Architectural coatings show strong growth, and the market capacity is increasing day by day
architectural coatings show strong growth, and the market capacity is increasing day by dayAt the coating industry conference held a few days ago on August 5, 2020, China Coating Association summarized three characteristics of the economic operation of the coating industry in the first half of 2020: first, the operation of large enterprises recovers relatively quickly, and small and medium-sized enterprises are relatively difficult; Second, architectural coatings showed strong growth, breaking through the same period last year; Third, the growth power of industrial coating materials is insufficient, but due to the impact of raw materials, the profit growth is better than that of the same period last year. Now let's talk about the second point - architectural coatings
switch to a mature market, and the industry concentration is expected to continue to increase.
the total market size of China's coatings exceeds 300billion, and architectural coatings account for about 29% of coatings. China's total paint market has exceeded 300billion yuan, occupying an important position in the global paint market. According to the statistics of China Coating Industry Association, in 2019, the coating output of Enterprises above Designated Size in China was 24.39 million tons, with a year-on-year increase of 2.6% after adjustment according to comparable caliber; The operating income of coating enterprises above Designated Size in 19 years was 313.2 billion yuan, a year-on-year decrease of 0.6% after adjustment according to comparable caliber, mainly due to the fact that the cut of contact terminal is also very small in the development and integration period due to the fierce price competition; Coating enterprises above Designated Size achieved a total profit of 23billion yuan, benefiting from the overall low level of upstream petrochemical raw materials, with a year-on-year increase of 9%. In 2019, China's construction coating output was 6.94 million tons, a year-on-year increase of 7%, accounting for 28.5% of the national coating output
continuous improvement after completion is conducive to the demand for new coating
according to statistics, the national sales revenue of architectural coatings in 2019 was about 133.2 billion yuan, a year-on-year increase of 2.5%. At present, China's downstream demand is still dominated by new commercial housing, and the demand for new commercial housing accounts for more than 50% · discussion on the preparation process of carbon fiber raw silk. As the coatings are mainly used in the stage of partial completion, the stage of exterior wall/interior wall of hardbound house or interior wall of rough house, Therefore, the demand is highly related to the completion of the real estate. Compared with the real estate data, the output of architectural coatings in China fluctuates more violently, which also reflects that the paint demand is highly sensitive to the new commercial housing. Since 17 years ago, there has been a scissors gap between the newly started area and the completed area of houses in China. The cumulative year-on-year growth rate of the completed area has rebounded, and the previous newly started and constructed area has gradually turned to the completed area. It is expected that the completion improvement trend will remain unchanged this year, and the toughness of the new coating demand will support the development of the coating market
the demand of the stock market is gradually released, and the market space is broad.
most of China's houses are built after 2000. With the growth of housing age, the demand for reloading is expected to be released rapidly. According to our calculations, China's stock construction market is huge, with an average annual reloading area of 4.7 billion square meters. After the experiment broke, the oil delivery valve was closed. Since 2019, the central government has paid more attention to the old residential areas, and 20-year special bonds can be used for the old reconstruction, The State Council has determined that there are 39000 old residential areas, involving nearly 7million households. According to the calculation in our April 19 report "new branches will be made in the spring of infrastructure construction, and the old residential areas will be more consumer oriented", the old residential area reconstruction is expected to drive the demand for interior and exterior wall coating of about 40billion yuan. From the housing transaction data, the proportion of second-hand housing transactions in 18 years has reached 35%, and the proportion of second-hand housing transactions in the first and second tier cities is even higher, with some cities accounting for more than 50%. Second hand housing transactions are often accompanied by the re installation of the wall to enhance the core competitiveness of products, bringing new market demand. The gradual release of housing stock market demand means that the future development trend of China's coating market or the course of developed countries such as the United States can be copied. Compared with the new coating demand, the consumption attribute of the coating market driven by the re coating demand is stronger, the periodicity is weakened, and the industry income and profit growth center tends to be stable