China Post Securities: The cost-effectiveness of consumer building materials is highlighted, focusing on low-end varieties of domestic demand.

China Post Securities released a research report stating that the recent market volatility has intensified, and the market style is expected to "cut high and low", switching from technology to undervalued and changing domestic demand types. The traditional consumer building materials industry has experienced several years of downturn and is gradually stabilizing from 2025 to 2026. The logic of increasing market share and product expansion continues to be verified, and it is expected to achieve double profit and valuation in 2026. Focus on industry leaders. The main points of China Post Securities are as follows: Cement Overall cement demand performance is flat, with outbound volume still lagging behind the same period last year, and demand recovery is moderate. Infrastructure demand has been stable in the past, but recently, due to weather factors such as rain, demand has turned from stable to falling. In addition, residential construction demand remains weak, putting overall demand under pressure. In the medium term, cement industry capacity is expected to continue to decline under the policy of restricting overcapacity, leading to a significant increase in profitability due to the substantial increase in capacity utilization. Focus on: Anhui Conch Cement, Huaxin Building Materials Group, Gansu Shangfeng Cement. Glass Recently, there have been more shutdowns for maintenance and repairs, but end demand remains flat, with delayed orders, low operating rates at processing plants, and weak short-term downstream demand compounded by the release of speculative supply in the previous period, leading to weak price performance. Under the backdrop of rising costs, attention should be paid to the possibility of unexpected production cuts. Focus on: Zhuzhou Kibing Group. Fiberglass Coarse sand demand performance is still good, supported by structural rigid demand and cost increases. It is expected that short-term prices will continue to rise. The electronic yarn segment is thriving, driven by the booming AI industry chain demand. The industry's low dielectric products have seen a simultaneous increase in quantity and price. At present, the upgrades of the first, second, and third generation (Q-type) products are clear, and industry demand is expected to show explosive growth along with AI, showing a good trend of continuous increase in demand. Focus on: China Jushi Co., Ltd, Sinoma Science & Technology. Consumer Building Materials The industry's profitability has bottomed out, and prices have experienced years of competition with no downward space. This time, with the help of the anti-"involution" policy, the industry has a strong demand for price increases and profitability improvement. In 2025, various categories such as waterproofing, coatings, and gypsum board have continued to release price increase notices, and the industry's profitability is expected to bottom out, with expectations of profit improvement for industry leaders in 2026. Focus on: Beijing Oriental Yuhong Waterproof Technology, Keshun Waterproof Technologies, SKSHU Paint, Beijing New Building Materials Public, Dehua TB New Decoration Material. Last week's market review The performance of major indices in the past week (06.0806.14) is as follows: SSE Building Materials Industry Index (+0.81%), Shanghai Composite Index (+0.09%), Shenzhen Component Index (-2.29%), Growth Enterprise Market Index (-3.22%), CSI 300 Index (-0.82%). Among the 31 primary sub-industry indices of the Shanghai Securities Index, the building materials sector ranks fifth in terms of price changes. Risk warning: The implementation of the anti-"involution" policy falls short of expectations, with risks of real estate and infrastructure demand exceeding expectations.