Glonghui, April 17, 丨 Morgan Stanley published a report saying that China Building Materials (3323.HK) issued a profit warning in the first quarter of this year. The net loss was expected to reach 550 million yuan, lower than expected. The affected gross profit per ton of cement and clinker contracted significantly; and the profit contribution of the new materials sector was weak, especially glass fiber, etc. The bank said it has noticed a relative lag in the recovery rate of shipments and profit margins in some regions where the company operates, such as Central China, Southwest China and Northeast China. According to the bank, considering the overall price increase after the Spring Festival and the recent decline in the spot price of thermal coal, the report predicts that unit gross profit will gradually improve; in addition to the bank's index, considering better industry coordination and a moderate recovery in demand, the industry's profit margin is expected to gradually recover throughout the year. The target price of Daimoyu China Building Materials is HK$8.5, maintaining its rating of “increase in holdings”.