According to the Zhito Finance APP, Sinolink released a research report stating that looking forward to 2025, with policy support, the supply and demand fundamentals of the light industry are expected to improve. Considering the current complex and changeable domestic and international economic situation, leveraging related policy signals in 2025, selecting beneficiaries of expected policies, and combining relevant indicators of industry development maturity (development stage, penetration rate, concentration, etc.), comprehensively selected opportunities in the layout of the light industry sub-sectors for 2025, recommending new tobacco > motorcycles = domestic furniture, while focusing on emerging domestic products, exports & overseas expansion, and the papermaking sector.

Sinolink Securities' main points are as follows:

The new tobacco sector: The trend of stricter overseas regulations is emerging, and the European and American compliant e-cigarette market is expected to expand.

Considering Trump's previous claim that he would "save" flavored e-cigarettes, if subsequent flavor restrictions are relaxed and the enforcement strength against illegal products is increased, under certain assumptions and calculations, it is estimated that the mid-term market scale of legally replaceable e-cigarettes in the USA is expected to grow by 63%-299% compared to 2023. Overall, the adverse period for new tobacco policies is completely coming to an end, and the industry is still in the early stages of development, with future product penetration rate improvements expected to bring benefits, which may continue throughout 2025.

It is recommended to focus on Smoore Intl (06969), which is deeply bound to overseas tobacco leaders and is likely to significantly benefit from the expansion of overseas compliant markets, and its contributions from new businesses are worth looking forward to.

The bicycles sector: Benefiting from subsidy policies + the implementation of new national standards, the industry has three major growth drivers in 2025.

1) After the rebranding, channel replenishment is expected to be concentrated in the first half of 2025.

2) Leading channels are accelerating expansion, and the rapid introduction of new products under the new national standards drives industry concentration.

3) The trade-in policy is expected to further boost demand in the first half of 2025. Overall, the sector's performance recovery in the first half of 2025 is highly certain, seizing opportunities from traditional leaders and new powerful emerging companies.

Domestic furniture sector: Starting from the fourth quarter of 2024, some companies are expected to stabilize their performance, and the fundamentals may see quarterly improvements after the second quarter of 2025.

In the short term, since the third quarter of 2024, the effects of consumer subsidy policies have indeed become evident. From the fourth quarter of 2024, some companies are expected to stabilize their performance. On this basis, high-quality furniture companies still possess characteristics of low valuation and high dividends, highlighting their cost-effectiveness.

From a medium to long-term perspective, under the background of pressure on industry traffic growth, the requirements for enterprises' category expansion and channel extension capabilities will significantly increase. At the same time, subsidy policies will further raise the competitive threshold, and the industry is expected to experience accelerated concentration of market share, with the valuation center of high-quality enterprises likely to rise.

In terms of layout rhythm, considering that subsidy policies may continue alongside subsequent renovation volume calculations and base factors, fundamentals may see quarterly improvements after the second quarter of 2025, seizing opportunities for related fundamental improvements. Additionally, pay attention to consumer subsidy orders concentrating in the fourth quarter of 2024, which could reflect in companies' reports in the first quarter of 2025, driving short-term valuation recovery in the sector.

Overall, it is recommended to focus on high-quality domestic furniture leading companies with a high proportion of C-end income and continuously realized retail capabilities: jason furniture (603816.SH), suofeiya home collection (002572.SZ), zbom home collection (603810.SH), man wah hldgs (01999), gongniu group (603195.SH), etc.

Emerging national goods sector (personal care, pet, etc.): In 2024, the emerging national goods will jointly strive in terms of products and channels, continuously increasing brand momentum and market share.

Looking ahead, emerging domestic goods in sectors such as pets and personal care still have opportunities for category innovation and growth. Throughout the year, pay attention to the performance delivery rhythm that exceeds expectations, bringing structural investment opportunities, and particularly focus on companies such as guaibao pet (301498.SZ), yantai china pet foods (002891.SZ), chongqing baiya sanitary products (003006.SZ), and miniso (09896).

Export & Overseas sectors: Looking forward to 2025, the sector presents both risks and opportunities.

On one hand, the effect of the current interest rate cuts in the usa on real estate sales is gradually becoming apparent, and in the future, china's furniture exports are expected to benefit from the rebound in usa real estate sales. On the other hand, tariff risks have not yet been resolved, and according to our multi-dimensional assessment, the overseas replenishment cycle has basically ended. In this context, it is advisable to select export companies with alpha capabilities; the degree of integration of technology, trade, and manufacturing (or overseas production capacity layout capability) and branding will be important dimensions for screening export investment symbols, particularly focusing on zhiou technology (301376.SZ), jiangxin home (301061.SZ), henglin home furnishings (603661.SH), and loctek ergonomic technology corp. (300729.SZ).

Paper sector: The prosperity of the sector is closely related to overall social retail consumption. The key to future profitability recovery lies in domestic consumption support and changes in the supply of various subcategories of paper.

Currently, paper types are still in the production period, and with expectations of improved demand on a month-on-month basis, overall sector profitability is expected to recover steadily in 2025. The subsequent differentiation in sub-sector landscapes will determine the profit center per ton and the elasticity of subsequent prices. Special paper companies with strong cost control capabilities, forward-looking wood pulp reserve capabilities, and leading layouts in specific sub-sectors (such as decorative base paper, glassine paper, thermal transfer paper, etc.) are expected to have stronger profitability. In addition, some leading companies face significant funding pressures, and attention should be paid to opportunities for improvement in cultural/white card paper sectors. It is recommended to focus on Hangzhou Huawang New Material Technology (605377.SH), Shandong Sun Paper (002078.SZ), Xianhe Co.,Ltd. (603733.SH), and others.

Risk warning: The effect of policy implementation may be lower than expected, raw material prices may rise sharply, exchange rates may fluctuate significantly, major clients of OEM businesses may be lost, trade frictions may increase, and relevant calculations may vary widely.