Analysis of the Reasons for the Continuous Decline of Dongpeng Holdings' Unglazed Tile Business and Its Future Outlook

Based on the collected data, I will systematically analyze the reasons for the continuous decline of Dongpeng Holdings’ unglazed tile business and its future outlook.

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According to the public financial data of Dongpeng Holdings, the unglazed tile business has shown a trend of continuous and significant shrinkage:

Time Period	Unglazed Tile Revenue (Hundred Million Yuan)	YoY Change	Proportion of Ceramic Tile Business	Glazed Tile Proportion
2023	2.90	-31.93%	3.73%	80.94%
H1 2025	0.28	-61.32%	~1.13%	~98.7%

From the trend perspective, the unglazed tile business has shrunk from an important revenue source in the early days to a nearly negligible position [1][2].

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Unglazed tiles (mainly polished tiles) and glazed tiles (glazed polished tiles, antique tiles, etc.) have fundamental differences in product characteristics:

• Pattern Expressiveness
  : Polished tiles use a uniform material distribution process, resulting in limited pattern varieties and repetitive textures; glazed tiles can achieve rich and varied texture patterns through inkjet printing technology, with extremely high simulation accuracy, and can perfectly replicate the effects of natural materials such as marble and wood grain [3][4]
• Aesthetic Gap
  : Glazed tiles feature vibrant colors and natural textures, which can meet consumers’ pursuit of personalized and aesthetic decoration; polished tiles have a relatively monotonous appearance, making it difficult to meet the aesthetic needs of contemporary home furnishings [4]
• Light Pollution Issue
  : The light pollution caused by the high glossiness of polished tile surfaces has received increasing attention, while glazed tiles can achieve various gloss effects, including matte finishes that are more in line with health concepts [4]

China’s ceramic tile industry has experienced profound changes in product structure:

• Capacity Structure Changes
  : According to industry data, from 2017 to 2021, China’s annual output of ceramic tiles decreased from 10.15 billion square meters to 8.17 billion square meters, but the proportion of glazed tiles continued to increase, and the capacity of unglazed tiles was gradually replaced [5]
• Driven by Technological Breakthroughs
  : After the breakthrough in domestic press technology in 2017, new categories such as large-format tiles and sintered stone developed rapidly. These products are basically glazed products, which further squeezed the market space of unglazed tiles [5]
• Internal Structural Changes of Dongpeng Holdings
  : From 2014 to 2022, the proportion of glazed tiles in Dongpeng Holdings’ revenue increased from 46.40% to 76.39%, while the proportion of unglazed tiles decreased from 38.54% to 6.39% [5]

• Shrinkage of the New Housing Market
  : In the first half of 2025, national real estate development investment decreased by 11.2% year-on-year, and the construction, new start, and completion areas of housing decreased by 9.1%, 20.0%, and 14.8% year-on-year respectively [2]
• Characteristics of the Stock Market
  : The number of second-hand housing transactions in 30 key cities increased by 12%, while that of new housing only increased by 2%. The demand for tiles in second-hand housing decoration is mainly retail, and consumers pay more attention to the appearance and quality of products [2]
• Increased Penetration of Hardcover Housing
  : The proportion of demand from the B-end (business clients) has increased, and glazed tiles are more favored by real estate developers in centralized procurement [5]

Dongpeng Holdings has implemented obvious focused adjustments in its product strategy:

• Resource Tilt Toward High-Gross-Margin Products
  : The gross profit margin of glazed tiles is approximately 31.67%, which is equivalent to that of unglazed tiles, but the glazed tile market has larger space and stronger growth potential [1]
• Active Contraction of Low-Efficiency Businesses
  : The company adopts a steady development strategy, actively controls the undertaking of low-quality projects, and unglazed tiles, as traditional products, have been gradually marginalized [2]
• High-End Transformation
  : The company launched the DPI CASA luxury brand strategy and acquired Lishi Sintered Stone to lay out the high-end track, all of which point to the glazed tile field [2][6]

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1. Counter-Trend Growth in Retail Channels
   : In the first half of 2025, the revenue from the large retail channel for ceramic tiles increased by 5.94% year-on-year, indicating that the company still has competitiveness in the C-end (consumer market) [1]
2. Accelerated Penetration of High-Value Products
   : The revenue of high-value products increased by 19.51% year-on-year, and the company empowers dealers through national subsidy policies (covering more than 260 prefecture-level cities) [2]
3. Significant Improvement in Cash Flow
   : The net cash flow generated from operating activities was 4.37 hundred million yuan, with a year-on-year increase of 92.99%, reflecting improved operating quality [1]
4. Stable Leading Position in South China
   : Revenue in South China increased by 10.66% year-on-year, and the company’s market share in its advantageous region has been further consolidated [1]

1. Overall Pressure on the Industry
   : The building ceramic industry still faces multiple challenges such as market demand, dual-carbon energy consumption policies, and cross-border competition [2]
2. Intensified Price Competition
   : Small and medium-sized enterprises without brand, channel, or technological advantages have been eliminated from the industry, but competition among leading enterprises has also become increasingly fierce [2]
3. Dependence on a Single Business
   : The ceramic tile business still accounts for more than 80% of total revenue. Once the overall demand for ceramic tiles weakens, it will directly affect the company’s performance [6]
4. Unglazed Tile Business Approaching Zero
   : At the current decline rate, the unglazed tile business may soon drop to an extremely low level. Although its impact on overall revenue is limited, it means the complete shrinkage of the stock business

Dongpeng Holdings is seeking breakthroughs through the following paths:

Strategic Direction	Specific Measures	Expected Effects
Channel Optimization	Deepen retail and whole-home decoration channels, with Q1 retail revenue increasing by 10.19% year-on-year	Enhance C-end premium capability
High-End Development	DPI CASA luxury brand, IW brand upgrade, acquisition of Lishi Sintered Stone	Capture high-end market share
Green Transformation	Positioning as “Low-Carbon Dongpeng, Pioneer of Green Construction”, 1+N green construction solutions	Align with policy directions
Digital Empowerment	Improve supply chain collaboration efficiency, optimize product quality	Reduce costs and increase efficiency

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:

1. Product Level
   : The possibility of a stop to the decline of unglazed tiles is low. The trend of consumption upgrade is irreversible, and the advantages of glazed tiles in aesthetics, functionality, and personalization will continue to suppress the market demand for unglazed tiles
2. Company Level
   : Dongpeng Holdings has actively shifted resources from unglazed tiles to glazed tiles and high-end product lines. The shrinkage of the unglazed tile business is the result of a strategic choice rather than a passive failure
3. Financial Impact
   : As the proportion of unglazed tile revenue has dropped to an extremely low level (approximately 1%), its continuous decline has a very limited impact on the overall performance of Dongpeng Holdings

: The continuous decline of Dongpeng Holdings’ unglazed tile business is the result of the combined effects of , and the possibility of a stop to the decline in the future is low. However, given that the volume of this business is already very small, its negative impact on the company’s overall development will continue to weaken. The company should focus on the high-end and channel transformation of its core glazed tile business to cope with the challenges of overall industry demand pressure.

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[1] Dongpeng Holdings 2025 Mid-Year Report Review: Ceramic Tile Retail Channel Grows Against the Trend (Soochow Securities)
[2] 2025 Semi-Annual Report of Guangdong Dongpeng Holdings Co., Ltd.
[3] Research Report on the Development Status and Investment Trend of China’s Ceramic Tile Industry (GuanYan TianXia)
[4] Sanitary Ware Main Material Purchase: Fully Glazed Tiles Become a New Trend in Ceramic Tiles (Phoenix Net Home)
[5] Research Report on the Building Ceramic Industry (Bank of China Securities)
[6] Net Profit Halved, High-End Breakout May Falter, Dongpeng Holdings “Living on Its Past Laurels” (China Real Estate Net)