1、Industry size and market prospect

With the high development of the modern city, every day there are a lot of people and goods to transport, the elevator industry become symbol of the degree of modernization, and people's life and work closely together, so people on the elevator performance, beautiful appearance, more and more attention to, on elevator car were decoration inevitably become a trend.

Elevator decoration industry is in the late 80s of the last century with the elevator industry development and the, due to major elevator manufacturers are not producing elevator decoration materials should be customer demand and in the market under the trigger, may not have been seeking outsourcing elevator decoration manufacturers, and gradually formed a new profit growth point, in the provinces of Zhejiang, Jiangsu, Shanghai and other parts of the city appeared the corresponding manufacturers.

Each interface of elevator of a variety of different types from the perspective of appearance and visual art of the elevator floor, walls and ceiling of the decoration is the elevator decoration, including the large commercial and residential, hotels, villas, high-rise office buildings and shopping malls and other places of elevator decoration. Elevator decoration industry market prospect is broad, the potential is huge.

2、Industry Development Foundation

（1）China's urban population and the density increase, the process of urbanization to promote the continuous growth of elevator decoration

In 2010, the central document the CPC Central Committee and the State Council on increase the intensity of urban and rural development further consolidate the basis of agricultural and rural development in a number of opinions "clearly pointed out that the construction of a new socialist countryside and promoting urbanization as to maintain stable and rapid economic development to power for a long time, actively and steadily promote urbanization, improve the urban planning level and the quality of development. At present, we should strengthen the development of medium and small cities and small towns as a key.

According to the 2012 "social blue book" and China's social situation report data released, the 2011 Chinese history first urban population exceeds rural population, urbanization level more than 50%, a total of 51.27 percent of the population lives in the city, which with 85% of the European population and 75% of Americans live in cities still larger gap. "China 2011" report of population development, by 2020 the population will be over 800 million Chinese inland towns.

Urban population were the main factors to influence the demand of the elevator, the urbanization process in which the bulk of the population into the city at the same time, our country need to increase investment to continue to support the construction of the new city, the urban area in the process of construction of housing and infrastructure construction will expand the demand for elevator. At the same time, with the increase of China's urban high-rise buildings, the demand for the growth of the elevator speed will be faster than the growth rate of the newly completed housing construction area. In addition, because of the tension of land resources, the development of high space and underground space has become the new direction of the development of the city. With the gradual increase of urban population, the urban housing industry will continue to develop steadily, the demand for housing will continue to increase the demand for the installation of the elevator will continue to grow. With the increasing demand of the elevator, the demand for the elevator decoration must be expanded at the same time. From a long-term point of view, the new government will be new town of as the next 10 years national important development strategy, expanding domestic demand is the most important impetus, China's urbanization will bring improve labor productivity and urban agglomeration effect, bring public services and infrastructure investment continues to expand, for elevator decoration industry to form a continuous positive.

（2）Construction of affordable housing, stable elevator decoration demand growth

The real estate industry is one of the terminal industries in the elevator decoration industry. 2008 year, by the state macro-control and the impact of the financial crisis, China's real estate market to enter the adjustment period, but also affected the elevator and elevator decoration industry. Since 2010, in order to curb rising prices in some cities, the state of the real estate industry has issued a series of regulatory policies, the main city commercial housing transactions tend to be stable.

While under the influence of policy to regulate and control the real estate. In recent years, commercial housing sales area has a certain degree of decline, but investment in real estate development completed volume sustained growth, the real estate industry, the long-term trend of optimism, is conducive to the continued prosperity of the elevator decoration industry. Also to solve the housing problems of low-income urban population, the relevant government department introduced the construction of affordable housing industrial policy, "Twelfth Five Year Plan" period, the annual new security housing area completed more than 5 million square meters, the protection of housing construction led to the elevator demand of steady growth. 2013 national new construction guarantee for urban housing projects nearly 700 million units, in 2014, the new construction guarantee for urban housing projects more than 600 million units, residential construction of elevator demand will still maintain growth, so as to drive the elevator decoration demand continues to grow.

（3）Increase in public buildings and the development of public transport, stimulating the growth of demand for elevator decoration

Due to the domestic urban public facilities of the quantity, scale and developed country city compared to the larger gap, with the improvement of people's living quality, public facilities of growth rate from the beginning of 2004 has exceeded the growth rate of residential. Urbanization and urban development to promote the construction of urban public facilities. All stadiums, theaters, subways, airports, shopping malls, hotels, office buildings and other public buildings and the construction of the overpass, fast and convenient channel "barrier free access of urban public transport development lead to lift demand increasing year by year. According to the statistics of China Elevator Association, the country has more than 70 cities are or plan to build the subway; for the realization of "barrier free access, a large number of public places, the need for the installation of escalators and passenger conveyors; countries to promote economic development to develop investment plans, about 15000 billion yuan used in railways, highways, airports, and water conservancy and other major infrastructure construction including, continuous effectively stimulated the elevator, especially the demand for public transit escalator, and thus promote the elevator decoration rising demand.

（二）And the relationship between the upstream and downstream industries

1、Upstream industry

Elevator decoration industries and enterprises in the procurement of raw materials mainly stainless steel plate, change package for ceiling, elevator on three sides of the hanging wall decoration, the anterior wall of the reform package, the car door, hall door package, package, such as the production of small door modified; in addition, other raw materials procurement have marble floors. Therefore, the elevator decoration industry is the main upstream industry for iron and steel and nonferrous metals (5047.33178.520,3.67%) industry. The quality of the stainless steel plate has a certain influence on the normal operation of the elevator, and the price fluctuation of the stainless steel plate will also affect the production cost to a certain extent.

2、Downstream industry

Elevator decoration industry enterprises in the downstream industry is mainly for the elevator engineering enterprises, elevator engineering companies usually have the double functions of elevator agent distribution and elevator installation. Domestic and foreign brands elevator machine manufacturers for production technology and cost control, the discretionary sales and installation, by the elevator engineering enterprise is responsible for the customer whole elevator installation, and structure of the elevator decoration usually by external professional elevator decoration enterprises responsible.

（三）Basic risk characteristics of the industry

1、Terminal real estate market regulation and control of the risk

Provide elevator decoration service elevator decoration industry service object for the large domestic commercial housing, shopping malls, hotels and other buildings and facilities, the operation business development and the terminal to the real estate market regulation and control policy of the association. In recent years, prices have been huge, for the control of speculative real estate demand, curb excessive growth in housing prices, the state issued a series of policies on the real estate market regulation, to suppress speculative demand. Although broader coverage of the elevator decoration services. However, once the real estate market tight control of the situation, in the short term will on the development of the industry and the business produced certain influence.

2、Industry standards lack of risk

Elevator decoration industry development time is short, is derived from the emerging industry, at present in addition to and elevator machine production and parts related products there is a certain standard, other related quality standards and testing system has yet to be fully established. In the future market, the industry is in the process of expanding, possibly due to the industry standard due to the lack and the elevator decoration related products and services are although different, but quality is uneven, the lack of objective evaluation and testing standards. This may also directly lead to the industry in the "low price, low quality," the prevalence of the impact of consumer awareness and evaluation of the entire industry, so as to bring some adverse effects on enterprise management.

3、Risk of bad competition

Because of China's elevator decoration industry development time is short, generally small scale enterprises, in the low-end market exists with Jerry, loaning, low price bidding, such as non-standard competition means contract business phenomenon, and the presence of the qualification of the main body of market does not regulate the, and industry enterprises have no relevant qualification requirements; market main body operating behavior was not standardized, to the development of the industry caused by adverse effects, industry self-regulation needs to be further improved.

4、Collection and settlement risk

The architectural decoration industry engineering settlement more special, so under normal circumstances will form a long aging of accounts receivable, along with the enterprise scale unceasing expansion of accounts receivable will remain at a high level, if poor collection or project commissioned the financial status of deterioration may bring the risk of bad and doubtful debts to the company.

（四）Favorable factors and unfavorable factors affecting the industry

（1）Favorable factors

①National industrial policy to promote the overall healthy development of the terminal industry, to further promote the elevator decoration needs

New urbanization as the next 10 years national important development strategy, expanding domestic demand is the most important impetus, will bring the agglomeration effect of urban labor productivity and improved, resulting in the continued expansion of public services and infrastructure investment, the government of affordable housing continue to increase investment, for the elevator decoration industry formed continuous positive.

②Professional talent team continues to expand

With the elevator decoration industry to gradually improve the professional and technical requirements, after years of development, technical personnel have been mature, professional quality in practice has been continuously improved. By gradually introducing advanced equipment, absorption and digestion, which will promote the progress and development of the entire industry. At the same time, with the development and growth of the industry, the elevator decoration industry professional management, sales personnel will also be expanded.

（2）Unfavorable factors

①Small and medium enterprises, the ability to resist risk is poor

Raw materials in the composition of the elevator decoration enterprise production cost accounts for a considerable proportion, industry leadership class manufacturers prices higher metastatic capability, but small and medium enterprises due to poor market position, faced with the raw material price fluctuations greater risk. In recent years, steel and other raw materials prices fluctuate greatly, resulting in adverse effects on the cost of the company's products. With the economic recovery, steel and other raw materials prices will rise accordingly, will lead to rising costs of the company's products, thereby affecting the company's benefits. At the same time, due to the small size of small and medium-sized enterprises, technology innovation ability is weak, can not enhance the competitiveness of the product added value, resulting in the low-end products, there is a fierce price competition.

②Fierce competition in the market, the industry needs to be further integrated

In recent years, due to the rapid rise of the elevator decoration market demand, resulting in many small scale, lack of core competitiveness of enterprises influx, resulting in disorderly competition in the market in a short period of time, to a price war as the main mode of disorderly competition restricting the elevator decoration industry healthy development. Due to the lack of long-term strategic planning, a lot of enterprises in the development process tend to neglect the management and control of the supply chain, and focus on the simple price competition, which makes these enterprises did not form a virtuous cycle of research and development, production and sales. Price war not only disturb the market competition order, often makes enterprises fall into the dilemma of "low price" strategy, has always been unable to obtain enough profit to investment in research and development, to further deepen the enterprise technical disadvantage.