Analysis of the market status and prospects of China's coatings industry

01

Industry chain analysis of coating industry

The upstream industries of the coatings industry include the manufacturing of chemical raw materials such as resins, solvents, pigments, fillers and additives, while the upstream of chemical raw materials such as resins and solvents is the petrochemical industry. The downstream of the coatings industry is mainly construction, furniture, automobile, home appliances and other manufacturing enterprises and the home decoration market.

The impact of upstream raw materials on the industry is mainly reflected in two aspects: first, the stability of the output scale affects the stability of the supply of raw materials in the coatings industry; second, the price of raw materials affects the production cost of coatings. The influence of the downstream product market on the coatings industry is mainly reflected in the market scale and development trend of the coatings.

02

China's paint output exceeds 24 million tons

my country's paint output and operating rate have rebounded in recent years, and the market has great potential for development. From the perspective of supply, from 2014 to 2019, the output of the Chinese coatings industry has increased year by year. In 2019, the output has reached 24.388 million tons, a slight increase from 2018, an increase of 2.60% year-on-year; the average annual compound growth rate is 9.27%.

03

Analysis of the market competition pattern of China's coatings industry

There are many companies participating in the market competition in the coating industry, and the industry competition is fierce. With sufficient market competition, the industry's market share has gradually concentrated to well-known brand companies, and has shown a relatively obvious echelon level.

The first echelon companies: covering the coating industry with a full range of products, and have a certain strong leading position in the field of functional coatings and special coatings, such as PPG, Sherwin-Williams, Nippon, Akzo Nobel and other multinational coating groups.

Second-tier companies: have strong competitive advantages in some subdivisions of the coatings industry, such as Carpoli, Sankeshu, Asia Chuangneng, China Resources Coatings, Oriental Yuhong and other companies, among which the walls of the three trees Surface coatings have a strong competitive advantage, and in 2020 it will rank among the top 10 global listed coating companies in terms of market value.

Third-tier companies: obtain profits by producing low-quality and low-price products, and are at a disadvantage in terms of technical strength, production scale, research and development, etc., and their competitiveness is relatively weak; a large number of small domestic paint manufacturers are in the third tier.

04

Performance Analysis of Chinese Local Coatings Listed Companies

In the first half of 2020, among the listed domestic paint companies in China, Oriental Yuhong had the highest operating income, reaching 8.783 billion yuan, far ahead of other companies; followed by Keshun shares and Sankeshu with operating income of 2.659 billion yuan and 2.5.95 billion yuan respectively. 100 million yuan.

Among the top 5 domestic listed coating companies in China in the first half of 2020, the operating income of Keshun Co., Ltd. increased the most year-on-year, reaching 34.70%; while China Electric Research Institute achieved negative growth, with operating income of 1.086 billion yuan in the first half of the year, a year-on-year decrease of 21.76%.

In the first half of 2020, the trend of net profit of listed coatings companies is basically consistent with operating income. The top three are Dongfang Yuhong, Keshun and China Electric Power Research Institute, with net profits of 1.097 billion yuan, 290 million yuan and 129 million yuan. . Asia Chuangneng ranked fourth in net profit of 111 million yuan in the first half of the year, and Feikai Materials achieved net profit of 110 million yuan in the first half of the year, slightly surpassing Sankeshu’s 109 million yuan, ranking fifth.

05

Analysis of the development prospects of China's coatings industry

The "Thirteenth Five-Year Plan for China's Coatings Industry" pointed out that benefiting from both industrial and civil demand, during the "13th Five-Year Plan" period, the industry's total economic output maintained steady growth, with an average annual growth rate of about 6.5% in total output value. By 2023, the total output value of the coatings industry is expected to increase to about 690 billion yuan; the output is calculated at an average annual growth rate of 5%. By 2020, the total output of the coatings industry is expected to increase to about 27 million tons.

Considering that the growth rate of China's paint production in 2019 is only 2.60%, and the continued impact of the COVID-19 epidemic in 2020, the factory operating rate will be greatly affected. It is expected that the paint output will decline to 23 million tons in 2020. about. In the future, China's paint output will grow at a compound growth rate of 2.6%. By 2025, the national paint output will be close to 27 million tons.