China Galaxy Securities released a research report indicating that in April 2026, the paper industry was in its traditional off-season. Leading paper enterprises collectively announced production suspension plans to curb supply and alleviate inventory pressure. They also implemented minor price increases for paper grades such as corrugated paper and kraft paper, working in concert to support prices and stabilize the market. Downstream demand in the packaging market remained stable, while industrial upgrades accelerated. In the light industrial consumer goods sector, state-owned enterprises are entering the trendy toys market, accelerating a shift from foreign trade OEM manufacturing to the domestic trendy toys and cultural creation segment. The tobacco industry maintained stable operations.
The main views of China Galaxy Securities are as follows:
Property data continues to face pressure. From January to March 2026, the cumulative sales area of commercial housing in China reached 195.24 million square meters, a year-on-year decrease of 10.4%. The cumulative sales value reached 1.7262 trillion yuan, a year-on-year decrease of 16.7%. On April 26, 2026, the number of commercial housing transactions in 30 major cities was 701 units, a year-on-year decrease of 78%. The transaction area in these cities was 63,300 square meters, a year-on-year decrease of 80%. The cumulative value of new housing construction starts was 103.73 million square meters, down 20.3% year-on-year. The cumulative value of completed housing area was 97.89 million square meters, down 25.0% year-on-year. In March 2026, the cumulative sales revenue of large-scale building materials and home furnishing stores in China was 307.96 billion yuan, down 8.79% year-on-year. The monthly sales revenue in March was 110.501 billion yuan, down 13.69% year-on-year. The building materials and home furnishing prosperity index decreased by 5.5% year-on-year but increased by 15.7% month-on-month.
Paper: Producers Halt Production to Support Prices and Stabilize Market; Pulp and Paper Conference Focuses on Green, High-Quality Transformation. On April 27, 2026, the daily average prices for Chinese hardwood pulp and softwood pulp were 4,563.68 yuan/ton and 5,049.81 yuan/ton, representing year-on-year changes of +4.37% and -2.64%, respectively. In April 2026, leading paper companies such as Nine Dragons Paper, Shanying International, and Bohui Paper utilized concentrated production stoppages to manage supply and inventory, while enacting small price increases for certain papers to collectively bolster the market. The China Pulp and Paper Conference was successfully held on April 9, 2026, focusing on the "16th Five-Year Plan" development strategy and building consensus on green, low-carbon initiatives, quality and efficiency improvements, and collaborative development to aid industrial transformation.
Packaging: Stable Downstream Demand, Accelerating Industrial Upgrades. In March 2026, China's total retail sales of consumer goods reached 4.1616 trillion yuan, a year-on-year increase of 1.7%. The cumulative value for January to March was 12.7695 trillion yuan, up 2.4% year-on-year. Among these, the year-on-year growth rates for retail sales of beverages, tobacco and alcohol, cosmetics, and daily necessities by designated large enterprises in March were +8.2%, +7.7%, +8.3%, and +4.6%, respectively. As of April 27, 2026, the price of tinplate was 5,850 yuan/ton, slightly higher than the previous month. On April 24, the settlement price for aluminum was 3,685 yuan/ton, a month-on-month increase of 14%, driven by supply and demand dynamics. As of April 24, 2026, the settlement price for Brent crude oil futures was $105.33 per barrel, a marginal increase of 0.80% from the previous month. As of April 27, 2026, the settlement price for Chinese spot polyethylene (general purpose) futures was 11,100 yuan/ton, down 1.19% month-on-month. The settlement price for polypropylene (fiber grade) was 9,613 yuan/ton, up 1.18% month-on-month.
Light Industrial Consumption: State Capital Enters Trendy Toys, AI Toy Wins Award, Tobacco Industry Deepens Collaboration. In April 2026, Chuangyuan Plans to acquire high-quality store assets of Cool Play, leveraging its state-owned background to accelerate the shift from foreign trade OEM to the domestic trendy toys and cultural creation market. Shifeng Cultural's AI Fei Fei Tu rabbit won an industry award, demonstrating the results of intelligent upgrades in light industrial products through its smart interactive and early education features. The tobacco industry held a joint conference focusing on industrial worker development and trade union collaboration to strengthen the foundation for stable industry operations.
Investment Recommendations: For the home furnishing sector, focus on Oppein Home Group, Kuka Home, and Solux. For the packaging sector, consider Yuto Packaging, ORG Technology, and Xianggang Technology. In the toys sector, attention is on Pop Mart. For the paper sector, monitor Sun Paper, Nine Dragons Paper, Hengfeng Paper, and Huawang. Additionally, positive outlook is maintained for the stable development opportunities in the tobacco-related industry chain, with a suggestion to watch China Tobacco International.
Risk warnings include potential underperformance of real estate market sentiment, slower-than-expected recovery in downstream demand, risks associated with significant increases in raw material prices, and intensifying industry competition.