The "anti-involution" efforts in the building materials industry are beginning to show results, with some companies experiencing profit growth last year. The industry is shifting from "competing on price" to "competing on strength."

How Can Brand Upgrades Help the Industry Break Free from Price Competition?

Reporter: Li Kaixuan, Beijing

In 2025, after entering a deep adjustment period, the building materials industry has seen significant improvements in the performance of some companies through a series of “anti-involution” measures. Taking the cement industry as an example, some companies expect their annual net profit for 2025 to increase by more than 10% year-on-year. Analysts believe that this year, as the “anti-involution” efforts continue to advance, the supply-demand relationship in building materials is expected to gradually restore.

At the same time, leading building material companies are seizing opportunities in “good houses,” urban renewal, and other areas to implement brand reforms during the industry’s adjustment period, enhancing product quality, with brand power and product strength serving as the core ballast for the companies.

Performance Growth of Some Building Material Companies

Huaxin Cement Co., Ltd. (600801.SH, hereinafter referred to as “Huaxin Cement”) announced that it expects to achieve a net profit attributable to the parent company’s owners of 2.7 billion to 2.95 billion yuan for the year 2025, an increase of 280 million to 530 million yuan compared to the same period last year, representing a year-on-year increase of 11.6% to 21.9%.

“During the reporting period, the scale of the company’s overseas business continued to grow, contributing significantly to performance. The domestic business still faces a severe market competition environment, but thanks to the decline in fuel costs and the company’s unwavering commitment to deepening various cost-reduction and efficiency-increasing measures, the unit profitability of major products has recovered,” said Huaxin Cement regarding the reasons for the performance increase.

Guangdong Tapai Group Co., Ltd. (002233.SZ, hereinafter referred to as “Tapai Group”) reported that its operating revenue for 2025 is expected to be 4.107 billion yuan, a year-on-year decrease of 3.99%; the net profit attributable to shareholders of the listed company is expected to be 634 million yuan, a year-on-year increase of 17.87%.

Tapai Group stated that in 2025, domestic cement prices are expected to show a trend of “high first then low, fluctuating downward” throughout the year. In the first quarter, driven by policy guidance and industry self-discipline, the “anti-involution” process achieved phased results. Coupled with the company’s cost reduction and efficiency enhancement as well as diversified operations, net profit has generally recovered. However, after the second quarter, the industry situation took a sharp turn for the worse, with both volume and price declining, especially in the fourth quarter, where the profit recovery effect was not significant, leading to a reduction in the profit advantages accumulated in the first half of the year.

A research report released by Galaxy Securities shows that in 2025, various sub-industries within building materials actively responded to the call for “anti-involution,” and progress has already been made. Looking ahead to 2026, as the “anti-involution” policies and green policies continue to advance, more sub-industries in building materials will usher in substantial capacity reduction, gradually restoring the supply-demand relationship and transforming the competitive order of the industry toward a healthier direction.

Transformation of Industry Structure

As mentioned above, “anti-involution” remains one of the main themes for the building materials industry in the near future. This year’s government work report emphasized strengthening anti-monopoly and anti-unfair competition efforts, reinforcing rigid constraints on fair competition reviews, and using various means such as capacity regulation, standard guidance, price guidance, and quality supervision to thoroughly rectify “involutionary” competition.

At the same time as “anti-involution,” reporters from the “Huaxia Times” have noted that the building materials and home furnishing industry has entered a deep adjustment period, with fundamental changes occurring in market operation logic. From the demand side, customers are no longer satisfied with purchasing single materials; instead, they expect complete delivery, reliable services, and systematic solutions. The shift from single products to multiple categories, from products to services, has become a definite trend in industry development.

On March 20, the Party Secretary, Chairman, and General Manager of Beijing New Building Materials Group stated that the structure of the building materials industry is undergoing profound changes, with new demand opportunities continuously emerging. Good houses, urban renewal, and beautiful countryside construction are continuously creating new market spaces. Ding Shanghua, the temporary Party Secretary and General Manager of Longpai Company, also believes that the building materials industry is currently shifting from incremental expansion to stock competition, with market structure, consumer logic, and competitive logic undergoing profound changes.

In the context of market competition, how should brands break through? Xie Xin, Deputy Secretary-General of the All-China Federation of Furniture and Decoration Industry and President of Xihai Foundation Education Group, told reporters from the “Huaxia Times”: “The arrival of the stock housing era signifies a fundamental change in the home decoration market ecosystem. Leading brands are continuously iterating their products and services around the pain points of decoration companies. Only by deeply cultivating technology and solidifying quality can they empower their brands with products and win long-term market recognition.”

Brand Upgrades are a Hard Truth

On March 20, Longpai, a subsidiary of China National Building Material Group, underwent a brand renewal. “As a brand with nearly 50 years of accumulation, Longpai is implementing brand renewal and transformation upgrades in line with new circumstances, which is both imperative and filled with confidence,” management stated.

Management noted that this launch is not just about new products but also a suite of system solutions aimed at the new era, relying on technological accumulation and in-depth thinking about future industrial development.

“Beijing New Building Materials Group constructs a green building material solution covering all scenarios, all cycles, and all demographics with ‘four transformations.’ This brand renewal of Longpai is not only a renewal of visual image but also aims to lead the industry out of low-level involution and promote the establishment of a healthy industry development ecology,” Ding Shanghua stated at the brand renewal ceremony.

Specifically, Longpai has launched a new generation of home decoration retail products, including China Red, Dragon Clan, National Treasure, National Tide, and Five Blessings series. Taking the Longpai Cloud Sensation Warm Protection Board as an example, the product is designed with newlywed couples, parenting families, and elderly users as its target audience, focusing on the core functions of cleanliness, warmth, and imperceptible protection, creating a product tone of simplicity, understated luxury, and comfortable technology, allowing the Longpai Cloud Sensation Warm Protection Board to blend into the space.

Additionally, on the technical front, He Yadong, General Manager of the Technology Department of Longpai Group, told reporters from the “Huaxia Times” that Longpai has launched a new generation of Longpai High Soundproof Fireproof Partition Ceiling System Solution, focusing on residential noise pain points, achieving a sound insulation level of 53 decibels, better than traditional walls, while saving indoor space and reducing building weight.

Editor: Zhang Bei Chief Editor: Zhang Yuning