Summary of Key Points from the Conference Call of Keshun Co., Ltd. Company Overview - **Company**: Keshun Co., Ltd. - **Industry**: Waterproofing materials Core Insights and Arguments 1. **Revenue Expectations**: Keshun anticipates that Q2 2025 revenue will be flat or slightly down compared to the same period last year, but expects positive growth in the second half of 2025 due to a low base from the previous year [2][3] 2. **Market Demand**: The real estate sector continues to decline, while demand in municipal infrastructure and commercial construction remains strong, with overall growth in Q2 approaching 30% [2][20] 3. **Profitability Challenges**: The waterproofing industry is experiencing shrinking profitability, prompting leading companies to implement price increases to improve financial statements [2][4] 4. **Price Increase Strategy**: Keshun has initiated a price increase of 3%-5% starting July 10, 2025, with even a 1%-2% increase seen as a positive signal for gross margin improvement [2][9][10] 5. **Market Dynamics**: The competitive landscape is primarily among a few listed companies, and coordinated price increases can mitigate market share loss risks [12][41] 6. **Market Size and Share**: Total demand in the waterproofing market is estimated at approximately 100-110 billion yuan, with an effective market size of 70-80 billion yuan. The top three companies hold about 40% market share [2][13] 7. **Challenges for New Entrants**: Companies from other industries entering the waterproofing sector, such as Sankeshu and Yashi, have struggled, with expectations of declining investment and market share [2][14] 8. **Business Segments**: Keshun's business includes retail, overseas sales of waterproof materials, and commercial construction projects, with retail expected to account for nearly 20% of revenue in 2025 [2][19] 9. **Regional Expansion**: Keshun has established a joint venture factory in Xinjiang, aiming to cover local business and export to Central Asia, with sales expected to reach 30-35 million yuan in 2025 [4][23] Additional Important Insights 1. **Impact of Government Policies**: The company is preparing for the "14th Five-Year Plan" and is closely monitoring government planning to align its strategies accordingly [4][24] 2. **Urban Renewal Projects**: Keshun is focusing on urban renewal and old community renovation, with the repair segment accounting for over 40% of total business volume in the first half of 2025 [27][30] 3. **Community Store Model**: The company is expanding its community store model to enhance customer service and satisfaction, with plans to increase the number of stores significantly [30][29] 4. **Future Profitability Goals**: Keshun aims to achieve a revenue scale of 1.3 to 1.4 billion yuan in 2025, with a focus on turning losses into profits [32] 5. **Market Recovery Outlook**: The waterproofing industry is in a recovery phase, with expectations of improved market conditions in the coming years, supported by policy changes and increased infrastructure demand [41][42] This summary encapsulates the key points discussed during the conference call, highlighting Keshun's strategic direction, market conditions, and future expectations in the waterproofing industry.