China Post Securities: Technology led the rebound in August, focusing on e-cloth rebound opportunities

The Zhitong Finance App learned that China Post Securities released a research report saying that the electronic distribution experienced an early correction in stock prices, and the current position is clearly cost-effective. In terms of fundamentals, the trend in the electronic cloth industry is still strong and improving. Demand in the industry continues to be strong, and the supply of high-end products is in short supply. Supply side product restructuring has reduced the supply of traditional electronic yarn, and the supply bottleneck for looms is expected to be difficult to be effectively mitigated within 1-2 years. Currently, traditional e-yarn inventories are at an all-time low, and the price increase in August is still accelerating. It is recommended to focus on recovery opportunities for stocks that have recently fallen more than recently.

The main views of China Post Securities are as follows:

cement

Overall demand performance for cement is lackluster. There is still a gap in shipment volume compared to the same period last year, and demand recovery is average. The price of cement in many regions has hit the cost line, and overall demand is still weak. In terms of infrastructure, demand has recently changed from steady to decline due to weather reasons such as rainfall. Furthermore, demand for housing construction continues to weaken, putting pressure on overall demand. Looking at the medium term, production capacity in the cement industry is expected to continue to decline under the policy of limiting overproduction, and a significant increase in capacity utilization will bring profit flexibility. Focus: Conch cement, Huaxin Construction, Shangfeng materials.

glass

Demand for terminals in the industry is still lackluster, terminal orders are slow, processing plant starts at a low level, and demand side continues to weaken, causing prices to continue to fall, supply-side cold repairs have begun to accelerate, and continuous attention is being paid to production cuts that may exceed expectations in the context of rising costs. Follow: Kibing Group.

fiberglass

The demand side of coarse sand has performed well. It is expected that short-term prices will continue to rise mainly due to structural support from immediate demand and rising costs. The performance of the electronic yarn segment is booming. The industry is driven by booming demand in the AI industry chain. Low-dielectric products in the industry have ushered in a sharp rise in volume and price. Currently, the first, second generation, and third generation (Q cloth) product structure upgrades are clear. Industry demand is expected to explode along with AI, and I am optimistic that industry demand will continue to rise sharply in volume and price. Focus: China Jushi, Sinoma Technology.

Consumer building materials

The industry's profits have now bottomed out, and after many years of price competition, there is no room for downside. This time, the industry is strongly demanding price increases and profit improvements. After 25 years of continuous issuance of price increase letters in various categories such as waterproofing, paint, and gypsum board, industry profits are expected to bottom out, and profits from leading companies can be expected to improve in 26 years. Attention: Dongfang Yuhong, Keshun Co., Ltd., Sankeshu, Beixin Building Materials, Baby Rabbit.

Last week's market review

The rise and fall of major indices in the past week (08.03—08.09): Shenwan Building Materials Industry Index (+9.13%), Shanghai Composite Index (+2.81%), Shenzhen Stock Exchange Index (+5.39%), GEM Index (+6.55%), Shanghai and Shenzhen 300 (+2.32%). In Shenwan's 31-tier sub-industry index, construction materials ranked 4th in terms of rise and fall rate.

Risk warning:

The implementation of anti-domestic policies fell short of expectations, and there is a downside risk that demand for real estate and infrastructure exceeds expectations.