Guojin Securities: Looking forward to the implementation of the two-piece can price increase and pay attention to the recovery process of pulp prices

The Zhitong Finance App learned that Guojin Securities released a research report saying that the current boom in the light industry manufacturing sector is showing a divergent trend: the household and papermaking sectors have entered the bottom stage of stabilization; the new tobacco and packaging sectors are showing a steady upward trend; the trendy gaming sector is showing positive signs of an inflection point; while the light industry personal care sector is facing some pressure, and the performance is under slight pressure.

Guojin Securities's main views are as follows:

Household sector

The Central Economic Work Conference continues “boosting consumption and expanding domestic demand” as the main line, and will implement special actions to boost consumption in the future. The Development and Reform Commission proposed to firmly implement a strategy to expand domestic demand. Among them, the direction of stable bulk consumption, trade-in, and green intelligent upgrading related to household needs is beneficial to the restoration of household demand. In terms of export sales, in November, China's furniture export value was -8.83% year-on-year, and the decline narrowed to single digits; Vietnam's furniture export value was +8.59% year-on-year, maintaining a steady upward trend. By region, the scale of China's furniture exports to major Southeast Asian countries has been rising steadily, and is relatively stable to the EU, while its share of exports to the US showed a moderate downward trend. In November, exports to the US/EU/Southeast Asian major countries accounted for 10.23%/14.27%/16.62% respectively. According to CME, the probability that the Federal Reserve will cut interest rates by 25 basis points in January 2026 is 22.1%. It is expected that overseas home demand will continue to recover after the subsequent interest rate cut cycle begins. Looking ahead, domestic sales are still at the bottom of weak demand in the short term, but under the impetus of relevant consumption policies, household demand is expected to recover steadily, and there is no need to be overly pessimistic. It is recommended to select a leader with obvious dividend attributes, refined channel operation, and a first-mover advantage in retail transformation. On the export side, considering that the US has entered a cycle of interest rate cuts, the furniture inventory sales ratio remains excellent, and Chinese furniture exports have begun to expand in multiple regions and channels, the bank believes that external demand has entered a moderate recovery channel. It is recommended to select companies with mature overseas production capacity layout and strong delivery stability.

New types of tobacco

In terms of atomization, according to BAT's 2025 performance forecast, 18 states in the US market have now issued regulations to implement the atomization catalogue, accounting for about 50% of sales through industry tracking channels. Enforcement actions by the US federal and state governments to crack down on illegal vaping products are beginning to bear fruit, supporting improvements in Vuse's sales and revenue. It is expected that as US enforcement continues to be strengthened, the compliance market will continue to expand, which will benefit the recovery of sales of leading compliance brands such as Vuse. On the HNB side, British and American tobacco promotions have increased significantly. On the Polish market, you can buy Hilo appliances and 2 packs of cigarettes for 1 zloty, and HiloPlus and 2 packs of cigarettes for 79 zloty. British American Tobacco is confident in Hilo's excellent product strength. With its excellent product strength and complete marketing channel construction, it is expected that Hilo will continue to expand. As BAT's core supplier in the field of atomization and heated tobacco, cooperation between the two sides continues to deepen, and SMOORE is expected to fully benefit from BAT's acceleration of the smoke-free strategy. Regarding tobacco in the mouth, on December 19, the US FDA announced ON! Plus nicotine bags passed the PMTA review, which means ON! Plus became the second nicotine pouch brand after ZYN to pass PMTA and obtain FDA market access approval. Previously, the FDA launched a pilot project to review the nicotine pouch PMTA to speed up the approval process and strengthen regulatory efficiency to balance regulatory requirements with product compliance and marketing requirements.

Papermaking and packaging

1) Papermaking: As of December 18, the domestic price of coniferous pulp/broadleaf pulp was 5542/4633 yuan/ton, compared to last week, +40/+28 yuan/ton, compared to last week. Box board/corrugated paper/white cardboard paper/double adhesive paper/double copper paper/household paper was quoted at 4081/3425/3488/4218/4643/4975/5993 yuan/ton, compared to last week, +0/-39/+16/-21/+2/+0/+93 yuan/ton, respectively. As of December 11, domestic pulp stocks at mainstream ports were 1.93 million tons, compared to 43,000 tons in the previous period, showing a cumulative drop trend for four consecutive weeks. The profit margins of international pulp mills have narrowed, and they have chosen to shut down production and raise prices in order to improve profit performance. This has led to a tightening of global pulp supply and driving the continuous rise in pulp prices. 2) Packaging: 25 years ago and 11, the zero growth rate of grain, oil, food/drink/tobacco and alcohol/daily necessities/home appliances was 9.9%/1.0%/3.3%/6.5%/14.8%, respectively. The steady recovery in downstream packaging demand is expected to lay a good foundation for packaging companies' performance recovery. In terms of metal packaging, after Orekin's acquisition of COFCO Packaging, the concentration of the domestic two-piece can industry increased dramatically, and overall bargaining power was significantly enhanced. Furthermore, Orekin, Shengxing Packaging, etc. are planning to develop production capacity for two-piece cans overseas, and the domestic two-piece can supply pressure has been reduced to a certain extent. It is expected that after the two-piece can price increase in early '26, it will directly increase the profit margin of metal packaging companies and improve the overall profit level of the industry.

Light industry consumption

1) Light industry personal care: In the context of industry stock competition, segmented demand is clearly driven by demand & brand concentration has increased. From a brand perspective, Douyin's “2025 Top Gold List” in the toothpaste industry shows that Sanhan, Pop Research, and Jun Xiaobai are in the top three toothpaste lists, while brands such as Yunnan Baiyao, Shuke, Baiyun Mountain, Colgate, Haolai, Bai Xi, and Leng Sing Ling are also in the top ten. This list is highly consistent with the characteristics of “efficacy type+high content e-commerce compatibility”. Two layout ideas: ① focus on companies with the ability to drive new products; ② companies with strong offline channel growth logic. 2) AI glasses: The industry is experiencing a critical inflection point in the transformation from “niche geeks” to “mass consumption”. As the number of entrants has increased, the focus of competition has gradually shifted from technical feasibility to “usability” improvement. The industry is in a period of increasing demand. Global smart glasses shipments reached 4.296 million units in 25Q3, +74.1% over the same period last year. Among them, 2.994 million units of audio and audio shooting glasses were shipped, a sharp increase of 287.5% over the previous year; 1.32 million units of AR/VR equipment were shipped, or -23.2% over the same period last year. The focus is on tracking the breakthrough products/volume pace of major manufacturers, focusing on branded lens manufacturing targets bound to high-quality manufacturers, such as Conet Optics.

Play in the tide

The industry is rapidly moving from “IP rapid development” to a new stage of “deep development+going overseas”. Leading Bubble Mart continues the expansion of new Q4 products, launching Baby Molly's Active Winter Guide Series/HiRono Road Log Series, etc., focusing on content marketing such as seasons and IP cores; Bruker marginally strengthened its adult customer base and launched Transformers - Legend Edition - Comic version of Tarn; with the promotion of overseas channels for card tours, an overseas flagship store officially opened in Bangkok, Thailand. The focus is on leading Chaowan Bubble Mart, Bruker, etc., as well as traditional leading companies that are actively transforming IP development, and segmented targets benefiting from the spread of industrial dividends.

Investment advice

Home: We recommend Oupai Home, Sophia, Gujia Home, Mousse Co., Ltd., Zhibang Home, Minhua Holdings, Bull Group, etc. New types of tobacco: We recommend Smore International, China Tobacco Hong Kong, Yingqu Technology, etc. Light industry consumption: Bubble Mart, Chenguang Co., Ltd., Dengkang Dental, Baiya Co., Ltd. Paper packaging: We recommend Yutong Technology, Sun Paper, Yongxin Co., Ltd., Orekin, etc. Going overseas: We recommend Ingenious Home Furnishing, Henglin Co., Ltd., Zhiou Technology, Lego Co., Ltd.

risk factors

Real estate completion and recovery was slower than expected; raw material prices rose sharply; promotion of new products fell short of expectations; and exchange rates fluctuated sharply.