Summary of Oriental Yuhong's NDR Call and 3Q25 Results Company Overview - **Company**: Oriental Yuhong (002271.SZ) - **Industry**: Construction Chemicals, specifically waterproofing materials Key Points from the Call 1. 3Q25 Performance Highlights - **Topline Growth**: - 3Q25 saw a positive growth of +9% year-over-year (yoy) for the first time since 3Q23, improving from a decline of high-teens% in 1Q25 and narrowing to -SD% in 2Q25 [3][5] - Project distributor sales reached Rmb3.4 billion, up +3% yoy, attributed to market share expansion and demand from mega infrastructure projects [5] - Retail sales increased to Rmb2.3 billion, up +6% yoy, supported by channel and product expansion [5] - Direct sales surged to Rmb1.1 billion in 3Q25 from Rmb341 million in 3Q24, driven by overseas and specialty domestic business growth [5][6] 2. Product Performance - **Waterproof Membrane Sales**: Grew +5% yoy, with volume growth of +12% offset by soft average selling price (ASP) [9] - **Waterproof Coatings**: Achieved +15% yoy growth, primarily driven by ASP increases [9] - **Special Mortar Business**: Recorded Rmb3.3 billion in sales revenue and 8 million tons in sales volume for 9M25, exceeding last year's full-year level [9] 3. Profitability and Impairment - **Gross Profit Margin (GPM)**: Declined by -4.1 percentage points yoy in 3Q25 due to ASP pressure, incentive rebates, and unfavorable product mix [9] - **Impairment**: High impairment in 3Q25 was due to increased discounts on property collateral disposals, with an expected impairment ratio of 40% by year-end [9][10] 4. Cash Flow and Capital Allocation - **Operating Cash Flow**: Turned positive for the first time in ten years for 9M25, with accounts receivable declining -19% yoy by end-3Q25 [12] - **Capital Expenditure (Capex)**: Focused on overseas factories and selective acquisitions, with limited domestic capex primarily for upstream mine acquisitions [12] 5. Industry Outlook - **2026E Expectations**: Management is optimistic about industry demand bottoming out, with expectations for project sales to stabilize and continued market share expansion [12][13] - **Overseas Business Growth**: Anticipates organic overseas sales to double yoy in 2026E, with contributions from newly acquired companies in Chile and Hong Kong [12][13] 6. Risks - **Key Risks Identified**: - Weaker-than-expected construction activities - Unexpected increases in raw material prices - Impairment losses related to receivables from risky developers [15][17] 7. Investment Thesis - **Market Position**: Oriental Yuhong is the largest producer of waterproofing materials in China, with strong leadership and competitive advantages in a fragmented market [16] - **Long-term Potential**: As the property market stabilizes, Yuhong is positioned to become a one-stop solution provider for construction chemicals [17] 8. Financial Projections - **Price Target**: Rmb15.50, with an upside of 18.5% from the current price of Rmb13.08 [18] - **Market Cap**: Rmb29.7 billion / $4.2 billion [18] This summary encapsulates the critical insights from Oriental Yuhong's recent NDR call and 3Q25 results, highlighting the company's performance, outlook, and strategic direction in the construction chemicals industry.

Summary of Beijing New Building Materials (BNBM) Conference Call Company Overview - **Company**: Beijing New Building Materials (000786.SZ) - **Industry**: Building materials, specifically gypsum boards, waterproofing, and coatings Key Takeaways 1. **Pricing Trends**: - Improvement in Average Selling Price (ASP) across all major products observed in August [1] - Sequential price improvement noted in 3Q25 due to two rounds of ASP hikes in March and August [5] 2. **Market Position**: - BNBM maintained a leading market position with approximately 68% market share in gypsum boards, focusing on premium products and gaining market share in commodity products [5] - Ambitious market share targets set for waterproof and coating segments [1] 3. **Product Performance**: - New product sales volume in 1H25 surpassed the full-year level of 2024, indicating strong demand for high-end products [5] - Positive year-over-year growth in sales and net profit for waterproof membranes and coatings, driven by channel expansion and cost efficiencies [8] 4. **Capacity Expansion**: - Announced capacity expansion plans in Ningbo, targeting an annual production capacity of 80 million square meters for gypsum boards and 20,000 tons for metal framing [5] - Plans to expand high-end GF board capacity to 20 million square meters by the end of the year [6] 5. **Market Demand Outlook**: - Management expects market demand for gypsum boards to rise gradually to approximately 4 billion square meters by 2030, driven by renovation and reconstruction needs [6] - Anticipation of a duopoly market in the waterproof industry in China [8] 6. **Cost Management**: - Cost-saving initiatives led to a 4% year-over-year reduction in costs in 1H25, contributing to gross profit margin improvement for high-end products [5] 7. **Strategic Focus**: - Continued focus on market share expansion through differentiated high-end products and penetration into rural markets [5] - Plans for proactive market consolidation in commodity products through dynamic pricing strategies and acquisitions [5] 8. **Investment Thesis**: - BNBM is positioned to benefit from rising renovation demand, which may offset potential slowdowns in property completions in China [10] - New business expansions in waterproofing and coatings are expected to drive earnings growth [10] 9. **Risks**: - Key risks include weaker-than-expected property completions, unexpected increases in raw material prices (notably paper and energy), and execution challenges in acquisitions [12] 10. **Valuation**: - Target price set at RMB 32.00, representing a potential upside of 23.8% from the current price of RMB 25.84 [13] Additional Insights - Management highlighted the importance of entering the prefabricated decoration market, which has a significant market size potential [6] - The company aims to achieve a leading position in both architectural and industrial coatings, targeting a 10%+ market share in selected segments [8]