Recently, the relaxation of real estate policies continues to increase, indicating that the beta factor that is crucial to the performance of the building materials industry has turned.

According to the research report released by Zhongzheng Securities, the pressure that the decline of new real estate construction on enterprises has been gradually reduced, and if we take into account the pressure that the decline of new real estate construction for several years will bring to the completion end, the demand pressure of completion end varieties may be greater than that of commencement end varieties in the future.

Through comprehensive demand deduction and leader transformation response, 24H2 new commencement end enterprises are expected to outperform completion end enterprises in terms of fundamental.

Overall, through the intersection of high-quality layout and resilient demand, and considering the gradual reduction of demand pressure on the commencement end enterprises, the industry rankings of 24H2 in terms of fundamental certainty are: fiberglass > cement and industry chain > gypsum board > home decoration paint > home decoration plastic pipe > home decoration sheet material > waterproofing > water reducer > building hardware > ceramic tile > float glass.

According to the research reports of China International Capital Corporation, as an industry highly sensitive to positive policies, the building materials industry still needs demand to lead the overall turnaround. The industry demand is expected to moderately recover in the second half of the year, but substantial improvement still takes time. Positive changes in the supply side will become the main theme of the industry fundamentals in the second half of the year. Cement and fiberglass, as the leaders in the trough period, will lead the price recovery. The leading companies of the segmentation rely on high market share and stable prices, which all provide strong support for the fundamentals.

Guotai Junan stated that the consumer building materials sector has experienced a key period in shaping the pattern from 2010-2023, and the long-term advantages of the industry leader are obvious. There is commonality in the new strategic direction: continuing to transform towards consumption and small B, optimizing the balance sheet by dealing with the stock project mortgage assets; expanding the category layout by using existing channel and supply chain synergy advantages; and increasing shareholder returns and dividends proportion and frequency.

The net asset valuation anchor and dividend yield anchor of the sector leader show valuation advantages, and maintain a long-term layout thinking.

Waiting for the actual demand for real estate to usher in a turning point from the downward cycle to the repair cycle, the operating performance of the industry leader is expected to begin to release more obvious resilience.

Building materials sector related companies: Conch Cement(00914), CNBM(03323), Westchinacement(02233), Dongwu Cement(00695), etc.

Conch Cement (00914), CNBM (03323), Westchinacement (02233), Dongwu Cement (00695), and others.