Core Viewpoint - The penetration rate of prefabricated buildings in China is still low, indicating significant room for optimization and growth in the industry [1][12]. Industry Development - Prefabricated construction, which involves manufacturing building components in factories and assembling them on-site, is gaining traction due to policy support [2][3]. - As of 2020, the area of newly started prefabricated buildings in China reached approximately 630 million square meters, a year-on-year increase of 50%, accounting for 20.5% of new construction area [3]. - The Ministry of Housing and Urban-Rural Development aims for prefabricated buildings to constitute 30% of new urban construction by 2025 and 40% by 2030 [3]. Regional Initiatives - Cities like Guangzhou have set ambitious targets, mandating that 100% of residential land sold from 2026 will implement prefabricated construction, with a goal of 80% of new buildings being prefabricated by 2030 [3]. - In Hunan, the newly started prefabricated building area reached 16.25 million square meters in the first three quarters of the year, representing 64.6% of new construction [4]. Market Size and Growth - The market size of the prefabricated construction industry in China has surpassed 1.2 trillion yuan in 2023, with expectations for further growth driven by policy initiatives [5]. - The industry is projected to expand significantly by 2025 as penetration rates continue to rise [5]. Supply Chain and Key Players - The prefabricated construction supply chain includes upstream suppliers of raw materials like cement and steel, midstream modular construction companies, and downstream real estate firms [6]. - Major companies involved in prefabricated construction include China State Construction Technology Group and Shanghai Modern Architectural Design Group, with real estate developers like Vanke and Poly actively engaging in this sector [6][7]. Efficiency and Environmental Impact - Prefabricated buildings can reduce construction time by 30% to 50% and lower energy consumption by 20%, water usage by 63%, and construction waste by 91% [10]. - The construction industry accounts for 45.5% of total energy consumption and 50.9% of carbon emissions in China, highlighting the potential for significant energy savings and emissions reductions through prefabricated construction [9]. Safety and Quality Concerns - Concerns regarding safety and quality remain prevalent among the public, but prefabricated buildings can meet or exceed the safety standards of traditional construction methods [11][12]. - The standardized production of prefabricated components ensures better quality control and structural integrity compared to on-site construction [12]. Challenges and Future Outlook - The prefabricated construction industry faces challenges such as low collaboration efficiency across the supply chain and the need for improved design, production, and construction management [12]. - As technology advances and standardization increases, the long-term costs of prefabricated construction are expected to decrease, making it a more viable option for developers [7][12].