Zhongjin: Consumer building materials prices are expected to moderately recover, and the profitability of the glass industry is under pressure.

Zhongjin released a research report stating that the prices in the consumer building materials industry are expected to gradually recover, and the gross profit margin of some leading sectors may improve marginally. Recently, leading enterprises have successively issued price increase notices in various sub-sectors such as waterproofing, gypsum boards, and municipal channels. The basis for price increases includes supply optimization. For upstream raw materials, which are mainly chemical products, the prices have been moving upwards since the beginning of the year, including PVC and emulsions. The bank is optimistic about the trend of industry price recovery, leading to marginal profit improvement for the leading companies. It is suggested to pay attention to Beijing Oriental Yuhong Waterproof Technology (002271.SZ), SKSHU Paint (603737.SH), Beijing New Building Materials Public (000786.SZ), CHINA LESSO (02128), and Zhejiang Weixing New Building Materials (002372.SZ). Regarding fiberglass, the bank points out that AI is encroaching on traditional electronic fabric supply, showing strong price elasticity since the beginning of the year. Due to the rapid growth in AI demand, some electronic fabric manufacturers have switched production capacity to low dielectric products. The switching of weaving machine equipment and the long equipment ordering cycle have driven up the prices of ordinary electronic fabrics. As of February 4, the mainstream price of some 7628 electronic fabrics has 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 Co., Ltd (600176.SH) and Sinoma Science & Technology (002080.SZ). In terms of glass, the industry's profits are under pressure, awaiting acceleration in the cold repair process. According to Sublime China Information, as of January 29, the average price of float glass including tax was 1,145 yuan/ton, and the gross profit per ton for pipeline gas/coal gas production/petroleum coke was -120 yuan/-33 yuan/-58 yuan respectively, putting continued pressure on profits and promoting companies to accelerate cold repairs. It is suggested to pay attention to XINYI GLASS (00868) and Zhuzhou Kibing Group (601636.SH). As for cement, profits during the offseason are weak, and the anti-cyclical measures continue to be promoted. Currently, the gross profit per ton of cement nationwide is basically the same as in the third quarter of last year, at historically low levels, with limited room for further decline. The bank is optimistic about the marginal improvement in the utilization rates of cement industry capacity under the continued promotion of anti-cyclical policies. It is recommended to pay attention to Anhui Conch Cement (00914) and Gansu Shangfeng Cement (000672.SZ).