【Huayuan Big Building Materials】Electronic Fabric Returns to Cost-Effective Range

English summary

Electronic fabric has undergone a deep correction. As of July 24 close, the glass fiber manufacturing (Shenwan) index has corrected 51% from its intra-year high (June 26). Core electronic fabric targets Honghe Technology, China Jushi, Sinoma Science & Technology, and International Composites have corrected 52%, 52%, 54%, and 52% from their intra-year highs respectively. We believe this decline is mainly a mistaken sell-off due to (sentiment: the leading sector of global AI inflation, memory, fell sharply) and (capital: early trading was highly crowded, profit-taking concentrated liquidation, public funds reduced positions for safety, quantitative convergence stops, and margin calls triggered a chain reaction, forming a stampede-style correction). Currently, electronic fabric remains the most certain sector for upward prosperity in the building materials sector. #Based on core companies' current planned capacity expansion and product prices, 【Honghe Technology】, 【China Jushi】, and 【Sinoma Science & Technology】 have returned to a cost-effective range and have allocation value; no need to be pessimistic. By sub-category, the supply-demand gap for high-end electronic fabric is most certain in T-fabric, followed by second-generation fabric and traditional electronic fabric. 1. ...