Good News on Listing | Frost & Sullivan Assists Midea Steel Structure Building Systems (Shanghai) Co., Ltd. to Successfully List in Hong Kong (2671.HK)

Merrill Lynch Steel Structure Buildings Systems (Shanghai) Co., Ltd. (hereinafter referred to as 'Merrill Lynch Shares') successfully listed on December 30, 2025. The company plans to issue 2,460 million H shares, of which 90% will be international offerings and 10% will be Hong Kong offerings. The maximum issue price per share is HK$9.16, and the net proceeds are expected to be approximately HK$22.5 million.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), facilitating communication between the issuer and the Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Exchange.

Frost & Sullivan has always been a leader in helping companies go public in Hong Kong. According to LiveReport's big data, from January to December 2025, and over the past 36 months, Frost & Sullivan provided listing industry advisory services for 83 (accounting for 72%) and 180 (accounting for 71%) Hong Kong-listed IPOs, ranking first in terms of number. It has a wealth of industry experience and communication skills with regulatory authorities, exchanges, investment and financing institutions, and various related organizations.

• The company is one of the first batch of high-tech enterprises in the industry;

   

• The company has been rated as one of the 'Top 10 Enterprises in the National Metal Maintenance System Industry' by China Iron & Steel Group Corporation;

   

• The company has been rated as an 'Enterprise Abiding by Contracts and Valuing Credit' by the Shanghai Contract Credit Promotion Association for seven consecutive times;

   

• The company is renowned for providing comprehensive prefabricated steel structure building subcontracting services tailored to different project requirements, and is highly recognized in the industry and market;

   

• The company has a unique business model and strong R&D and design capabilities;

   

• The company is committed to promoting continuous innovation in the industrial field of comprehensive prefabricated steel structure buildings, providing safe and efficient services from research and development, design, production, application to all-round project management.

According to the Frost & Sullivan report, in terms of revenue for 2024, the company:

• Ranked third in the industrial sector of prefabricated steel structure buildings in China, with a market share of 3.5%; the market shares of the top two participants are 35.8% and 6.5%, respectively.

According to the construction method, buildings can be roughly divided into two categories: traditional buildings and prefabricated buildings. Traditional buildings mainly rely on on-site construction, require a large amount of manpower, and take a longer time to build; prefabricated buildings, on the other hand, are manufactured in a controlled factory environment in advance and then transported to the site for assembly. Calculated by floor area, the penetration rate of prefabricated buildings in the overall construction field has increased from 20.0% in 2020 to 29.3% in 2024.

Prefabricated buildings can be further divided according to the materials used into: prefabricated steel structures, prefabricated concrete structures, and other categories (including wood structures, etc.). Prefabricated steel structure buildings use steel as the main load-bearing material, with components prefabricated in the factory and quickly installed on-site. Their main features include high strength, light self-weight (about 30% to 50% lighter than PC structures), the ability to design large-span spaces, short construction periods, easy installation, excellent durability, and 100% recyclability, which aligns with green building principles. They are widely used in industrial, commercial, public, and agricultural buildings. Prefabricated concrete structure buildings use concrete as the main load-bearing material, with components prefabricated in the factory and then hoisted and connected on-site. Their features include excellent fire and seismic resistance, and are widely used in residential buildings and public infrastructure.

In terms of market size, the total revenue of China's prefabricated building market increased from RMB 448.5 billion in 2020 to RMB 589.3 billion in 2024, with a compound annual growth rate of 7.1%. Driven by national policies and local government planning, the market is expected to further expand from RMB 509.9 billion in 2025 to RMB 707 billion in 2029, with a compound annual growth rate of 4.6% during this period. Compared to developed markets such as the United States and Europe, where prefabricated building penetration rates are already high, China is still in its early stages of development, with significant growth potential.

Prefabricated steel structure buildings refer to a construction system that uses steel as the main load-bearing material, with components prefabricated in factories and then transported to the site for assembly. The system typically includes main structures (columns, beams), secondary structures (purlins, supports), enclosure systems, and accessories (door and window frames, fans, insulation materials, and environmental protection equipment). Enterprises with the capability to deliver all the above systems simultaneously have a strong competitive advantage in this field.

In terms of market penetration rate, the development of prefabricated steel structure buildings in China is still in an early stage. In 2024, calculated based on the completed construction area, the penetration rate was 14.7%, far lower than that of major developed countries such as the United States (about 50%) and Japan (about 40%). Among various types of buildings, the penetration rate in public buildings is the highest (45.3% in 2024), followed by industrial buildings with the fastest growth (rising from 30.9% in 2020 to 35.5% in 2024), and it is expected that by 2029, the penetration rate will further rise to 48.5%.

In terms of market scale, the total revenue of China's prefabricated steel structure building market increased from RMB 335.2 billion in 2020 to RMB 441.3 billion in 2024, with a compound annual growth rate of 7.1%. Against the backdrop of the development of new quality productivity and green sustainable development strategies, PS buildings are expected to further expand from RMB 448.8 billion in 2025 to RMB 551.5 billion in 2029, with a compound annual growth rate of 5.3% during this period.

Industrial construction accounts for the largest market share and has the fastest growth rate when divided by building type. In 2024, the market size of industrial construction sub-sectors was RMB 223 billion, accounting for 50.7% of the total prefabricated steel structure construction market. The compound annual growth rate from 2020 to 2024 was as high as 13.0%. In the future, although demand for residential, public, and commercial buildings will gradually slow down due to market saturation, the rapid development of industries such as new energy and advanced manufacturing will continue to drive industrial construction demand. It is expected that from 2025 to 2029, the industrial construction sector will continue to lead with a compound annual growth rate of 9.4%, becoming the core driving force for market growth.

In the field of industrial buildings, according to the project execution model, the market can be divided into three categories: comprehensive prefabricated steel structure building subcontracting projects, traditional construction projects, and general contracting projects. Among them, comprehensive prefabricated steel structure building subcontracting projects with in-depth design optimization capabilities have grown the fastest, with their market scale increasing from RMB 15.9 billion in 2020 to RMB 27.9 billion in 2024, a compound annual growth rate of 15.2%. It is expected that from 2025 to 2029, the market will continue to expand at a compound annual growth rate of 14.0%, higher than other project types.

Prefabricated steel structure buildings becauseWhole life cycle energy efficiencyAdvantages such as high strength, convenient installation, optimal space utilization, fast construction speed, 100% recyclability of materials, and high industrialization level have made it an ideal construction solution for factory buildings, warehouses, agricultural storage facilities, shopping malls, supermarkets, and other construction categories in key industries including manufacturing, warehousing logistics, agriculture, and commerce. The continuous development of downstream manufacturing (especially in fields such as new energy and food and beverages) has also provided a solid growth foundation for the prefabricated steel structure building market.

In 2024, the competitive landscape of comprehensive prefabricated steel structure building subcontracting service providers in the industrial sector showed a highly concentrated trend, with large enterprises dominating the industry. Although the top two companies each accounted for 35.8% and 6.5% of the market share, MELAN Steel Structure ranked third in this field, achieving revenue of 1 billion RMB and occupying a market share of 3.5%.

●Sustainable development requirements

ESG considerationsThe rise of green building initiatives is a key driving factor behind the application of prefabricated steel structure buildings. The Chinese government has introduced several policies to support green building practices, such as the 'Green Building Action Plan', the '14th Five-Year Development Plan for the Construction Industry', and the 'Guiding Opinions on Promoting the Collaborative Development of Intelligent Construction and Building Industrialization'. These policies have promoted the adoption of prefabricated steel structure buildings due to their energy-saving and recyclable characteristics. This policy environment has created favorable market conditions for prefabricated buildings, prompting enterprises to seek green standards that enhance labor efficiency and adopt innovative construction solutions.

●Regional Development and Industrial Transfer

Under policy guidance such as the 'Opinions on Implementing the Employment Priority Strategy to Promote High-Quality and Full Employment', China's industries have shifted to the central and western regions, generating a huge demand for modern factory buildings. From an industry perspective, the continuous industrial transfer to the central and western regions is expected to bring a significant new demand for industrial construction. Prefabricated steel structure buildings meet these regions' needs for rapid construction, cost-effectiveness, and durability, supporting large-scale industrial migration and infrastructure development, which will significantly expand the accessible market for prefabricated steel structure buildings in the industrial sector. From a company perspective, although its existing customers are mainly concentrated in East China, this regional focus does not fully reflect the broader industry demand pattern. As national policies continue to drive industrial migration inland, the resulting growth in construction demand will provide favorable conditions for the company's business expansion into the central and western regions.

●Rising labor costs

The continuously rising labor costs and labor shortages are driving the construction industry towards solutions that save labor. Prefabricated steel structure buildings minimize on-site labor requirements and shorten construction periods. Their modular characteristics ensure high precision and quality, reducing the risk of delays and errors. This efficiency not only reduces costs but also meets the industry's growing demand for productivity and reliability.

●The demand for customized prefabricated steel structure buildings is increasing

Customers are placing increasing emphasis on customized designs that balance cost, functionality, and aesthetics. By optimizing structural layout, personalized appearance, and streamlining manufacturing processes, faster construction speeds and lower costs can be achieved to meet diverse industrial needs.

●Product and Technology Innovation

Advancements in materials, manufacturing processes, and automated assembly technology are continuously enhancing the strength, durability, and construction efficiency of building structures. The application of digital modeling and design software has achieved precise customization, shortened the construction period, and can flexibly adapt to changing industrial application scenarios.

●Growth in overseas market demand

Emerging economies, especially in Southeast Asia, are experiencing an increasing demand for cost-effective and efficient construction solutions. Chinese manufacturers, with their high-quality product exports and expanding global market layout, are actively responding to this demand, driving industry growth and market diversification.

●provideIntegrated system servicescapabilities

In the prefabricated steel structure construction market, providing comprehensive prefabricated steel structure construction subcontracting services is a significant entry barrier. Mature enterprises can offer full-process services from design to installation, and rely on professional teams to ensure structural integrity and meet customer needs. The system includes the main structure, secondary structure, and enclosure system, forming a complex whole. For newcomers, establishing such capabilities requires substantial investment in professional knowledge and partnerships.

●Strict regulatory compliance and qualification requirements

Prefabricated steel structure buildings must comply with strict safety, environmental protection, and structural codes, which requires enterprises to invest heavily in professional knowledge and certification qualifications. Enterprises need to hold specific permits and qualifications, often needing to meet strict technical standards and pass audits. These pose significant challenges for new entrants.

●Brand trust and customer relationships established

Mature enterprises have established a strong reputation through long-term operations and have cultivated deep trust relationships with customers in the fields of commerce, industry, and agricultural construction. New entrants face the challenge of building credibility and customer relationships in a market that places great emphasis on reputation and reliability.