rebound in prices in the first half of 2026 [2][3] - Long-term policies aimed at curbing disorderly competition are expected to stabilize industry profitability and enhance the competitive advantage of leading companies [2][3]

Investment Rating - The report maintains an "Outperform" rating for the construction materials industry, indicating a positive outlook compared to the broader market [3][51]. Core Insights - The construction materials sector has shown resilience with a 1.50% increase last week, outperforming the CSI 300 index by 2.6 percentage points. Year-to-date, the sector has risen 17.3%, slightly underperforming the CSI 300 index by approximately 0.4 percentage points [6][14]. - Infrastructure investment in the first ten months of 2025 has decreased by 0.1% year-on-year, but there is optimism regarding the acceleration of strategic key projects, particularly in cement, explosives, pipes, and waterproof materials [6][26]. - The report highlights a shift towards consumption upgrades, which is expected to enhance the competitive landscape in the consumer building materials segment, leading to increased market share for leading companies [6][26]. Summary by Sections Market Overview - The construction materials sector has experienced a 1.50% increase last week, with cement, glass, and renovation materials showing varied performance [6][14]. - Cement prices have seen a slight increase, with the national average price at 358 RMB/ton, reflecting a week-on-week increase of 1.1 RMB/ton [20][30]. Infrastructure Investment - National fixed asset investment reached 408914 billion RMB in the first ten months of 2025, down 1.7% year-on-year, with infrastructure investment showing a minor decline of 0.1% [6][24]. - Key sectors such as pipeline transportation, water transportation, and railway transportation have shown growth rates of 13.8%, 9.4%, and 3.0% respectively, indicating relative strength in these areas [6][24]. Cement Market Dynamics - The national cement shipment rate was approximately 46% as of November 14, 2025, with a week-on-week increase of 0.3 percentage points [20][30]. - The report notes that the overall demand for cement is expected to stabilize, with prices likely to experience fluctuations as companies aim to enhance profitability [31][30]. Glass and Fiberglass Market - The average price of float glass has decreased to 1195 RMB/ton, with a week-on-week decline of 2 RMB/ton, while inventory levels have also decreased [39][40]. - Fiberglass prices remained stable, with the average price of non-alkali fiberglass yarn in East China at 3475 RMB/ton [43][44]. Cost Trends - The report indicates that most raw material prices have decreased year-on-year, which is expected to positively impact corporate profitability in the second half of 2025 [45][47].

Summary of Conference Call on Glass Fiber and Electronic Fabric Industry Industry Overview - The glass fiber industry is experiencing a significant structural differentiation in demand for 2025, with ordinary products facing oversupply and weak terminal demand [2][3] - The rough sand market is described as "ice and fire," with poor operating conditions for ordinary winding direct sand and downstream glass fiber reinforced plastic manufacturers [1][2] Key Points Market Demand and Supply - Demand for small number products (300, 200, and 135 winding direct sand) remains stable until the end of November, but a significant decline is expected in December [3] - Domestic demand is shifting towards exports to countries like the UAE and Brazil due to shorter payment cycles [5] - The overall production and sales of manufacturers have been maintained at around 90%, but social inventory has increased from September to October, leading to cautious purchasing behavior from downstream clients [3][14] Price Trends - Prices for small and large rough sand have increased from 3,050 CNY/ton to 3,250-3,300 CNY/ton since September, with the lowest purchase price for traders and deep processing factories around 3,250 CNY/ton [6][1] - The price increase in September was supported by low price recovery and some inventory buildup, while October saw a rebound in demand for small number products, supporting large number product prices [8][12] - A new round of price increases by large manufacturers at the end of October aims to boost market confidence, although actual implementation remains uncertain [12][14] Production Adjustments - Large processing enterprises are operating at full capacity with a high export ratio (60%-70%), while small manufacturers are struggling with order differentiation [7][11] - Small manufacturers are adjusting their production structure to focus on small number products due to market demand, with some shifting to fine sand and low dielectric ultra-fine sand [11] Future Outlook - The forecast for 2026 indicates a potential narrowing of domestic thermoplastic demand due to subsidy cancellations and policy changes, while wind power demand is expected to maintain growth but with reduced volume [19][22] - Export volume is projected to increase from 2 million tons in 2025 to 2.04 million tons in 2026, while imports are expected to decrease from 110,000 tons to 100,000 tons due to increased domestic high-end product capacity [20][19] Electronic Fabric Market - Electronic fabric prices have seen a general increase, with specific products rising by 300 to 500 CNY, driven by tightening supply conditions [17] - Future price adjustments for electronic fabric are expected to be gradual, with potential increases before the end of the year [18] Trade Barriers and Market Adaptation - Trade barriers have caused some orders to experience delays, prompting manufacturers to explore new markets and channels to mitigate risks [28][29] - The industry is cautiously optimistic about demand recovery in 2026, with emerging markets like the Middle East, South America, and Southeast Asia expected to become significant growth points [29] Conclusion The glass fiber and electronic fabric industries are navigating a complex landscape characterized by fluctuating demand, price adjustments, and strategic shifts in production. The outlook for 2026 remains cautious, with potential challenges from trade barriers and changing market dynamics.

Core Insights - The company reported a revenue of 133.4 billion, a year-on-year decrease of 1%, while net profit attributable to shareholders improved significantly to 2.96 billion from a loss of 0.68 billion in the same period last year [1] Cement Sector - Tianshan shares experienced a slight reduction in losses in Q3 2025, with a sales volume of 144.1 million tons, down 12.8% year-on-year, indicating a greater decline than the industry average [2] - The company's Q3 revenue was 18.96 billion, a year-on-year decrease of 12.9%, while net profit was -0.26 billion, a year-on-year increase of 22.6% [2] Engineering Sector - China National Materials International's Q3 2025 performance remained stable year-on-year, with a revenue of 32.998 billion, a 3.99% increase, and a net profit of 2.074 billion, a 0.68% increase [3] - The Q3 revenue was 11.322 billion, a year-on-year increase of 4.48%, while net profit decreased by 1.18% to 0.653 billion [3] New Materials Sector - China National Materials Technology reported a net profit of 0.48 billion in Q3 2025, a year-on-year increase of 235% [3] - The main business faced challenges due to credit impairment losses in blade business and a temporary decline in fiberglass prices, although prices began to rise in September [3] Gypsum Board Sector - BNBM's gypsum board business faced short-term pressure, with a revenue decline of 2.25% year-on-year for the first three quarters, and a Q3 revenue drop of 6.20% [4] - The company expects revenue growth in waterproof and paint businesses due to its state-owned enterprise background and resource advantages [4] - Q3 net profit was 0.657 billion, a year-on-year decline of 29.47% [4]

Investment Rating - The investment rating for the company is "Buy" and is maintained [8][9]. Core Views - The company reported a revenue of 133.4 billion, a year-on-year decrease of 1%, while the attributable net profit was 2.96 billion, showing significant improvement compared to a loss of 0.68 billion in the same period last year. The estimated attributable net profit for Q3 2025 is 1.6 billion, up 20% from 1.33 billion in the same period last year [2][4]. Segment Summaries 1. **Cement Segment**: The company experienced a slight reduction in losses in Q3 2025. The national cement production for the first three quarters of 2025 was 1.259 billion tons, down 5.2% year-on-year. The company’s sales of cement and clinker were 144.1 million tons, a decrease of 12.8% year-on-year, indicating a more significant decline than the industry average. The single-quarter revenue for Q3 2025 was 18.96 billion, down 12.9% year-on-year, with a net profit of -0.26 billion, an increase of 22.6% year-on-year [5][6]. 2. **Engineering Segment**: The engineering business showed stable growth, with a total revenue of 32.998 billion for the first three quarters of 2025, up 3.99% year-on-year. The Q3 2025 single-quarter revenue was 11.322 billion, a year-on-year increase of 4.48%, while the net profit was 0.653 billion, down 1.18% year-on-year [6]. 3. **New Materials Segment**: The new materials segment reported a net profit of 0.48 billion in Q3 2025, a year-on-year increase of 235%. The main business saw some marginal changes, with a decrease in prices for fiberglass yarn. However, there was an improvement in the AI electronic cloth business due to increased demand and better yield rates, resulting in a net profit margin of approximately 5.7%, up 3.5 percentage points year-on-year [6][7]. 4. **North New Materials**: The gypsum board business faced short-term pressure, with a revenue decline of 2.25% year-on-year for the first three quarters of 2025, and a 6.20% decline in Q3. Despite this, the waterproof business is expected to maintain growth due to the company's strong background and funding advantages [7].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative performance increase of over 15% compared to the benchmark index within the next 6 to 12 months [4][23]. Core Insights - The company has significantly improved its performance, with a 29.1% year-on-year increase in revenue for the first three quarters of 2025, reaching 21.7 billion yuan, and a 143.2% increase in net profit attributable to shareholders, amounting to 1.48 billion yuan [6][7]. - The demand for specialty electronic fabrics is expected to grow, with the company planning to raise up to 4.48 billion yuan for projects aimed at increasing production capacity [7]. - The company is benefiting from industry self-regulation efforts to combat "involution" in the glass fiber sector, which is anticipated to lead to price recovery and improved profit margins [7]. Financial Performance Summary - For 2023A, the company reported a revenue of 25,889 million yuan, with a projected revenue of 30,214 million yuan for 2025E, reflecting a 26% year-on-year growth [4]. - The net profit attributable to shareholders is forecasted to increase from 892 million yuan in 2024A to 2,039 million yuan in 2025E, representing a 129% growth [4]. - The earnings per share (EPS) is expected to rise from 0.53 yuan in 2024A to 1.22 yuan in 2025E [4]. Industry Outlook - The wind power sector is experiencing robust growth, with a 22.1% year-on-year increase in installed capacity as of August 2025, which is expected to positively impact the company's blade business [7]. - The company is also advancing in the lithium battery separator market, with a 43% year-on-year increase in domestic separator material shipments, indicating strong demand [7]. - The report highlights the company's strategic focus on cost reduction and technological advancements in its separator business, which is expected to enhance its competitive position in the long term [7].

Core Viewpoint - The construction materials sector has experienced a decline of 2.79% this week, underperforming compared to the Shanghai Composite Index and the Wind All A Index, which fell by 0.81% and 1.37% respectively, resulting in excess returns of -1.98% and -1.41% [2][3] Group 1: Cement Market - The national high-standard cement market price is 342.7 CNY/ton, down by 1.7 CNY/ton from last week and down by 40.0 CNY/ton compared to the same period in 2024 [3][9] - The average cement inventory level among sample enterprises is 64.1%, up by 0.4 percentage points from last week but down by 1.7 percentage points year-on-year [3][9] - The average daily cement shipment rate is 45.7%, up by 0.1 percentage points from last week but down by 5.3 percentage points year-on-year [3][9] Group 2: Glass Market - The average price of float glass is 1193.0 CNY/ton, up by 3.3 CNY/ton from last week but down by 147.2 CNY/ton compared to the same period in 2024 [3][10] - The inventory of float glass among sample enterprises is 56.04 million heavy boxes, up by 0.5 million heavy boxes from last week but down by 6.92 million heavy boxes year-on-year [3][10] Group 3: Fiberglass Market - The domestic non-alkali roving market price remains stable, with mainstream transaction prices for 2400tex non-alkali winding direct yarn ranging from 3100 to 3700 CNY/ton, remaining flat compared to previous periods [4][7] - The market for electronic yarn G75 is stable, with mainstream prices ranging from 8300 to 9200 CNY/ton, also remaining flat compared to the previous week [4][7] Group 4: Investment Recommendations - Recommended companies in the cement sector include Conch Cement, Huaxin Cement, and Tianshan Cement, among others [5][9] - In the consumer building materials sector, companies such as Arrow Bathroom, Dongpeng Holdings, and Oppein Home are recommended due to expected growth in the second half of the year [5][11] - The report suggests focusing on undervalued Hong Kong-listed construction central enterprises [5]

Core Viewpoint - China Jushi achieved a net profit attributable to shareholders of 1.687 billion yuan in the first half of the year, representing a year-on-year increase of 75.51% [1] Financial Performance - The company reported a non-recurring loss of 14.14 million yuan from the disposal of non-current assets, compared to 333 million yuan in the same period last year [1] - The adjusted net profit attributable to shareholders, excluding non-recurring items, was 1.701 billion yuan, showing a significant year-on-year growth of 170.74% [1] - In Q2 alone, the company generated revenue of 4.63 billion yuan, which is a year-on-year increase of 6.28% [1] - The net profit attributable to shareholders for Q2 was 957 million yuan, reflecting a year-on-year growth of 56.58% [1] Market Position and Outlook - China Jushi is a leading enterprise in the domestic fiberglass roving and electronic cloth sector, with strong cost and structural advantages, maintaining a solid market position [1] - The company is expected to achieve net profits attributable to shareholders of 3.64 billion yuan, 3.86 billion yuan, and 4.72 billion yuan for the years 2025, 2026, and 2027, respectively [1] - Corresponding valuations are projected to be 16 times, 15 times, and 13 times for the respective years [1] - The recommendation for the stock remains a "buy" rating [1]

Core Viewpoint - The company reported significant growth in revenue and net profit for the first half of 2025, driven by improved supply-demand dynamics in the fiberglass industry and effective operational strategies [1][2]. Group 1: Financial Performance - In H1 2025, the company achieved total revenue of 9.109 billion yuan, a year-on-year increase of 17.70%, and a net profit attributable to shareholders of 1.687 billion yuan, up 75.51% [1]. - For Q2 2025, total revenue was 4.630 billion yuan, reflecting a year-on-year growth of 6.28%, with a net profit of 957 million yuan, an increase of 56.58% [1]. - The mid-year profit distribution plan includes a cash dividend of 1.70 yuan per 10 shares, totaling 680 million yuan, which accounts for 40.34% of the net profit [1]. Group 2: Industry Dynamics - The fiberglass industry has seen improvements in supply and demand, with leading companies optimizing production capacity and product structure, moving away from intense competition [1]. - Demand from key downstream applications, such as wind power and thermoplastics, has increased, leading to a notable rise in fiberglass product prices [1]. Group 3: Operational Strategies - The company is capitalizing on the structural growth opportunities in the wind power market and continuously optimizing its product mix [1]. - The marketing strategy focuses on "increment, stable price, recovery price, and price adjustment," effectively achieving simultaneous growth in volume and price for fiberglass yarn and electronic cloth [1]. - The company is advancing the construction of production bases to enhance quality, efficiency, and stable sales growth [1]. Group 4: Profitability and Competitive Advantage - The company's gross margin improved by 10.71 percentage points to 32.21%, benefiting from multiple rounds of price increases [2]. - The comprehensive expense ratio decreased by 1.29 percentage points, while the net profit margin increased by 6.54 percentage points to 19.30%, indicating a significant recovery in profitability [2]. - The company maintains a leading position in the fiberglass industry, with strong scale and cost advantages, and is focused on high-end product transformation [2]. Group 5: Future Outlook - Earnings per share (EPS) are projected to be 0.80 yuan, 0.91 yuan, and 1.06 yuan for 2025-2027, with corresponding price-to-earnings (PE) ratios of 18x, 16x, and 13x [3]. - The ongoing trend of price stabilization and recovery in the industry is expected to support the company's earnings resilience, maintaining a "buy" rating [3].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future investment returns [5]. Core Views - The company's performance in the first half of 2025 showed significant growth, with revenue, net profit attributable to shareholders, and net profit excluding non-recurring items increasing by 17.70%, 75.51%, and 170.74% year-on-year, respectively [1][2]. - The increase in demand for fiberglass products, particularly in the wind power sector, has driven sales growth, with the company achieving a sales volume of 1.5822 million tons of fiberglass yarn and 485 million meters of electronic cloth, representing year-on-year increases of 4.0% and 5.9% [2]. - The company's gross profit margin improved by 10.71 percentage points to 32.21%, while the operating cash flow surged by 534.54% year-on-year to 1.441 billion yuan [2]. Summary by Sections Financial Performance - In the first half of 2025, the company reported revenues of 9.109 billion yuan and a net profit of 1.687 billion yuan, with a quarterly revenue of 4.630 billion yuan in Q2 [1][5]. - The company announced a cash dividend of 1.70 yuan per 10 shares, totaling 681 million yuan, which accounts for 40% of the net profit attributable to shareholders for the first half of 2025 [1]. Market Position and Strategy - The company has successfully implemented a strategy of "increment, stabilize price, recover price, and adjust price," leading to a recovery in fiberglass prices from last year's lows [2]. - The overseas business has shown significant improvement, with the Egypt plant achieving a net profit of 195 million yuan, a year-on-year increase of 58.3% [3]. Future Outlook - The report anticipates continued growth in the fiberglass industry, with projected net profits for the company of 3.606 billion yuan, 4.043 billion yuan, and 4.446 billion yuan for the years 2025 to 2027, respectively [3].