Guolian Minsheng Securities: It is expected that the fourth quarter of 25Q4 fiberglass revenue profits will increase, while traditional building materials performance will be under pressure.

Guolian Minsheng Securities released a research report stating that the demand for cement in developing countries is steadily increasing, and the competitive landscape is relatively favorable, with profits per ton significantly higher than domestically. Cement companies actively expanding into overseas markets may outperform. The firm predicts that glass fiber companies will continue to experience rapid revenue and profit growth trends in 2025 and 2025Q4. Focus on anti-monopoly in materials, AI applications, going global, and corporate transformation: Traditional building materials: 1) Excess production control policies are expected to support continued improvement in profit margins, with dividends providing a safety margin. 2) AI development has a profound impact on the glass fiber industry. 3) Going global in materials. 4) It is also recommended to focus on leading companies in decoration building materials that actively expand into new businesses and channels. 5) Corporate transformation. The main points of view of Guolian Minsheng Securities are as follows: Cement: Domestic pressure expected in Q4, better performance overseas, non-operating projects may have a certain impact on profits Overall, cement prices and profits in 2025 continue to stabilize. In particular, cement prices in 2025Q4 are expected to have a slight seasonal rebound, with profits largely staying flat due to the impact of the phase rebound in coal prices. As most regions successfully implemented cement price increases in 2024Q4, there will be certain pressure on cement prices and profits in 2025Q4 on a year-on-year basis. The firm expects domestic cement companies to face certain pressure on both volume and price in 2025, with more pressure on performance in 2025Q4. At the same time, the pace of capacity expansion for cement companies in 2025Q4 has accelerated, with some companies disposing of inefficient assets, investing in equity projects, and other non-recurring items having a certain impact on current profits. The demand for cement in developing countries is steadily increasing, and the competitive landscape is relatively favorable, with profits per ton significantly higher than domestically. Cement companies actively expanding into overseas markets may have better performance. Glass: Industry prosperity stabilizing, Q4 revenue and profit continue to be under pressure Float glass, affected by weak downstream demand, the prosperity of the float glass industry in 2025 continues to stabilize. Inventories are at relatively high levels in nearly a decade, and the industry continues to operate at a loss, with a slight decrease in production capacity for some small and medium-sized enterprises. The firm expects profits of enterprise float glass businesses to continue to be under pressure. Photovoltaic glass, the firm expects the volume and price of enterprise photovoltaic glass to be significantly under pressure in 2025Q4: 1) Volume, the over-installation of the photovoltaic industry in 2025H1 has somewhat overdrafted demand for the second half of the year, and it is expected that photovoltaic glass manufacturers will face significant pressure on sales volume. 2) Price, the "anti-monopoly" policy in 2025Q3 helped push prices up, and although prices have fallen in 2025Q4, both average prices and prices have risen compared to the previous year. Also, pay attention to the impact of the provision for impairment of accounts receivable at the end of the year on corporate profits. Glass fiber: Demand growth for coarse yarn & high-end cloth leads to price and profit growth The firm expects glass fiber companies to continue to experience a trend of rapid revenue and profit growth in 2025 and 2025Q4: 1) Benefiting from good demand for wind power and thermoplastics, domestic demand for glass fiber is steadily increasing in 2025, with a net demand of 5.48 million tons in January-November 2025, a yoy increase of 19%; among which October-November is 1.09 million tons, a yoy increase of 24%, continuing the growth trend. The firm expects sales of coarse yarn by glass fiber companies to continue to grow rapidly. 2) Benefiting from rapid growth in AI computing power, high-end electronic cloth is in short supply, with both price and volume rising. Companies with clear advantages are expected to benefit first, driving improvement in prices for conventional electronic cloth. The price of 7628 electronic cloth in 2025 is 4.1 yuan/meter, a yoy increase of 9%; the price in Q4 is 4.2 yuan/meter, a yoy increase of 9% and a qoq increase of 6%. Decoration building materials: Industry prosperity continues to stabilize, most companies expected to face pressure on revenue and profit in 2025 January-November 2025, national housing construction, completion, and sales areas yoy-21%, -18%, -8%, respectively, with the decline compared to January-September 2025 expanding by 2, 3, 2 percentage points. Weakness in real estate construction, completion, and sales in 2025, leading to continued pressure on demand for decoration building materials as competition in various sub-sectors intensifies. Under the policy drive of "anti-monopoly", multiple waterproof companies issued price increase letters in July 2025, but the implementation was not ideal. The firm expects that most decoration building materials companies will face downward pressure on revenue and profits in 2025. Some decoration building materials companies (such as SKSHU Paint, Dehua TB New Decoration Material, etc.) are actively expanding into new businesses and channels, and their performance growth is expected to show strong resilience. Risk warning: Real estate financing policies are not as expected; Improvements in real estate demand are weaker than expected; Progress in infrastructure implementation is lower than expected; Significant fluctuations in raw material prices.