Benchmark Companies’ Anticipated Losses Reveal Industry Dilemmas: How Can Guangxi’s Man-Made Board Industry Navigate Economic Cycles?

2026-01-21 Source: Forest Donkey

On January 16, Guangxi Fenglin Group released its earnings forecast: It is expected that the net profit attributable to shareholders of the listed company for the year 2025 will range from -100 million yuan to -148 million yuan, representing a decrease of between 28.0144 million yuan and an increase of 19.9856 million yuan compared to the same period last year, with a year-on-year change ranging from -23.35% to 16.66%. Excluding non-recurring gains and losses, the net profit attributable to shareholders of the listed company is expected to decrease by 22.7026 million yuan to an increase of 25.2974 million yuan, with a year-on-year change ranging from -18.12% to 20.19%.

The announcement pointed out that the primary reason for the projected loss in this period is the ongoing adjustment in the domestic real estate market, which has led to weak demand in downstream sectors such as interior decoration and furniture, putting downward pressure on sales of man-made board products. In addition, the release of newly added production capacity within the industry has intensified the imbalance between supply and demand, resulting in a decline in both the volume and selling prices of the company’s key products. To respond to these market changes, the company has adjusted its production schedule and increased downtime, leading to a year-on-year rise in losses due to shutdowns.

Looking at the preliminary loss forecast in the annual report of benchmark board manufacturer Fenglin Group, and correlating it with the operational difficulties faced by several other large board manufacturers, it’s clear that this earnings outlook is not an isolated financial event—it’s more like a prism, refracting the widespread challenges confronting the artificial board industry in Guangxi.

As an important foundational building material, the fate of engineered wood products is deeply intertwined with the real estate and furniture manufacturing industries.

Currently, the real estate market is undergoing a deep adjustment. Real estate investment has declined by 10% year-on-year, and the number of newly started projects has also decreased compared to the previous year. As a result, demand for man-made boards in the construction and renovation sectors has significantly dropped. Meanwhile, influenced by the broader macroeconomic environment, consumer purchasing power and confidence remain to be restored. Consequently, the furniture manufacturing industry is also facing weak market demand, which has led to a reduction in its procurement of man-made boards.

This “chill” originating from consumer-facing (C-end) demand is spreading upstream along the industrial chain, directly leading to a decline in orders for engineered wood panel companies and a simultaneous drop in both product sales volume and prices. To manage inventory levels, Fenglin Group has been forced to increase downtime, resulting in higher year-on-year losses due to these shutdowns—a clear reflection of weak demand.

In stark contrast to the sluggish demand, production costs have been rising rigidly. As an important base for the engineered wood panel and pulp industries, Guangxi has seen a surge of pulp companies flocking to the region in recent years—nearly 80% or more of new production capacity has concentrated here. With such robust development momentum, there is sustained demand for raw materials like eucalyptus timber, driving up their prices.

Eucalyptus wood With prices remaining stubbornly high, manufacturers of man-made boards are facing tremendous pressure on their production costs. Meanwhile, as product sales prices struggle to rise—or even decline—due to intense competition, the already slim profit margins are being severely squeezed.

Even more serious is the structural contradiction within the industry itself. In its announcement, Fenglin Group also pointed out that “the release of newly added production capacity in the industry has intensified the contradiction between oversupply and demand.” Despite the industry’s current difficulties, it continues to attract capital interest, driving ongoing capacity expansion and the continuous introduction of new production capacity. This has led to an oversupply situation in the market, where companies, in their relentless pursuit of a limited market share, often find themselves locked in price wars—further depressing the industry’s overall profitability and plunging it into a vicious cycle of “increased output without improved efficiency.”

Clearly, Fenglin Group’s predicament is not an isolated case—it mirrors the survival reality faced by the entire traditional resource-processing manufacturing sector, which is being squeezed from multiple angles: shifting demand, rising costs, and overcapacity. A horizontal comparison with other publicly listed companies in the same industry reveals that all are actively seeking ways to break the deadlock—some are extending their industrial chains, while others are exploring new growth areas. The industry as a whole stands at a crossroads of transformation.

In any case, the overall recovery of the engineered wood panel industry still fundamentally depends on the cyclical rebound of the macroeconomy—particularly the stabilization and reversal of the real estate market and the restoration of consumer confidence. Judging from the current situation, it will still take time for market confidence to fully recover and for the industry to see a fundamental improvement.

Therefore, from any perspective, this year—as it has been over the past two years—will not be a good one for the panelboard industry. But as the saying goes, “No matter how cold the winter may be, spring will always come.”

For Guangxi’s artificial board industry, “staying alive” is undoubtedly the most important and realistic choice right now.

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