Hualong Securities: Building Materials Industry's “Anti-Domestication” Breaks the Game, High-End Traditional Circuit Opens Up Room for Growth

The Zhitong Finance App learned that Hualong Securities released a research report stating that it maintains a “recommended” rating for the building materials industry. It is recommended to focus on two main lines: “anti-internal volume”: “anti-internal volume” policies continue to be introduced, the problem of overcapacity in the building materials industry is expected to be alleviated, and focus on the reduction of production capacity in the traditional building materials industry driven by “anti-internal volume”. High-end: Increased profitability of the industry driven by increased demand for high-end glass fiber products.

The main views of Hualong Securities are as follows:

review

Fundamentals: In the first three quarters of 2025, demand for major building materials products improved slightly. At the same time, the “anti-internal volume” policy led to an improvement in the supply side, and the profitability of various subsectors improved in the first three quarters of 2025. Market performance: From January 2 to December 23, 2025, the Shenwan Building Materials Index rose 20.8%, ranking 11th in the entire Shenwan industry. The Shanghai and Shenzhen 300 Index rose 17.43% during the same period. Among them, the glass fiber industry performed well, with an increase of 90.37% during the period.

cement

Looking ahead to 2026, the continued introduction of supply-side “anti-domestic roll” policies is expected to mitigate overcapacity in the industry. In the medium to long term, supply-side reforms in the cement industry are intensifying, and the supply and demand pattern of the industry is expected to improve, which is expected to drive an increase in the profitability of the industry. Focus on leading companies with high profitability: Conch Cement (600585.SH), Shangfeng Cement (000672.SZ), and Huaxin Cement (600801.SH).

float glass

Looking ahead to 2026, the demand side has yet to see significant improvement expectations. The supply side is concerned about the decline in production capacity brought about by the “anti-internal volume” policy. In the medium to long term, the glass industry is currently bottoming out with high inventories and low prices. Positive changes on the supply side are expected to bring about an improvement in the supply and demand pattern. It is recommended to focus on Kibing Group (601636.SH).

photovoltaic glass

Currently, the industry is still in a state of overcapacity. With the further implementation of the “anti-internal volume”, the industry's supply and demand pattern is expected to improve, and leading companies with cost advantages are expected to take the lead in benefiting. It is recommended to focus on Follett (601865.SH).

Consumer building materials

As housing age increases, the share of old housing is expected to continue to rise, and demand for improved housing stock is expected to be released, which is expected to drive an increase in demand for related consumer building materials. It is recommended to focus on the following targets: Three Trees (603737.SH), Beixing Construction Materials (000786.SZ), Dongfang Yuhong (002271.SZ), Weixing New Materials (002372.SZ), and Jianlang Hardware (002791.SZ).

fiberglass

Continued promotion of the “anti-domestic roll” policy is expected to avoid repeated construction and rapid expansion of glass fiber production capacity and curb the trend of vicious competition at low prices. In addition, demand for high-end glass fiber products such as wind power yarn, thermoplastic short cut yarn, and electronic yarn continues to rise, driving the profitability of the industry. Companies with a high share of sales of high-end products are expected to benefit first. Individual stocks focus on China Jushi (600176.SH), Sinoma Technology (002080.SZ), and Honghe Technology (603256.SH).

Risk warning: There have been adverse changes in the macro environment; the quoted data sources have published erroneous data; the construction progress of infrastructure projects falls short of expectations; market demand falls short of expectations; focus on the company's performance falling short of expectations.