According to a research report released by Guolian Minsheng Securities, cement demand in developing countries is experiencing steady growth, and the competitive landscape is more favorable, with profit per ton significantly higher than in the domestic market. Cement companies actively expanding into overseas markets are likely to demonstrate superior performance. The firm anticipates that fiberglass companies will sustain a high-speed growth trend in both revenue and profit for the full year 2025 and the fourth quarter of 2025. Key themes to watch include anti-involution in materials, AI applications, overseas expansion, and corporate transformation. For traditional building materials: 1) Supply-side policies, such as crackdowns on overproduction, are expected to support a continuous rise in the profit center, with dividends providing a safety margin. 2) AI development is profoundly impacting the fiberglass industry. 3) The overseas expansion of materials. 4) It is also advisable to monitor leading decorative building materials companies that are actively developing new businesses and sales channels. 5) Corporate transformation. The main views of Guolian Minsheng Securities are as follows:
The cement sector is expected to face domestic pressure in Q4, while overseas performance may be stronger; non-operating items could have some impact on profits. Overall, cement prices and profitability are projected to continue bottoming out in 2025. Specifically, cement prices are expected to see a seasonal slight rebound in Q4 2025, but with profitability remaining largely flat quarter-on-quarter due to a temporary rebound in coal prices. As the price increases implemented in most regions during Q4 2024 were relatively effective, cement prices and profitability in Q4 2025 face some year-on-year pressure. The firm anticipates that domestic business volume and pricing for cement companies will be under pressure in 2025, with performance in Q4 2025 likely facing even greater year-on-year pressure. Concurrently, the pace of capacity replenishment by cement companies is expected to accelerate in Q4 2025, and some firms may dispose of inefficient assets or invest in equity projects; non-recurring items such as asset disposals, asset impairments, and investment gains could also impact current period profits. Cement demand in developing countries is showing steady growth with a superior competitive landscape and significantly higher profit per ton than domestically, suggesting that companies actively expanding overseas may see better performance.
The glass industry's fundamentals are bottoming out, with revenue and profit expected to remain under pressure in Q4. For float glass, due to weak downstream demand, the industry's conditions are projected to continue bottoming in 2025, with inventory levels remaining high compared to the past decade. The sector continues to operate at a loss, leading some small and medium-sized enterprises to halt kilns or reduce production, resulting in a slight decrease in active capacity. The firm expects profitability from float glass operations to remain under pressure. For photovoltaic (PV) glass, the firm forecasts a decrease in volume but an increase in price for companies in Q4 2025, likely putting significant pressure on both revenue and profit: 1) Volume: The rush to install PV capacity in the first half of 2025 has somewhat透支 demand for the second half, leading to expectations of substantial year-on-year pressure on sales volumes for PV glass manufacturers. 2) Price: "Anti-involution" measures helped push prices higher in Q3 2025; although prices retreated somewhat in Q4, the average price still increased both year-on-year and quarter-on-quarter. Additionally, attention should be paid to the impact of year-end provisions for receivables impairment on corporate profits.
Fiberglass is expected to see continued high growth in revenue and profit, driven by growth in roving demand and simultaneous increases in volume and price for high-end fabric. The firm anticipates that fiberglass companies will sustain a high-speed growth trend in revenue and profit for both the full year 2025 and Q4 2025: 1) Benefiting from robust demand in wind power and thermoplastics, domestic demand for fiberglass grew steadily in 2025. Domestic net demand reached 5.48 million tons from January to November 2025, a year-on-year increase of 19%; demand in October-November specifically was 1.09 million tons, up 24% year-on-year, continuing the growth trend. The firm expects the sales volume of fiberglass roving to maintain its rapid growth momentum. 2) Benefiting from rapid growth in areas like AI computing power, high-end electronic fabric is in short supply, exhibiting a trend of rising both in price and volume. Companies with significant first-mover advantages are poised to benefit first, which is also driving price improvements for conventional electronic fabric. The price of 7628 electronic fabric averaged 4.1 yuan/meter in 2025, up 9% year-on-year; specifically, the Q4 price was 4.2 yuan/meter, up 9% year-on-year and 6% quarter-on-quarter.
The decorative building materials sector continues to experience bottoming fundamentals, with most companies expected to face pressure on revenue and profit in 2025. From January to November 2025, national figures for housing starts, completions, and sales area decreased by 21%, 18%, and 8% year-on-year respectively. The rate of decline widened by 2, 3, and 2 percentage points compared to the figures from January to September 2025. With the weakening of real estate starts, completions, and sales in 2025, overall demand for decorative building materials remains under pressure, and competition across various sub-sectors has intensified. Driven by "anti-involution" policies, several waterproofing companies issued price increase notices in July 2025, but the actual implementation has been unsatisfactory. The firm expects that the majority of decorative building materials companies will face declining pressure on both revenue and profit in 2025. However, some companies (such as San-shu Paint and Tu-bao-bao) are actively expanding into new businesses and channels, and their earnings growth may demonstrate relatively strong resilience.
Risk warnings include: slower-than-expected implementation of real estate financing policies; weaker-than-expected improvement in real estate demand sentiment; progress in infrastructure project implementation falling short of expectations; and significant fluctuations in raw material prices.