Group 1 - The core viewpoint of the article emphasizes the transformation of the elevator market in China from a growth-oriented to a maintenance-oriented approach, aligning with the country's urbanization process [1] - KONE, a leading global elevator and escalator company, has successfully delivered its first batch of old elevator renovation projects supported by special long-term government bonds, with 2,196 residential elevators updated, of which KONE won 2,106 units, accounting for approximately 96% [1] - KONE's elevator update orders in China have maintained double-digit growth over the past three years, indicating a clear market opportunity and marking a significant strategic focus for the company globally [2] Group 2 - The Chinese market has the highest number of elevators in the world, with a total of 11.53 million elevators expected by the end of 2024, including 900,000 old elevators over 15 years old, which is projected to increase annually [1] - KONE is adapting to the diverse conditions of old elevators by implementing customized solutions, with 40% of updated elevators utilizing tailored approaches, while also focusing on cost reduction and shortened project timelines [2] - KONE's manufacturing facility in Kunshan has established a flexible production line specifically for old elevator renovations, allowing for adjustments to produce different specifications as needed [2]

Core Viewpoint - The aging residential elevators in China pose significant challenges, with approximately 900,000 elevators over 15 years old, leading to high failure rates and reliability issues, prompting government support for upgrades [1][2]. Group 1: Government Support and Funding - The National Development and Reform Commission and the Ministry of Finance have introduced policies to allocate around 300 billion yuan in special long-term bonds to support the replacement of old elevators and other key areas [1]. - Residents can receive a subsidy of 150,000 yuan for each elevator that is over 15 years old, significantly easing the financial burden of upgrades [1]. Group 2: Community Involvement and Funding Model - The funding model for elevator upgrades in the Tongpei Street area includes "bond subsidies + maintenance funds + owner contributions," with residents contributing approximately 600 yuan each [2]. - Community organizations are actively involved in ensuring transparency in the bidding process, selecting elevator brands, and negotiating extended maintenance and warranty periods with manufacturers [2]. Group 3: Progress and Implementation - As of now, nearly 600 applications for national bond support for elevator upgrades have been submitted in Xuzhou, indicating a proactive approach to addressing the issue [3]. - The first batch of 50 elevator upgrades in the Tongpei Street area has been completed, with an additional 120 applications currently under review [2].

Group 1: Industry Trends - The overall demand in the real estate market is declining, with new residential sales dropping below 10 trillion yuan in 2024, indicating a shift towards stabilizing the market [1] - In Q1 2025, new residential sales area and sales amount decreased by 3.0% and 2.1% year-on-year, respectively, showing a significant narrowing of the decline [1] - The elevator industry is experiencing a transformation with a shift from new installations to a focus on the after-market services due to changing demand structures [2] Group 2: Competitive Environment - The elevator industry faces intensified competition, with many companies experiencing pressure on revenue scales [2] - Price competition remains fierce due to the decline in new elevator demand, prompting companies to enhance operational efficiency and cost control measures [2] Group 3: After-Market Development - As of the end of 2024, there are 11.53 million elevators in China, leading to a rapid increase in service demand for maintenance, repairs, and upgrades [3] - Over 1 million elevators are over 15 years old, with the number of outdated elevators expected to rise, driving the need for modernization [4] - In 2024, 41,000 elevator update projects were supported by long-term national bonds, with a target of 60,000 in 2025, indicating a strong policy push for upgrades [4] Group 4: Company Strategy - The company's after-market business accounted for 15.39% of its revenue in 2024, highlighting its importance in the overall business strategy [4] - The company aims to transform its after-market service department from a "service center" to a "profit center" by enhancing its market capabilities and technical support [5] - The company is actively monitoring changes in maintenance regulations and their potential impact on the industry [6]