CNBM (03323) rose more than 5% in Hong Kong trading. At the time of writing, the stock was up 4.63% to HK$5.20, with a turnover of HK$51.396 million. The company recently released its first-quarter report for 2026, showing operating revenue of RMB 35.767 billion, a decrease of 2.37% year-on-year. The net loss attributable to owners of the parent was RMB 177 million, narrowing by 65.67% compared to the same period last year. Morgan Stanley noted that the Q1 net loss of RMB 177 million, compared to a loss of RMB 517 million in Q1 2025, was in line with preliminary forecasts. The report indicated that the company attributed the improved performance to higher average selling prices for fiberglass and lower costs, coupled with increased sales of electronic fiber and battery separator materials. These factors helped offset the impact of declining cement prices and reduced profits in the engineering segment. Morgan Stanley expects these trends to continue into the second quarter, with the new materials business likely to see growth in both sales volume and average prices. However, the basic building materials segment continues to face challenges from weak demand and intensified price competition, leading to lower sales volume and declining gross profit per ton. This situation is expected to persist until specific supply-side policies are introduced and implemented.