Papermaking light industry sector mid-term investment strategy for 2012

The main logic of this report is: whether it is close to consumption or close to cyclical in the light industry papermaking sub-sector, most of them will bottom out in the 4th quarter of 11th or the 1st quarter of 12th, but the recovery is slow, and the performance in the short term is difficult. Significant improvement. We believe that furniture and toy companies with brand and channel advantages, downstream packaging companies with higher growth and more stable profitability, give light industry overweight rating; paper industry in view of poor supply, growth Generally, the paper is given a neutral rating.

Paper: The bottom is now available and the recovery is still slow. Due to the lack of demand due to macro tightening, the large capacity of its own production is also an important reason for the decline in the economy in the past 11 years. In the fourth quarter of 2011, it can be considered as the bottom of the industry. It began to slowly pick up in the first half of the year, but the rebound will be significantly weaker than in 2009. In terms of investment strategy, we recommend special paper companies with relatively stable demand and capacity release, including Qifeng, Hengfeng Paper and Guanhao Gaoxin; waiting for the opportunity to intervene in the mainstream paper companies in the mid-term market, mainly Recommended Sun Paper, Chenming Paper, etc.

Furniture flooring: The “old-for-new” policy catalyzes the real estate policy to relax the expected performance. The country's real estate control policies have had a negative impact on the sales of the furniture industry, coupled with poor export conditions, the industry performance in the first quarter was lower than expected. In some areas, the trial of “old-for-new” policies is better. If it is pushed across the country, it can become a catalyst for the industry to rise; the real estate policy is expected to relax, and the bad performance of the industry will continue in the future as the volume of new homes rebounds. It is recommended to have a growth custom wardrobe industry leader Sophia, in addition to focusing on the expansion of domestic channels, benefiting from the export recovery of Yihua Wood.

Cultural and educational supplies: brand toys lead the broad baby market. The export of cultural and educational supplies companies accounted for a large proportion. Due to the impact of the European debt crisis, the export situation in the past 11 years was not good. At the beginning of the 12th year, with the improvement of the US economy, the export bottoming momentum began to dawn. After CCTV "3.15" exposed "two drug toys", consumers pay more attention to the safety of toys. Toys, as a product of China's vast baby products, will gain more market share in the national rectification industry. It is recommended that the car model toy subdivided the leading star model, the company has higher barriers, has established multi-channel sales, and has upstream raw materials to ensure its quality and safety.

Packaging and printing: the weaker pricing power, choose downstream consumption. The industry is in the middle of the industry chain and belongs to the weaker pricing power. When the economic environment is not good and the cost rises, the profitability will be weakened. We believe that the packaging industry has good growth, and companies with downstream consumption can guarantee their growth and profitability are relatively stable. It is recommended that the cosmetics packaging lead will be produced by Lixing. The company's industrial chain will continue to open up new markets and increase the capacity bottleneck. In addition, it can also pay attention to Yongxin shares and Li Peng shares.

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