ZHONGTAI SECURITIES·2025-12-29 11:43Investment Rating - The industry investment rating is maintained at "Overweight" [3] Core Views - The report highlights the opportunity in the paper sector due to the recent appreciation of the RMB against the USD, which enhances domestic purchasing power and reduces costs for imported raw materials like wood pulp [5][6] - The report suggests focusing on companies with high wood pulp procurement costs, such as Zhongshun Jierou, and recommends Sun Paper for its integrated advantages in cultural paper production [5][6] - The report also emphasizes the potential for improved profitability in Q4 due to stabilized and rising pulp prices, alongside the release of new production capacity [5][6] Summary by Relevant Sections Industry Overview - The light industry sector includes 167 listed companies with a total market value of 1,204.38 billion CNY and a circulating market value of 954.25 billion CNY [1] Market Performance - For the week of December 22-26, 2025, the Shanghai Composite Index rose by 1.88%, while the Shenzhen Component Index increased by 3.53%. The light industry index gained 1.69%, ranking 16th among 28 Shenwan industries [10] - The paper sector saw a weekly increase of 4.47%, while the textile and apparel index rose by 2.86% [10] Key Company Recommendations - Sun Paper: Buy rating with projected EPS growth from 1.10 CNY in 2023 to 1.48 CNY in 2027, with a PE ratio decreasing from 14.25 to 10.60 [3] - Baiya Co.: Buy rating with projected EPS growth from 0.54 CNY in 2023 to 1.28 CNY in 2027, with a PE ratio decreasing from 38.94 to 16.49 [3] - Huali Group: Buy rating with projected EPS growth from 2.74 CNY in 2023 to 3.97 CNY in 2027, with a PE ratio decreasing from 19.24 to 13.27 [3] Raw Material Price Trends - The report notes fluctuations in raw material prices, with MDI and TDI prices decreasing, while cotton prices have shown an upward trend [18][22] - The average price of wood pulp and various paper products is tracked, indicating a mixed performance with some prices stabilizing and others showing slight increases [42] Housing Market Data - The report highlights a significant decline in property sales, with a 39.1% year-on-year decrease in transactions among major cities [31] - Cumulative property sales area from January to November 2025 shows a 7.8% decline year-on-year [59] Consumer Goods and AI Applications - The report discusses the potential of AI applications in consumer goods, particularly in the context of new product launches and market expansion opportunities [6] Conclusion - The report emphasizes the importance of monitoring the paper sector due to favorable currency movements and suggests specific companies for investment based on their cost structures and market positions [5][6]