At the 2025 Analyst Conference held on November 28, Fan Chao, building materials analyst at Changjiang Securities Company Limited, delivered an award acceptance speech highlighting cyclical opportunities in the sector. He noted that while market expectations and positioning for construction materials have hit a "freezing point," some companies are already demonstrating independent growth trajectories.
Fan emphasized that market focus on the demand-side property downturn has overshadowed significant supply-side transformations. Industry consolidation, improved competitive landscapes, and evolving business models among leading firms are quietly reshaping the sector. "At this juncture, these battle-tested 'veteran enterprises,' especially quality players, deserve renewed attention," Fan stated, pointing to enhanced operating environments and pricing power resulting from supply-side optimization.
Beyond domestic restructuring, Fan identified two transformative trends: 1) The overseas expansion wave: China's manufacturing management capabilities maintain clear advantages in multiple sectors. "Africa represents a massive market, with South America offering additional potential—the overseas opportunity space is enormous," Fan revealed, noting that pioneering firms have achieved strong overseas performance while market valuations remain "significantly undervalued," creating potential for re-rating.
2) The stock renewal market: Addressing concerns about shrinking new home markets, Fan presented an alternative perspective—China's urban existing housing stock of 30-40 billion square meters, with a 30-year renovation cycle, would naturally generate over 1 billion square meters of annual renewal demand. "Current annual new construction starts stand at about 500 million square meters," he analyzed, suggesting this massive replacement demand could substantially offset the new construction decline, indicating the property market adjustment may be "nearing its bottom."
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