Cinda Securities: China's Manufacturing Sector Enters Global Development Cycle with Emerging Opportunities in Structural Growth Areas

Cinda Securities released a research report stating that the pricing logic of Chinese stocks is undergoing subtle changes as China gradually assumes a more proactive role in Sino-U.S. trade, with its manufacturing sector entering a global development cycle. The report highlights that the real estate sector is on the path to stabilizing, anti-inward-looking policies mark an economic shift, and macro tail risks are diminishing. New technologies and industries are emerging, creating more opportunities in structural growth areas.

The core investment themes include four directions: 1. New consumption trends driven by structural growth 2. Companies expanding globally with enhanced resource allocation capabilities 3. Long-term advantages of high-dividend strategies 4. Undervalued consumer blue-chips

**Key Sector Insights:**

**1. New Consumption: A Choice of the Era** - **Pet & Baby Care**: The pet food industry shows volume-price synergy, with diversified growth drivers raising market ceilings. Strong brand loyalty and product differentiation create high barriers for leading players. The baby care sector, though fragmented, is evolving toward specialization, with premiumization and functional marketing. Recommended stocks: Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited, Petpal Pet Nutrition Technology Co.,Ltd., Yiyi Co.,Ltd., Champion Technology Co.,Ltd., Dencare Oral Care Co.,Ltd., and Runben Co.,Ltd.. - **Gold Jewelry**: Premium gold jewelry is expected to maintain strong demand in 2026 due to its value-preservation attributes and brand consolidation. Focus on established brands like Lao Feng Xiang, Chow Tai Fook, and emerging players such as Caibai Co.,Ltd.. - **Trendy Toys**: Leaders are transitioning from product-driven to IP-ecosystem models. Top pick: Pop Mart International Group Limited. - **E-Cigarettes**: Regulatory tightening favors compliant players. Smoore International Holdings Limited is expanding into HNB products. - **Smart Eyewear**: Global AI glasses sales surged 285% YoY in 2025Q1–Q3, with further growth expected. Watch Conant Optical Co.,Ltd. and Mingyue Optical Co.,Ltd.. - **E-Bikes**: Post-regulation consolidation benefits leaders like Ninebot Limited and Yadea Group Holdings Ltd..

**2. Cyclical Recovery: The Charm of Timing** - **Home Furnishings**: The sector may stabilize by 2027. Focus on resilient players such as Kuka Home and Sophia Home Collection Co.,Ltd.. - **Paper & Packaging**: Tight woodchip supply supports pulp prices. Recommended: Sun Paper Co.,Ltd. and Nine Dragons Paper Holdings Limited. - **Metal Packaging**: Profit margins may improve in 2026. Track ORG Packaging Co.,Ltd..

**3. Export & Globalization** U.S. rate cuts and easing trade tensions are boosting orders. Brands like Taotao Group and Ziel Home Furnishings Co.,Ltd. are expanding overseas with localized operations. Cross-border e-commerce leaders such as Anker Innovations Technology Co.,Ltd. are also well-positioned.

**4. Textiles & Apparel** Three themes for 2026: - Sports/outwear growth (e.g., Anta Sports Products Limited) - Resilient menswear/home textiles (e.g., HLA Group) - Optimistic manufacturing exports, especially to Indonesia (e.g., Shenzhou International Group Holdings Limited)

**Risks**: Slower-than-expected consumption recovery, trade conflicts, weak property sales, commodity volatility, and e-cigarette regulations.