The “warmth” of repairing the structurally low level of the property market is being transmitted in an extremely uneven manner along the industrial chain.
To see clearly which tracks can be the first to receive performance support, we need to examine their situations and opportunities from three different perspectives: upstream suppliers, downstream consumer goods companies and policy drivers.
From the perspective of upstream raw material suppliers: steel is still losing money, while consumer building materials have doubled their performance.
The ups and downs of upstream industries directly reflect the intensity and structure of real estate construction.
Currently, the upstream world is experiencing a fierce “two heavens of ice and fire.”
The steel industry is still suffering from the imbalance between supply and demand.
In 2025, the apparent consumption of crude steel nationwide will decrease by 7.1% year-on-year, and the decline in demand will be greater than the decline in output.
In terms of price, the price of rebar fluctuates around 3,000 yuan/ton, which is half of the high point in 2021.
At the corporate level, Anshan Iron and Steel Co., Ltd. will suffer a loss of 4.048 billion yuan in 2025, and the loss will further expand to 1.457 billion yuan in the first quarter of 2026.
This shows that demand for “old infrastructure”, which relies on large-scale new construction, has not yet picked up.
However, the consumer building materials sector has reached a clear operating turning point.
In the first quarter of 2026, the net profit attributable to the parent company of the consumer and building materials sector increased by 41.4% year-on-year.
Among the segmented tracks, the waterproof industry performed the most eye-catchingly: the revenue of the sample companies increased by 17% in the first quarter, and their profits soared by 100%.
The leading company Oriental Yuhong’s net profit attributable to its parent company increased significantly by 108.89% year-on-year in the first quarter.
With a market share of about 70%, gypsum board leader Beixin Building Materials also increased its gross profit margin by 0.6 percentage points in the first quarter after the price increase was implemented.
This differentiation reveals the core logic: the current recovery of the property market is not driven by the new construction of “Daqian Kuaishang”, but by the demand for renovation and partial improvement of existing housing in core cities.
The demand for products such as waterproofing and coatings is stronger in home decoration and old house renovation, and the proportion of retail channels has increased, making it the first to get rid of the downturn on the engineering side.
Turn to downstream home appliances and home furnishing companies: the overall market is shrinking, but smart and high-end categories are expanding.
Downstream industries are directly oriented to consumers, and their performance can better reflect residents’ true investment direction in housing improvement.
The differentiation here is equally striking.
White goods giants are under pressure from industry cycles.
In 2025, the domestic home appliance retail market will decline by 4.3% year-on-year.
Gree Electric’s consumer appliances sector revenue in 2025 fell 10.44% year-on-year, of which domestic sales revenue fell 10.67%.
This reflects overall weakness in demand for major appliances, which are strongly associated with new homes.
However, the structural growth highlights are outstanding.
Smart and high-end categories are growing against the trend: In 2025, retail sales of furniture will increase by 14.6% year-on-year, with smart homes and aging-friendly transformation becoming new growth poles.
Retail sales of cleaning appliances (such as sweeping robots) increased by 11.3%.
High-end kitchen appliances show resilience: Robam Electric’s AI digital kitchen appliance sales will increase by 36% in 2025, and sales of disinfecting dishwashers will increase by 80% year-on-year.
Emerging tracks are rising rapidly: Online sales of pet home furnishings will increase by 9.1% year-on-year in 2025, and brands such as IKEA and Sofia have launched special “pet-friendly” home furnishing solutions.
The key conclusion from the downstream perspective is: when the incremental market slows down, the “quality upgrade” of the existing market becomes the core driving force.
Consumers are no longer satisfied with “have or not”, but pursue “good or not”, which has created new performance growth points for smart, healthy and personalized home appliances.
At the same time, companies such as Midea Group have effectively hedged against the decline of traditional home appliance business by diversifying businesses such as industrial technology and building technology (revenue in this sector will increase by 17.5% in 2025), demonstrating stronger anti-cyclical capabilities.
Finally, from the perspective of policy drivers and capital markets: dividends flow to existing operations and core cities.
Policy is an important exogenous variable in the current property market recovery, and its direction determines the flow of funds and resources, which in turn affects the performance of related tracks.
Urban renewal provides long-term certainty.
The State Council’s “15th Five-Year Plan” urban renewal plan has clarified quantitative goals such as renovating about 115,000 old urban communities and about 4,000 urban villages.
The agency predicts that this will bring a total market capacity of 15-20 trillion yuan within five years, directly benefiting construction, decoration, building materials and other fields.
Relaxation of purchase and loan restrictions activates transactions in core cities.
The effect of the policy was immediate. For example, during the May Day holiday in Shenzhen, the number of second-hand housing contracts increased by 103% – 150% year-on-year.
This directly benefits the existing transaction service track, such as real estate agency platforms, whose commission income increases with the transaction volume.
The capital market has voted with its feet.
The main lines recommended by mainstream institutions are highly consistent: leading central state-owned enterprises in core cities: financially stable and benefiting from increased market concentration.
Existing transaction and operation services: such as second-hand housing brokerage and property management, which have stable cash flow in the existing era.
Consumer building materials: directly benefit from the demand for old renovation and stock renovation.
CICC further predicts that significant recovery on the operating side of real estate companies may not occur until around 2028, but this is the window period for the valuation recovery of the layout sector.
This implies that the performance recovery of the industrial chain will be much earlier than the overall recovery of the developers themselves.
Comprehensive judgment: performance support map under structural repair.
By integrating the three dimensions of analysis, we can clearly draw a map of the track where performance can be supported first in the current property market recovery: the main engines are “stock” and “quality”: whether it is upstream consumer building materials or downstream smart homes, their growth momentum comes from the renovation of existing houses and consumption upgrades, rather than the large-scale construction of new homes.
Core cities are the main battlefield: policy relaxation and demand recovery will begin in first- and second-tier cities, so enterprises and service providers that are deeply involved in these areas will be the first to benefit.
Policy dividends are highly focused: urban renewal, affordable housing construction, “old for new” and other policies are accurately drip-fed to specific links such as building renovation, building material replacement, and home upgrades, driving related industrial chains.
Therefore, the answer is already clear: performance support will first appear in consumer building materials (waterproofing, coatings, gypsum boards), smart homes and high-end home appliances, as well as related sectors that serve the transaction and renewal of existing housing in core cities.
This restoration is not a general increase that is equally affected by rain and dew, but a structural revaluation centered on “stock” and “quality”.
