Tianfeng: Infrastructure investment continued to exert force in March, with funds and orders validating the uptrend in economic activity.

Tianfeng released a research report stating that the trading atmosphere in the construction and decoration market from January to March 25th gradually improved. In terms of prices, as of April 10th, the price of 5mm float glass was 66 yuan per box, an increase of 1 yuan per box compared to the end of March. In terms of profits, as of last week, the profits of glass companies using pipeline gas fuel/coal fuel/petroleum coke fuel were -1.7/+7.8/-2.2 yuan per box. Looking ahead, seasonal demand is expected to further improve, but based on current discussions with processing factories, there may not be a significant increase in future orders. On the supply side, production line ignitions and cold repairs are still present, with no significant changes in production capacity expected. Attention is focused on the situation of cold repair production lines outside of the planned repairs. Tianfeng's main points are as follows: Infrastructure investment continues to grow, focusing on cyclical trends and overseas opportunities From January to March 25th, real estate development investment/narrow definition of infrastructure/broad definition of infrastructure/manufacturing year-on-year growth rates were -9.9%/+5.8%/+11.5%/+9.1%, with the monthly growth rates in March being -10.3%/+5.9%/+12.6%/+9.2% (month-on-month growth rates of -0.8/+0.3/+2.6/+0.2pct). Infrastructure investment has continued to strengthen since 25, with municipal and water conservancy investments showing sustained high growth, with year-on-year growth rates of +26.0% and +36.8% in January-March. The growth in new construction orders for construction companies since 25 indicates a rebound in infrastructure investment. State Construction Engineering Corporation's infrastructure orders increased by 31% year-on-year in January-February, Sichuan Road & Bridge Group's Q1 infrastructure orders increased by 28% year-on-year, and China National Chemical Engineering's new orders increased by 61% year-on-year in March. In terms of funding, there was an increase of 960.2 billion in special bonds in the first quarter, an increase of 326.1 billion year-on-year, providing good support for infrastructure investment. The bank suggests focusing on the pace of converting physical infrastructure work and investment opportunities in regional high-growth provinces represented by Sichuan Road & Bridge Group. Additionally, the bank believes that the warming of infrastructure and real estate construction is expected to drive the cyclical market trends, combined with policy expectations of increased tariffs in the face of tariff impacts, focusing on leading steel structure and chemical engineering projects. In terms of overseas markets, they recommend focusing on the international engineering revitalization along the European and ASEAN Belt and Road route. The decline in real estate sales data has narrowed, and municipal and water conservancy investments are thriving Looking at real estate from a transmission perspective, from January to March, the year-on-year change in sales area was -3%, with a monthly change of -1.6% (month-on-month growth of +3.9pct); the year-on-year change in newly started construction area was -24.4%, with a monthly change of -18.7% (month-on-month growth of +11.1pct); the year-on-year change in construction area was -9.5%, with a monthly change of -33.3% (month-on-month growth of -24.2pct); the year-on-year change in completed construction area was -14.3%, with a monthly change of -11.7% (month-on-month growth of +4pct); among the specific segments of infrastructure, the year-on-year change in transportation, warehousing, and postal investment from January to March was +3.8%, with a monthly change of +4.7% (month-on-month growth of +2pct); among them, the year-on-year change in railway transportation investment was +0.5%, with a monthly change of +0.8% (month-on-month growth of +0.6pct); the year-on-year change in road transportation investment was -0.2%, with a monthly change of +2.3% (month-on-month growth of +5.5pct); the year-on-year change in water, electricity, and heating investment from January to March was +26%, with a monthly change of +26.4% (month-on-month growth of +1pct); the year-on-year change in water environment public facilities investment from January to March was +9.8%, with a monthly change of +10.7% (month-on-month growth of +2.2pct); among them, the year-on-year change in water conservancy investment was +36.8%, with a monthly change of +35.3% (month-on-month growth of -3.8pct); the year-on-year change in public facilities management investment was +4.9%, with a monthly change of +6.5% (month-on-month growth of +3.9pct). Cement demand is slowly recovering, with attention on the magnitude of marginal price increases From January to March 25th, cement production reached 331 million tons, a decrease of 1.4% year-on-year, a decrease of 4.3pct from January-February. In March alone, cement production was 158 million tons, up 2.5% year-on-year. In terms of demand, the average cement shipment rate from January to March was 31%, down 1% year-on-year. The weather was good after the Qingming Festival, leading to an improvement in demand compared to the previous period. As of April 11th, the cement shipment rate was 48%, up 2% from the end of March and up about 3% year-on-year. Currently, cement company inventories are at 60%, down 10% year-on-year and up 6% month-on-month. In terms of prices, in some areas where demand support is lacking, companies are experiencing sales pressures, and previous price increases have not been able to maintain stability, resulting in a price decline. As of April 13th, the national average cement price was 402 yuan per ton, basically stable compared to the end of March, with expectations of a certain price increase in early April. Several cement companies announced first-quarter profit forecasts last week, and the bank believes that with the effects of price increases in East and South China in March, profits in the second quarter are expected to further improve. In addition, with the expectation of strong domestic infrastructure construction, key project construction is expected to accelerate, and there may be expectations for a difference in cement demand. Risk warning: Marginal improvement in real estate policies below expectations; Infrastructure investment growth is lower than expected; Cement, glass, and other demands are lower than expected.