On August 23, 2023, Dongpeng Holdings, a leading company in the ceramic tile industry, disclosed its 2023 semi-annual report. The company’s performance in the first half of the year showed high growth, and its operating income hit the best level in the same period in history.
The company achieved operating income of 3.628 billion yuan, a year-on-year increase of 15.83%; net profit attributable to the parent company was 384 million yuan, a year-on-year increase of 224.86%.
In addition to Dongpeng Holdings, listed companies in the decorative materials track such as Dongfang Yuhong, Tianan New Materials, Senying Window Industry, and Beixin Building Materials also achieved high performance growth in the first half of the year.
Many industry insiders said that in the first half of this year, the decorative materials industry showed a gradual recovery trend, but still faced development challenges.
Most of the companies that achieve performance growth are industry leaders or companies with strong core competitiveness. “The era of decorative materials companies relying on ‘quantitative growth’ has ended, and ‘qualitative growth’ has become the new engine. After the big waves, the strong will remain strong.”
Strive for C-end retail
As a veteran enterprise of building materials and ceramic tiles, Dongpeng Holdings has the channel advantage of focusing on retail business.
Regarding the performance growth in the first half of the year, Dongpeng Holdings said: “The company has deeply cultivated its advantageous retail channels and continued to optimize its product structure. The sales proportion of medium and large-sized high-value products has increased to 29%, and the global marketing potential of new retail online has expanded.”
Oriental Yuhong, the leader in waterproof materials, also achieved excellent results in the first half of the year.
In the first half of the year, the company achieved operating income of 16.852 billion yuan, a year-on-year increase of 10.10%; net profit attributable to the parent company was 1.334 billion yuan, a year-on-year increase of 38.07%.
Oriental Yuhong said in its semi-annual report: “The company continues to adhere to the C-end priority strategy and expand C-end influence; at the same time, on the multi-category development path, it continues to cultivate wall auxiliary product lines such as reinforcing agents and putty powder, promote the development of glue products, incubate new categories such as hardware and pipe industries, and create a one-stop shopping platform for consumers to purchase construction and building materials.
Taiwan.”
Tianan New Material’s main products are polymer composite facing materials and architectural ceramics. The company’s 2023 semi-annual report shows that it achieved operating income of 1.365 billion yuan, a year-on-year increase of 10.40%; it achieved net profit attributable to the parent company of 37.167 million yuan, a year-on-year increase of 134.66%.
The relevant person in charge of Tianan New Materials Securities Department said: “The company’s orders for architectural ceramic products in the first half of the year increased compared with the same period last year, and at the same time, it actively carried out cost reduction and efficiency improvement. The company attaches great importance to C-end retail, and its subsidiary Eagle Brand Company has both brand and channel advantages. In the future, the company will further promote the pan-home industry strategy.”
Co –
Zhang Xinyuan, Secretary General of Found Think Tank, said: “With the advent of the era of personalized and customized consumption in the home decoration industry, channel transformation and layout of C-end retail will become the development trend of the decoration materials industry. Companies need to provide more comprehensive and integrated decoration solutions to meet consumers’ personalized and customized needs. This move will also help enhance the company’s market
Competitiveness.
”
Opportunities and challenges coexist
The decorative materials industry presents the characteristics of “large industries and small businesses”. The market sentiment follows the development and changes of the real estate market and is affected by the real estate completion cycle to a certain extent. It is currently entering a mature period in which the overall growth rate is slowing down.
However, there is a broad market for the redecoration of existing properties based on old renovation, old house renovation, and secondary decoration.
Yan Yuejin, Research Director of E-House Research Institute, said: “As market demand develops and changes, the pattern of the decorative materials industry will change in the future. Leading high-quality companies are expected to further expand their market share, while small businesses that do not have competitive advantages in cost, efficiency, innovation, etc. will face greater pressure. At the same time, integration and mergers and reorganizations are expected to accelerate, and track companies face both challenges and opportunities.”
At the policy level, the intensive introduction of multiple measures is conducive to the development of the decorative materials industry.
On June 29, the State Council executive meeting reviewed and approved “Several Measures to Promote Household Consumption.”
In July, 13 departments including the Ministry of Commerce issued the “Notice on Several Measures to Promote Home Consumption” and released it to the public.
On July 21, the State Council executive meeting reviewed and approved the “Guiding Opinions on Actively and Steadily Promoting the Transformation of Urban Villages in Super-Large and Mega-Cities”.
Zhang Xinyuan said: “With policy support, companies in the decorative materials track are facing new development opportunities. For example, the renovation and construction of urban villages requires a large amount of decorative materials, including floors, ceramic tiles, doors and windows, etc., which provides new market demand for industry companies and provides more business and cooperation opportunities, which is conducive to companies expanding their market share and achieving performance growth.”
