A research report from CICC indicates that prices in the consumer building materials sector are expected to see a moderate recovery, with leading companies in some segments potentially achieving marginal improvements in gross profit margins. Recently, leading companies have successively issued price increase notices in sub-sectors such as waterproofing, gypsum board, and municipal channels. The basis for these price hikes is judged to include supply optimization. Furthermore, upstream raw materials, mostly chemical products, have seen their price centers shift upwards since the beginning of the year, including items like PVC and emulsion. The institution is optimistic about the marginal profit recovery for leading companies under this industry-wide repricing trend. It recommends focusing on Beijing Oriental Yuhong Waterproof Technology Co.,Ltd. (002271.SZ), Skshu Paint Co.,Ltd. (603737.SH), Beijing New Building Materials Public Limited Company (000786.SZ), CHINA LESSO (02128), and Zhejiang Weixing New Building Materials Co.,Ltd. (002372.SZ).
Regarding fiberglass, the report points out that AI demand is crowding out the supply of traditional electronic cloth, demonstrating strong price elasticity since the start of the year. Due to the rapid growth in AI-related demand, some electronic cloth manufacturers are switching production capacity to low-dielectric products. The retooling of looms for this switch, combined with long equipment lead times, is driving price increases for standard electronic cloth. As of February 4th, the mainstream quoted price for 7628 electronic cloth from some enterprises had risen by 0.7 yuan per meter compared to the end of last year, reaching 5.1-5.3 yuan per meter (including tax). It is recommended to monitor China Jushi Co.,Ltd. (600176.SH) and Sinoma Science&Technology Co.,Ltd. (002080.SZ).
In the glass sector, industry profits are under pressure, and the market awaits an acceleration in the cold repair process. According to SCI data, as of January 29th, the average price of float glass including tax was 1,145 yuan per ton. The gross profit per ton for glass produced using pipeline gas, coal gas, or petroleum coke was -120 yuan, -33 yuan, and -58 yuan per ton, respectively. Sustained profit pressure may encourage companies to accelerate cold repairs. It is advised to watch XINYI GLASS (00868) and Zhuzhou Kibing Group Co.,Ltd. (601636.SH).
For the cement industry, profits are typically weaker during the off-season, while efforts to curb internal competition continue. Current national cement gross profit per ton is roughly on par with the third quarter of last year, remaining at historically low levels, with limited room for further decline. The report is positive about the potential for marginal improvement in capacity utilization within the cement sector, supported by the ongoing implementation of policies aimed at reducing excessive internal competition. Recommendations include monitoring CONCH CEMENT (00914) and Gansu Shangfeng Cement Co.,Ltd. (000672.SZ).
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