Hong Kong stock concept tracking: Cement demand expected to improve marginally in the second half of the year. Institutional investors are optimistic that the industry is already at a cyclical profit bottom. (Attached Concept Stocks)

Since April, the cement industry has started to increase prices. The average price of cement in Q2 has increased by 6 yuan/ton to reach 365 yuan/ton, and the net profit margin in Q2 has turned positive from negative, with the industry maintaining a relatively optimistic outlook on future cement prices. Tianfeng's research report states that the policies on both supply and demand ends of the real estate industry are being introduced intensively, which may have a positive impact on improving the basic fundamentals of the construction materials in the real estate chain. The price increases of cement, glass fibers, and other varieties may reflect that the bottom has been reached. The current point in time may still be the temporary low point of the traditional construction materials' basic fundamentals. CITIC SEC's research report points out that the cement industry has already reached the cyclical profit bottom, and with the clearance of medium and small capacities, the improvement in supply structure is expected to boost profitability. The glass industry has a large proportion of aging production lines, with potential for significant production cuts, which may improve the supply side; glass fiber prices are expected to rebound after hitting the bottom. Zhongxin Research believes that the expectations for real estate demand have improved, the profitability quality and stability of leading companies have increased, and they are actively increasing dividends or buybacks to enhance investor returns. Moreover, the current valuation is at historically low levels, with potential for a rebound in the future. Zhongjin's report looks ahead to the second half of the year, where cement demand is expected to marginally improve, with the leaders of the peak season potentially continuing to lead the price increases, lifting the industry's profit center. Building materials and cement-related companies: 1) Cement businesses have a strong profit base, dividend-paying capability, and high dividend yields: Anhui Conch Cement (00914), CR BLDG MAT TEC (01313). 2) Driving the second growth curve of non-cement businesses and overseas cement businesses: WESTCHINACEMENT (02233), Huaxin Cement (06655). 3) Regional demand catalysts: Tibet Tianlu (600326.SH).