According to the Zhitong Finance APP, GF Securities has released a research report stating that 2025, as the concluding year of the &#34;14th Five-Year Plan,&#34; will see the completion of the renovation goals for old residential communities built before 2000 nationwide. It is expected that 27,600 communities and 980 million square meters of building area will be renovated throughout the year, directly driving investments exceeding 200 billion yuan. The four major categories of building materials—architectural coatings, insulation materials, waterproof materials, and plastic pipes—are expected to gain incremental markets of 4 billion, 3 billion, 3.3 billion, and 3.3 billion yuan respectively, with demand growth rates reaching 1.7%-2.5%. With the arrival of the stock housing era, the renovation of old communities is expected to continuously support mid-term demand in the building materials industry. Considering the industry's benefits, the business layout of listed companies, and the industry landscape, the firm believes that SKSHU, China Liansu, ORIENTAL YUHONG, BNBMPLC, Keshun, and ASIA CUANON will benefit more fully and recommends paying attention to them.
<h2>GF Securities' main viewpoints are as follows:</h2>
Renovation of old communities enters the concluding year of the 14th Five-Year Plan, with policies continuously ramping up
This year marks the concluding year of the &#34;14th Five-Year Plan,&#34; which means that the work of renovating urban old communities built before 2000 has entered its final stage. In fact, many regions have already included old communities built before 2005 in the scope of urban renewal. Since 2025, urban renewal policies have continued to be introduced to promote urban renewal. According to the Ministry of Housing and Urban-Rural Development, nearly 280,000 urban old communities have been cumulatively renovated nationwide since 2019, benefiting 120 million residents. In recent years, the government has increased support for the renovation of old communities, with diversified funding sources, making funding issues less of a constraint on the promotion of &#34;old community renovation.&#34;
Estimating the demand for building materials driven by &#34;old community renovation&#34;: significant benefits for architectural coatings, insulation materials, waterproof materials, and plastic pipes
Assuming that 27,600 communities will be renovated nationwide in 2025, corresponding to a building area of 980 million square meters, the renovation of old communities will drive investments exceeding 200 billion yuan, likely leading to substantial growth in various building materials. The main beneficiaries will be architectural coatings, insulation materials, waterproof materials, and plastic pipes, which are expected to bring markets of 4 billion, 3 billion, 3.3 billion, and 3.3 billion yuan respectively, driving industry demand by 2.0%, 1.7%, 2.5%, and 2.1%, with similar annual average demand proportions during the 15th Five-Year Plan.
International analysis: experiences of Japan, South Korea, and Singapore in &#34;old community renovation&#34;
Compared to the renovation of old communities in Japan, South Korea, and Singapore, China's &#34;old community renovation&#34; is still in its infancy, and there is still a need for gradual planning and improvement in institutional frameworks, policy systems, and working mechanisms. Although there are significant differences in funding sources, renovation content and pace, and leading entities, referencing the experiences of these countries, the renovation of old communities is an essential part of urban development. The overall &#34;old community renovation&#34; cycle in Japan and South Korea is about 20 years, but the frequency of specific project renovations varies. For example, the frequency of exterior wall repainting projects is significantly higher than that of other projects, with Singapore stipulating that exterior wall repainting occurs every five years. As the number of stock housing and the age of buildings increase, &#34;old community renovation&#34; will have sustainability.
&#34;Old community renovation&#34; drives urban renewal, activates the stock housing market, and ensures mid-term demand for the building materials industry
Currently, the area of new housing starts and completions in China has significantly declined year-on-year. Under the dual factors of improving the external environment of communities and a substantial aging structure of housing, the renovation of old communities may become a breakthrough point for activating the stock housing market, leading to simultaneous renovation effects both indoors and outdoors
In the future, as the number of existing residential properties in our country continues to grow, the average age of residential buildings increases year by year, and the proportion of second-hand housing sales rises, the demand for the renovation of existing residential properties will increase. Referring to the experience of the United States, the renovation of existing properties may replace new construction as the highest demand source for downstream consumption of building materials, providing long-term demand assurance for building materials consumption.
Risk Warning: The promotion of &#34;old renovation&#34; policies may fall short of expectations; the fiscal expenditure corresponding to &#34;old renovation&#34; may be less than expected; the calculated results may deviate from actual conditions

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Guangfa Securities released a research report stating that by 2025, the renovation of old residential communities built before the year 2000 will be completed nationwide, directly driving investments of over 200 billion yuan. Four types of building materials—architectural coatings, insulation materials, waterproof materials, and plastic pipes—will benefit significantly. It is recommended to pay attention to companies such as SKSHU, China Liansu, ORIENTAL YUHONG, BNBMPLC, Keshun, and ASIA CUANON. The continuous advancement of old renovation policies is expected to ensure mid-term demand in the building materials industry

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Guangfa Securities: Renovation of old residential communities drives 200 billion investment, four types of building materials benefit the most