In "Major Banks," China International Capital Corporation: Consumer building material prices are expected to recover moderately, while the glass industry profits are under pressure

CICC published a report indicating that the prices in the consumer building materials industry are expected to recover moderately, with some leading companies in certain segments likely to see marginal improvements in profit margins. Recently, leading enterprises have successively issued price increase notices in sub-sectors such as waterproofing, gypsum boards, and municipal pipelines. The basis for the price increases includes supply optimization; upstream raw materials are mostly chemical products, and since the beginning of the year, the price center has shifted upward, including PVC and emulsions. The firm is optimistic about the trend of price recovery in the industry, which will lead to marginal profit recovery for leading companies. It is recommended to pay attention to Oriental Yuhong (002271.SZ), SKSHU (603737.SH), Beijing New Building Materials (000786.SZ), China Liansu (02128.HK), and Weixing New Materials (002372.SZ).

In terms of fiberglass, the firm noted that AI is encroaching on traditional electronic fabric supply, demonstrating strong price elasticity since the beginning of the year. Due to the rapid growth in AI demand, some electronic fabric manufacturers are switching production capacity to low dielectric products. The switch of weaving machine equipment and the long ordering cycle for equipment have driven up the prices of ordinary electronic fabrics. As of February 4, some companies' mainstream quotes for 7628 electronic fabrics have increased by 0.7 yuan/meter to 5.1-5.3 yuan/meter (including tax) compared to the end of last year. It is recommended to pay attention to China Jushi (600176.SH) and China National Materials (002080.SZ).

In the glass sector, industry profits are under pressure, awaiting an acceleration in the cold repair process. According to Zhuochuang Information, as of January 29, the average price of float glass including tax was 1,145 yuan/ton, with corresponding glass ton profits for pipeline gas/coal gas/oil coke at -120 yuan/-33 yuan/-58 yuan/ton, respectively. Continued profit pressure may promote companies to accelerate cold repairs. It is recommended to pay attention to Xinyi Glass (00868.HK)-H and Qibin Group (601636.SH).

In the cement sector, profits are weak in the off-season, and the "anti-involution" trend continues to advance. Currently, the national cement ton profit is roughly the same as in the third quarter of last year, at a historical low, with limited room for further decline. The firm is optimistic about the marginal improvement in cement industry capacity utilization under the continued promotion of anti-involution policies. It is recommended to pay attention to Conch Cement (00914.HK) and Shangfeng Cement (000672.SZ)