CICC 2025 Young Workers Outlook: Economy Bottoming Out, Waiting for Blossoms

CICC released a research report stating that the performance of the light industry sector in 2024 will see a significant differentiation between domestic and export sales. Domestic sales will be under pressure due to weak demand, while export sales will see rapid recovery driven by channel replenishment. Looking ahead to 2025, the differentiation between domestic and export sales may continue, with domestic sales expected to significantly recover under policy support, while export sales may slow down due to high base effects and face uncertainties in tariffs. It is recommended to focus on leading companies in the domestic market and companies focusing on new business growth, as well as high-growth export enterprises with lower tariff risks in the light industry sector in 2025, while also paying attention to event-driven opportunities such as AI glasses and mergers and acquisitions. Key points from CICC are as follows: Home Furnishings: Industry demand improvement driven by policy In 2025, the demand for second-hand housing and inventory housing updates is expected to effectively offset the decline in demand for new housing, and industry demand is expected to significantly recover. The integration of categories and channels remains a trend in the industry, and companies with the ability to operate in multiple categories and channels are expected to enjoy more industry dividends and increase market share. Household Light Industry: Industry growth driven by new trends and technologies The household light industry has a relatively high demand elasticity, and effective demand is expected to further recover in 2025. Under the influence of new consumer trends such as IP cultural innovation and AI technology, certain subcategories are expected to accelerate their development. Some companies will achieve quality growth through product structure optimization, channel efficiency expansion, and brand strengthening, with market share expected to continue to rise. Packaging: Focus on demand growth in subcategories and opportunities for supply reshaping It is expected that the overall demand for the industry will weakly recover in 2025. Subcategories such as consumer electronics packaging and environmental packaging are expected to perform relatively well under the influence of policies promoting upgrading and environmental protection. Some companies will continue to strengthen their cost advantages and increase market share through mergers and acquisitions. Light Industry Exports: Continued recovery in demand, focus on tariff impact With the downward trend in overseas CPI and interest rates, foreign demand is expected to continue to grow steadily. Product categories sensitive to interest rates, such as home furnishings and power tools, may have higher demand elasticity in the post-cycle period, but export orders are still affected by downstream channel inventory. In addition, tariffs have become a focus of the industry, and tariffs may accelerate differentiation among companies, recommending high-growth enterprises with relatively low tariff risks. Looking ahead to 2025, the four preferred investment themes are: 1) Leading companies in the domestic market; 2) Companies with significant improvement in operations or on the second growth curve; 3) Low tariff risk/high growth export enterprises; 4) Companies with event-driven catalysts. Risk warning: Increased industry competition; changes in international trade policies and exchange rates; significant fluctuations in raw material prices.