<Research>HSBC Research Names CONCH CEMENT/ CR BLDG MAT TEC/ CNBM as Top Picks in Cement Sector; Building Materials Benefit from Recent Policy Support

The analyst rating from Goldman Sachs is influenced by several key factors regarding the outlook for Chinese commodities. The report indicates that China's commodity demand is expected to stabilize this year, with growth rates projected to range from -1.3% to 2%, gradually recovering in the second half of 2025. The stability in supply-demand fundamentals and a favorable macro environment are also noted. However, the future direction of prices and profit margins will largely depend on marginal changes in the supply outlook, which will be shaped by three main themes: supply discipline and response, anti-involution, and mergers & acquisitions (M&A) along with asset injections. For specific commodities, Goldman Sachs expresses a more optimistic outlook on cement and coal, while adopting a cautious stance on steel and aluminum. Their views on copper and gold remain positive, but they are cautious regarding lithium and paper packaging. This nuanced perspective on individual commodities informs the investment ratings, with some stocks being upgraded or downgraded based on these assessments.