Zhi Tong Cai Jing·2026-01-09 01:33Core Viewpoint - The report from Southwest Securities indicates that the performance of the light industry sector in 2025 is expected to be flat, with cyclical and traditional manufacturing valuations under pressure, while packaging, exports, and personal care sectors show differentiated performance [1] 2025 Sector Review - In 2025, the light industry sector experienced relatively flat performance, with traditional cyclical and manufacturing companies facing valuation pressure. However, the packaging and printing sectors benefited from price increases and cross-industry transformations, leading to better stock performance [1] - The export sector showed some differentiation due to tariff policy disruptions, with companies that have balanced production capacity, strong demand resilience, and low tariff impact performing better [1] - The personal care sector achieved excess returns in the first half of the year but entered a valuation digestion phase in the second half due to intensified competition in e-commerce channels. However, domestic brands are expected to continue their growth trajectory due to product structure optimization and channel expansion [1] 2026 Stock Selection Strategy - The focus will be on undervalued cyclical assets as valuation recovery is anticipated amid changes in the bulk commodity cycle, gradually realizing allocation value [2] - There is a need to balance the valuation and growth potential of new consumption and export sectors, favoring high-growth or low-valuation, high-safety stocks [2] - Four main lines of focus for stock selection include: 1. Gradually emphasizing undervalued cyclical stocks, particularly in the paper sector, which is expected to see price increases driven by "anti-involution" and traditional peak season factors, with net profit per ton likely to recover [2] 2. Export stocks with strong demand resilience and manufacturing capabilities are still considered valuable for allocation, especially those with good growth potential in niche categories and minimal tariff impact [2] 3. Domestic personal care brands are expected to see upward trends in market share and growth potential due to rapid product iteration and competitive pricing [2] 4. New consumption trends in AI glasses, new tobacco products, pet supplies, and trendy toys are expected to continue their upward trajectory, contributing to the growth of the consumption sector [2] Recommended Stocks - Recommended stocks include Sun Paper, Bohui Paper, Weigao Medical, Baiya Co., Nobon Co., Yiyi Co., Mengbaihe, and Gujia Home [3]