Guosheng Securities: Completion-Stage Building Materials Poised for a Long-Cycle Turning Point

Guosheng Securities released a building materials sector research report on February 8, highlighting that completion-stage building materials could be approaching a long-cycle turning point in 2026.

From the demand side, the report argues that several forces are converging to support a shift in the cycle. These include a natural narrowing in the decline of new-home completions, continued resilience in secondary-home transaction activity, and a peak period for renovation demand in the existing housing stock. At the same time, macroeconomic pressure has already been fully reflected in the current demand structure, which the report expects may gradually ease going forward.

On the supply side, capacity has been contracting steadily over the past three years, helping the competitive landscape improve. Against this backdrop, the report anticipates two key changes across the industry: first, the pace of revenue declines among listed companies is likely to slow, with a growing number of companies returning to growth; second, as demand stabilizes and “anti-involution” efforts gain traction, price competition may cool—allowing profit growth to meaningfully outpace revenue growth.

Looking across sub-sectors, the glass industry stands out for its clear supply contraction, with supply and demand gradually moving closer to balance. Consumer-oriented building materials are also expected to recover step by step as demand shifts further toward secondary-home transactions and renovations of existing properties. While profitability in start-of-construction building materials has shown some improvement, the report notes that a sustained uptrend will still require additional policy support.

In cement, measures such as capacity exits and staggered production have helped keep prices relatively firm, contributing to better profitability for producers.

Turning to new materials, the report points to continued momentum in electronic fiberglass yarn, supported by both traditional supply-demand adjustments and rising AI-related demand. Carbon fiber is expected to benefit from offshore wind expansion and emerging aerospace-related applications. Meanwhile, TCO glass—viewed as a key material for perovskite technology—could offer significant upside as commercialization accelerates.