According to a HSBC Research report, the stock prices of China's steel and cement companies have shown robust performance since July, which the broker attributed to the "anti-involution" measures and the commencement of the Yarlung Tsangpo river hydropower project.

Specifically, the "anti-involution" measures aim to address irrational competition and excess capacity. Although these measures rely on industry associations' self-regulation and guidance from the Ministry of Industry and Information Technology, they have triggered a sharp revaluation of steel and cement stocks, potentially leading to a healthier market structure.

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While specific and mandatory supply control measures have not yet been introduced, HSBC Research expected that the policy momentum should accelerate the introduction of more robust measures.

For the cement industry, the broker anticipated substantial progress in reforms, which would benefit leading companies. Its top picks were CONCH CEMENT (00914.HK)  -0.050 (-0.220%)    Short selling $41.22M; Ratio 31.470%   , CR BLDG MAT TEC (01313.HK)  -0.020 (-1.042%)    Short selling $2.11M; Ratio 7.224%   , and CNBM (03323.HK)  -0.020 (-0.427%)    Short selling $19.30M; Ratio 24.335%   . Additionally, it favored MAANSHAN IRON (00323.HK)  +0.020 (+0.917%)    Short selling $6.97M; Ratio 12.704%   (600808.SH)  -0.040 (-1.153%)   over ANGANG STEEL (00347.HK)  -0.040 (-1.778%)    Short selling $4.84M; Ratio 13.581%   (000898.SZ)  -0.050 (-1.825%)   due to the former's stronger profitability.
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