The Surface + Design Event China 2020

2020.12.9-11 | Shanghai New International Expo Centre(SNIEC)

 

Ceramic tile industry: good business concentration increases, opportunities come

The status of the ceramic tile industry chain is not weak. The upstream raw material clay like kaolin is abundant in China. Due to the low mining technical barriers, the manufacturers are scattered. The market competition of the glaze industry is also full. The upstream has no advantage in the industry chain for the ceramic tile industry. For the downstream, due to the natural characteristics of ceramic tile products: personalization, fast style change, etc., the distribution model enterprises can continue to launch new products and have direct pricing power for downstream users. The direct selling model is easy to form a scale effect. As the scale increases, the status of the ceramic tile company will gradually improve, forming a virtuous circle of larger scale-lower cost-larger scale.

The position of the industrial chain guarantees that the excellent ceramic tile company has a good profitability. The added value of ceramic tile products in the industrial chain is high, and the status of the industrial chain with high valuation has become the basis for excellent companies to maintain high profitability. Even if the industry scale shrinks into the cold winter, the ROE level of listed ceramic tile companies can remain stable at more than 10%. At the same time, EBITDA/operating income, net profit margin and ROIC all remained at a high level. For example, Mona Lisa’s EBITDA/operating income is stable at more than 15%, net interest rate has been stable at more than 10% since 2016, and ROIC has stabilized at more than 12% since 2014.

The increase in concentration guarantees an overall upward trend in the industry’s high profitability. The ceramic tile industry is large, with a level of 300-500 billion yuan. But the level of concentration is extremely low, and the market share of leading companies is less than 3%. And regardless of whether the industry’s demand and scale are in a contraction period or an expansion period, the market share of excellent companies has been constantly improving. Although the rate of improvement is not fast in the early stage, in 2020, as the production capacity of excellent companies is released, the market share is accelerated. stage. The increase in concentration will further advance the status of the ceramic tile industry chain. The survival environment of small enterprises in the industry has deteriorated in the process of increasing the concentration, the proportion of hardcover houses has increased, the real estate bidding requirements have increased, the 2B business account period has been extended, and environmental protection has increased the cost of enterprises. 2C has been greatly affected by the epidemic, and some have become excellent companies. OEM, some were forced to withdraw from the tile market. All of the above ensure the stability and upward trend of high profitability of excellent ceramic tile companies.

Industry expansion is imminent in 2020, and excellent companies have huge room for expansion. The demand of the ceramic tile industry has a great relationship with the completion of the house. The completion of the house in 2020 will enter the release stage. From the huge scissors gap between the sales area and the completed area, the demand for the tile industry will enter the expansion stage. Excellent ceramic tile companies have also taken the lead in entering the stage of scale expansion following the development trend of the industry. For example, the capacity planning of Mona Lisa has doubled, and has begun to gradually put into production. The application of information technology, intelligent manufacturing technology and changes in the sales model of ceramic tile enterprises have helped to increase the scale of enterprises. The market share level of Chinese ceramic tile companies is huge compared with the foreign level of 40-50%. As the industry’s demand enters an expansion period, excellent companies’ new production capacity enters the stage of release and the application of new technologies, the operating income scale of China’s excellent ceramic tile companies has huge room for improvement, and there is a possibility of doubling and doubling.

As we all know, the Chinese nation has a long history and created a Chinese culture that has attracted worldwide attention. The Chinese ceramic tile people only need to dig into the traditional Chinese culture, absorb a lot of nutrients, and combine the decorative function of the ceramic tile, and integrate the excellent traditional cultural elements into the design of the ceramic tile. product. This innovative design based on its own conditions may be the product that leads the world’s ceramic tile trend. Casting quality with Western modern technology and giving soul to the traditional oriental culture, this kind of ceramic tile is the most classic, with both national characteristics and cultural thickness!

Source: Sina