The Zhitong Finance App learned that Zhishang Securities released a research report saying that looking at the performance of the light industry in 24Q2, the performance of household and paper manufacturing in relation to the domestic demand economy was weak, and some high-quality assets in the individual growth stage exceeded their performance. Structural growth mainly focuses on two main lines: domestic products with excellent price-quality ratio, relatively affordable product iteration, and e-commerce operations, such as Baiya shares (003006.SZ); individual stocks that are happy to go overseas, have implemented business models, and can continue to increase their share, such as Bubble Mart (09992). After recent adjustments, looking ahead to the second half of the year: on the one hand, the value of Hakuba's assets with clear bottom margins, such as Sun Paper (002078.SZ) and Yutong Technology (002831.SZ), is prominent; on the other hand, the price still exceeds that of domestic products and happy ones, so we recommend a merit-based layout.

The main views of Zheshang Securities are as follows:

Home: Consumption is sluggish + completion transmission, the industry is still in the process of refining

Retail home: completion pressure is transmitted, waiting for trade-in measures to be boosted. The revenue side showed three major characteristics: 1) transmission of pressure to completion and poor consumption, which generally declined; 2) channel performance was fragmented, and overseas business continued to grow; 3) the pace of retail channel opening was slowing down, and the focus was on optimizing existing stores. Looking at specific stocks: The overall decline in software was narrower than that of customization, the pressure on the high base of custom homes was even greater, and Sophia had a certain amount of excess. Looking ahead to 24H2, the factors of the high base of orders starting in July-August are expected to gradually be digested. At the same time, the country promoted the implementation of consumer subsidy measures for home trade-in from the top down, which substantially boosted household terminal consumption in 23Q4.

Engineered homes: pressure continues, and there are few surpluses

The engineering home/customization business is highly correlated with the boom in the completion cycle. Looking ahead to 24H2, the pressure on the completion side is expected to continue. Orders from leading real estate companies may continue to be pressured, but since '23, leaders such as Jiangshan Oupai have continued to develop non-housing enterprise projects (such as hotels, offices, schools, etc.), and the volume of this type of business is expected to enhance the company's resilience to risks.

Light industry consumption: the pet sector is overly prominent, and Baiya shares continue to be strong

Required consumption: Morning light and bulls show resilience. With the 24H1 reopening, Chenguang Co., Ltd. operated steadily, and Baiya Co., Ltd. performed excessively. The reason why the sector is generally under pressure is mainly due to corporate price reduction promotions due to weak demand. Looking ahead to 24H2, we will continue to focus on recommending high quality growth targets of “sharp rise in volume and price” in the current consumer environment and those assets that can continue to achieve product upgrades based on the comprehensive advantages of product channel brands. The focus is on Baiya shares, followed by Chenguang Co., Ltd., Bull Group, and Dengkang Dental, and focus on Hengan International and Mingyue Lens.

Pets: When the share is gradually being concentrated and the rise of domestic goods progresses

24H1 domestic sales are characterized by the rise of domestic goods and a concentration of shares. Export sales showed a positive contribution from raw materials and exchange rates, and the profitability performance was outstanding. Looking ahead to 24H2, current orders for the export business are stable, leading sales performance is stable, leading domestic sales companies have increasingly clear ideas about brand matrix layout and product matrix adjustment, and the industry pattern is gradually becoming concentrated. They are optimistic about the rise of domestic leaders with R&D and production advantages, and recommend Gaibao Pet, Zhongpong Shares, and Petty Shares.

Export overseas: the US real estate chain is improving, and we prefer individual stocks in the same category as yourself

Export manufacturing: Overseas consumption is still resilient, and the bottom of the US real estate chain is stabilizing. Looking ahead to 24H2, on the one hand, demand is resilient, and the performance of real estate chain-related companies in the process of cutting interest rates is worth looking forward to; on the other hand, the cross-border e-commerce boom for large products in light industry is still high. However, based on comprehensive macroeconomic considerations, exports still focus on grasping individual growth and choosing the best from the best.

Continuously track three directions: 1) High-quality manufacturing stocks: Currently, high-quality manufacturing with leading overseas production capacity layout and long-term increase in share includes Jiayi Shares, Co-Creation Lawn, Jianlin Home Furnishing, etc.; 2) Manufacturing to brand: China manufacturing has outstanding advantages, leading companies rely on product power to achieve manufacturing to brand transformation, driving a continuous increase in share, including Ingenious Home and Haoyang Co., Ltd.; 3) Zhongda cross-border e-commerce: As China's cross-border e-commerce platforms accelerate overseas, there is an urgent need to break through as an important category. Performance may be improving month-on-month, with medium to large cross-border e-commerce service provider card slots Individual stocks include Zhi Ou Technology, Henglin shares, and Lego shares.

Go overseas with pleasure: Spiritual consumption is booming, and trendy products are expanding rapidly around the world

Focus on two directions: 1) China's Trendy Fun begins global expansion: Chaowan brand leader represented by Bubble Mart and Mingchuang Premium Products, seizes the trend of spiritual consumption domestically, breaks out of the logic of independent growth, operates globally, the global influence of products is increasing, and there is plenty of room for growth. 2) Overseas trendy Chinese foundry accelerates growth: Focus on the US thermos cup circuit. The product attributes are shifting from durable goods to repurchased trendy products with high unit prices. The compound growth rate of imports has been above 20% in the past 10 years, driving upstream Chinese foundries such as Jiayi Co., Ltd. and Hals to have full orders, and their performance has exceeded their fulfillment.

Papermaking: Quarterly profit declined slightly month-on-month, leading integrated pulp and paper companies showed resilience

Replay 24Q2: The cost of pulp used in 24Q2 increased month-on-month, and the integrated pulp and paper faucet remained excessive. Slurry prices declined rapidly in July-August. 24Q3 is expected to bottom out, and 24Q4 pulp may resonate. Bulk paper Q2 profits weakened month-on-month, and integrated leaders had surpluses. Capital expenditure for specialty paper has been actively raised, and pulp and paper production capacity investment has been promoted smoothly. Looking forward to 24H1: leading integrated pulp and paper leader with low layout cost support and fine management. We recommend Sun Paper, Huawang Technology, and Xianhe Co., Ltd. and focus on the pace of improvement of Wuzhou Special Paper, Bohui Paper, Nine Dragons Paper, and Shanying International.

Packaging: Combining changes in the landscape with recovery in demand, declining capital expenditure and increasing dividends

Review 24Q2:1) Paper packaging: 3C demand is recovering, and the cigarette pack pattern continues to improve; 2) Plastic packaging: demand for food and drink/daily chemicals has been impacted by white cards, and market competition has intensified, and profit flexibility is expected to be released when oil prices fall back; 3) Metal packaging: Industrial chain integration is gradually progressing, focusing on inflection points in the pattern. From a dividend perspective, capital expenditure has declined and dividends have increased.

Risk warning: Real estate policy implementation falls short of expectations, raw material prices have risen, paper prices have risen less than expected, industry competition has intensified, tariff risks, export demand fluctuations, etc.