--- title: "Guotai Junan: The consumer building materials industry has comprehensively lowered expectations, and industry profits are expected to rebound" type: "News" locale: "en" url: "https://longbridge.com/en/news/233082459.md" description: "Guotai Junan released a research report indicating that the consumer building materials industry has generally lowered its revenue growth expectations for the first time, which is expected to promote a rebound in industry profits. Gross margins and expense ratios are expected to improve, and price competition is becoming milder. Recommended leading companies to pay attention to include ORIENTAL YUHONG, BNBMPLC, and WEIXING NBM. Overall, the industry is shifting from high-speed growth to high-quality operations, with financial budgets becoming more conservative and competitive strategies becoming more robust" datetime: "2025-03-25T08:39:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/233082459.md) - [en](https://longbridge.com/en/news/233082459.md) - [zh-HK](https://longbridge.com/zh-HK/news/233082459.md) generator: "portal-rs" --- # Guotai Junan: The consumer building materials industry has comprehensively lowered expectations, and industry profits are expected to rebound According to the Zhitong Finance APP, Guotai Junan released a research report stating that leading companies in the consumer building materials sector have, for the first time in recent years, generally slowed their revenue growth expectations, which is conducive to a recovery in profitability within the industry this year. On the gross margin front, both leading and long-tail companies are gradually accepting the new landscape, which is easing price competition; on the expense side, a shift towards conservative budgeting and a moderation in channel inventory price declines are expected to effectively improve the industry-wide expense ratio. The profit margin for consumer building materials is relatively low, and during the process of returning to a reasonable central level, it is expected to show some elasticity. In terms of targets, it is recommended to focus on leading consumer building materials companies such as ORIENTAL YUHONG (002271.SZ), BNBMPLC (000786.SZ), WEIXING NBM (002372.SZ), TuBao (002043.SZ), SanKeShu (603737.SH), KeShun Co., Ltd. (300737.SZ), China Liansu (02128), Dongpeng Holdings (003012.SZ), and Mona Lisa (002918.SZ). ## Guotai Junan's main viewpoints are as follows: **As the industry broadly lowers expectations, price competition is expected to ease** Guotai Junan pointed out that **in 2025, major companies in the consumer building materials industry have, for the first time in recent years, begun to slow their revenue growth expectations, transitioning from a high-speed growth strategy to a high-quality operation paradigm. This change is most directly reflected in the conservative financial budgeting, which can also be indirectly verified by adjustments in capital expenditure and employee structure.** Over the past three years from 2022 to 2024, price competition in various sub-sectors of consumer building materials has shown a continuous intensification trend, primarily driven by the most competitive leading companies or the least competitive long-tail companies, essentially reflecting dissatisfaction with the existing landscape. As the expectations of leading companies are adjusted downward, their willingness or marginal intent for price competition may weaken; for long-tail companies, with the dust settling from a round of industry clearing, their competitive strategies are also expected to shift towards more stability. Therefore, the industry's price competition is expected to see marginal easing. **Gross margins are expected to stabilize, and expense ratios are expected to improve** From the perspective of gross margins, under the assumption that price competition is expected to ease, another core influencing factor is costs. **Raw materials account for a high proportion of costs in consumer building materials, temporarily assuming stability; further cost reduction efforts are expected on the non-raw material production side, thus the assumption for gross margins is expected to stabilize.** On the expense side, the previous factors of "overly high budgets" + "channel price declines" are both expected to see some improvement. Previously, many consumer building materials companies experienced situations where expenses met budgets but revenues did not, and as expenses shift towards more stable revenue budgets, the expense ratio is expected to improve. Additionally, in price competition, some sales expenses used to compensate for losses from channel inventory price declines are also expected to improve under the assumption of stabilized price competition, thus expectations for expense ratios are optimistic. **Profit recovery may lead revenue expansion** Against the backdrop of price order reconstruction, deepening cost reduction measures, and meticulous expense management, it is expected that within the year, the net profit margins of major companies will begin to recover from low levels to relatively reasonable central levels. The low base of profit margins is expected to bring sufficient profit elasticity. \*\*In fact, in the future regarding revenue, in terms of categories: industries where previous price competition was relatively sufficient, and where industry leaders have begun to take action, such as the waterproofing industry and the coatings industry, are likely to see changes occur more rapidly; The profitability resilience of sectors such as gypsum board may be relatively strong. \*\* There may be significant fluctuations in the rhythm between quarters, with the earliest signs expected to manifest in Q1 2025, and the advantages of the base may become more apparent in subsequent quarters. **Risk Warning** Risks related to macro policies in real estate and raw material cost risks ### Related Stocks - [002271.CN](https://longbridge.com/en/quote/002271.CN.md) - [002372.CN](https://longbridge.com/en/quote/002372.CN.md) - [000786.CN](https://longbridge.com/en/quote/000786.CN.md) - [02128.HK](https://longbridge.com/en/quote/02128.HK.md) - [003012.CN](https://longbridge.com/en/quote/003012.CN.md) - [300737.CN](https://longbridge.com/en/quote/300737.CN.md) - [603737.CN](https://longbridge.com/en/quote/603737.CN.md) - [02611.HK](https://longbridge.com/en/quote/02611.HK.md) - [002043.CN](https://longbridge.com/en/quote/002043.CN.md) - [002918.CN](https://longbridge.com/en/quote/002918.CN.md) ## Related News & Research - [Is it still protectionism when a national champion is part foreign-owned?](https://longbridge.com/en/news/296408762.md) - [Cocoa Prices Fall on Rising Nigerian Cocoa Exports](https://longbridge.com/en/news/296637826.md) - [Vector Science files US provisional patent for orthopedic tissue-regeneration peptide platform](https://longbridge.com/en/news/296483037.md) - [peaq: peaqOS integrates World ID for private human verification - 22 Aug 2026](https://longbridge.com/en/news/296680578.md) - [One seemingly ordinary job has gotten much more deadly over the past 10 years, federal data shows](https://longbridge.com/en/news/296704689.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**