CITIC Securities has released a research report indicating that in the second quarter of 2026, cost pass-throughs for metal packaging, boxboard paper, and specialty paper were relatively smooth, leading to an improvement in the bottom line for these sectors.
In overseas markets, cross-border e-commerce, brand expansion abroad, and localized brand operation models overseas have shown impressive performance. Domestically, under cost pressures, leading companies with industrial advantages have started to raise prices, while embracing AI technology as a new driver for industry innovation. The report advises actively seizing opportunities in high-dividend, low-valuation industry leaders with strong positions and the ability to implement price increases and efficiency gains first.
CITIC Securities presents the following key views:
Home Furnishings and Exports: The pressure continued in the second quarter of 2026, with domestic sales expected to stabilise in the second half of the year, while cross-border e-commerce for exports will become a highlight. The custom furniture sector faced the most prominent operating pressure. Soft home furnishings were less directly impacted by the new housing delivery chain, but they still face the dual pressures of high base effects from national subsidies and weak terminal consumption. Cross-border e-commerce for exports is a structural bright spot for the sector.
Light Industry Staples: There is pressure in the domestic market and on cost sides, while new businesses and overseas markets contribute to growth.
Paper-Based Industry Chain and Packaging: Profitability improved in the second quarter, with the trend expected to continue in the second half. According to information disclosed by ORG Technology Co., Ltd. (Shenzhen: 002701), the two-piece can market continued to see price increases of 2-3 cents in Q2 2026, while the three-piece can market saw stable demand, leading to improved profit margins per can. Luxshare Precision Industry Co., Ltd. (Shenzhen: 002831) saw stable main packaging operations. Zhongxin Battery Co., Ltd. (Shanghai: 603091) achieved improved domestic profitability and smoothly released new production capacity in Thailand.
Tobacco Industry Chain: Policy has sent positive signals, strengthening the advantages of leading companies. Smoore International Holdings Limited (Hong Kong: 6969) is benefiting from the reopening of the US market for compliant flavored e-cigarettes. China Tobacco International (HK) Company Limited (Hong Kong: 6055) has been affected by a decline in US tobacco leaf imports and temporary adjustments in the domestic duty-free market business processes. The oral nicotine pouch category for British American Tobacco p.l.c. continues to see high growth, and US e-cigarette growth has exceeded expectations.
Risk Factors: Significant increases in the prices of raw materials, energy, and shipping; intensifying industry competition; downstream demand falling short of expectations; and the risk of public crisis events.