Investment Rating - The report maintains a "Positive" investment rating for the building materials industry [14] Core Insights - The building materials sector has entered a stock era, with increasing demand for renovation driven by urban renewal, which focuses on public domain renovations alongside home decoration [4][20] - Since the central government's deployment of urban renewal in 2019, the demand for urban renewal has steadily increased, with certain categories like exterior wall coatings and waterproofing seeing their share rise to approximately 30% [4][9] Summary by Sections Urban Renewal Overview - Urban renewal is a necessary redevelopment process for cities at a certain stage of development, focusing on the integration and renovation of outdated residential areas, old commercial zones, and villages within cities to meet modern needs [8][20] - The current trend in urban renewal is shifting from extensive demolition to comprehensive remediation, leading to larger scales of renovation and more refined demand for building materials [8][20] Demand Analysis - In 2024, the total demand area is estimated at approximately 4.55 billion square meters, with old residential area renovations accounting for about 1.11 billion square meters and village renovations about 0.14 billion square meters, making urban renewal's share of the total area around 28% [9][44] - By 2025, under a neutral assumption, the area for old residential renovations is projected to be 1.16 billion square meters, with urban renewal's share potentially reaching 32% [9][44] Old Residential Area Renovation - The renovation of old residential areas has exceeded initial targets, with nearly 280,000 projects completed from 2019 to 2024, benefiting approximately 120 million residents [10][42] - The primary building materials involved in these renovations include exterior wall coatings, waterproofing, and insulation [10][44] Village Renovation - The scope of village renovations is expanding, with 1,863 projects implemented in 2024, benefiting 1.367 million households [11] - The government plans to continue expanding the scale of renovations, with an additional 1 million units expected to be implemented [11] Underground Pipeline Renovation - Policies for urban pipeline renovations are intensifying, with a target of over 100,000 kilometers of underground pipelines to be renovated annually [12] - The total investment demand for pipeline renovations is estimated at around 4 trillion yuan, with an annual average of 1.2 trillion yuan [12]