Considering the current complex and changing economic situation at home and abroad, 2025 relies on relevant policy signals to select expected policy benefits, recommend new types of tobacco > two-wheelers = domestic households, and focus on emerging domestic goods, export & overseas, and papermaking sectors.
The Zhitong Finance App learned that Guojin Securities released a research report saying that looking ahead to the light industry in 2025, the headwind period of the new tobacco policy is completely over, and the industry is still in the early stages of development. The corresponding catalyst is expected to continue throughout 2025. In terms of domestic furniture sales, the effects of the consumer subsidy policy have indeed been evident since 24Q3. The performance of some companies is expected to stabilize from 24Q4. On this basis, high-quality home furnishing companies still have the characteristics of low valuation+high dividends, and the cost performance ratio is outstanding. Considering the current complex and changing economic situation at home and abroad, 2025 relies on relevant policy signals to select expected policy benefits, recommend new types of tobacco > two-wheelers = domestic households, and focus on emerging domestic goods, export & overseas, and papermaking sectors.
The main views of Guojin Securities are as follows:
New tobacco sector: The trend of stricter overseas regulations is showing, and the European and American compliant e-cigarette market is expected to expand.
Considering Trump's previous claim that he will “save” flavored e-cigarettes, if subsequent flavor restrictions are relaxed and enforcement of illegal products is strengthened, based on certain assumptions, according to estimates, it is expected that the mid-term market size of legal exchangeable e-cigarettes in the US is expected to increase by 63%-299% compared to 2023. Overall, the headwind period of the new tobacco policy is coming to an end, and the industry is still in the early stages of development. In the future, there will still be dividends in increasing product penetration. The corresponding catalysts are expected to continue throughout 2025. The proposal focuses on Smore International (06969), which is deeply tied to overseas tobacco leaders and is expected to significantly benefit from the expansion of overseas compliance markets, and its new business contributions are worth looking forward to.
Two-wheeler sector: Benefiting from the subsidy policy+implementation of the new national standard, the industry has three major growth drivers in 2025.
1) Channel replenishment is expected to be realized centrally on 25H1 after the bid exchange; 2) leading channels will accelerate expansion and new national standard products will rapidly push new forces to drive industry concentration; 3) The trade-in policy is expected to further boost 25H1 demand. Overall, there is a high degree of certainty about recovering the 25H1 performance in the sector, and seizing the layout opportunities of traditional leaders and new dark horse enterprises.
Domestic household sales sector: In the short term, the effects of the consumer subsidy policy have been evident since 24Q3. The performance of some companies is expected to stabilize from 24Q4. On this basis, high-quality home furnishing companies still have the characteristics of undervaluation+high dividends, and the cost performance ratio is outstanding. Also, in the medium to long term, against the backdrop of industry traffic growth under pressure, the requirements for enterprise category expansion+channel renewal capacity will increase significantly. At the same time, the subsidy policy will further raise the competitive threshold. The industry is expected to accelerate share concentration, and the valuation center of high-quality enterprises is expected to increase.
In terms of layout pace, considering the subsidy policy or continuing to combine subsequent renovation volume estimates and base factors, fundamentals may be expected to improve quarterly after 25Q2, and seize opportunities for related fundamental improvements. Furthermore, the focus on 24Q4 consumer subsidy orders was reflected on the 25Q1 corporate reporting side, driving the sector's short-term valuation to repair the market. Overall, it is recommended to focus on leading high-quality domestic home furnishing companies that account for relatively high C-side revenue and continue to achieve retail capacity: Gujia Home (603816.SH), Sophia (002572.SZ), Zhibang Home (603801.SH), Minhua Holdings (01999), and Bull Group (603195.SH).
Emerging domestic goods sector (personal care, pets, etc.): In 2024, emerging domestic goods will work together in terms of products and channels, and brand potential and share will continue to increase.
Looking ahead, emerging domestic products such as pets and personal care still have opportunities for category innovation and growth. It is recommended to focus on structural investment opportunities brought by the pace of performance delivery exceeding expectations from a year-round perspective. It is recommended to focus on Gaibao Pet (301498.SZ), Zhongchong (002891.SZ), Baiya Co., Ltd. (003006.SZ), and Mingchuang Premium (09869).
Export & Offshore Sector: Looking ahead to 2025, the sector's risks and opportunities coexist.
Guojin Securities said that, on the one hand, the effects of current US interest rate cuts on real estate sales are gradually showing. China's furniture exports are expected to benefit from a recovery in US real estate sales in the future. On the other hand, tariff risks have not yet been implemented, and the overseas inventory replenishment cycle is basically over based on multi-dimensional judgments. In this context, export companies with alpha are selected. The degree of technology, industry and trade integration (or overseas production capacity layout capacity) and degree of branding will be important dimensions for selecting export investment targets. It is recommended to focus on European Technology (301376.SZ), Ingenious Home (301061.SZ), Henglin Co., Ltd. (603661.SH), Lego shares (300729.SZ), etc.
Papermaking sector: The prosperity of the sector is strongly correlated with overall social zero consumption. The key to future profit recovery flexibility lies in domestic demand consumption support and changes in the supply of various paper segments.
Currently, paper products are still in the production period. In anticipation of a month-on-month improvement in demand, the overall profit of the sector is expected to recover steadily in 25 years. Subsequent track segmentation pattern differences determine the profit center and subsequent price flexibility. Specialty paper companies with strong cost control capabilities, forward-looking wood pulp storage capacity, and leading layout in thin specialty paper segments (such as decorative base paper, glassine paper, heat transfer paper, etc.) are expected to have stronger profitability. Furthermore, some leading companies are under too much financial pressure, and are concerned about opportunities to improve the subsequent culture/white card pattern. The proposal focuses on Huawang Technology (605377.SH), Sun Paper (002078.SZ), Xianhe Co., Ltd. (603733.SH), etc.
Risk warning
The effects of the implementation of the policy are low, raw material prices have risen sharply, exchange rates have fluctuated greatly, major commercial and commercial customers have been lost, trade frictions have increased, and related estimates are highly biased.
