Promoting the trade-in of 3C consumer electronics in many places

Recently, many places have expanded the scope of trade-in to include the 3C in the scope of subsidies. For example, Jiangsu recently issued a notice to select operators participating in the 2025 trade-in of home appliances (including 3C products) in the province. Hubei announced the registration guidelines for trade-in activities for merchants, and 3C electronic products are being actively solicited for trade-in activities. Zhengzhou collects reserves to participate in the 2025 trade-in campaign for home appliances and 3C electronic products. Guizhou proposed at the end of November to include domestic mobile phones, tablets, etc. in the scope of trade-in support.

At present, looking at the direction of 3C electronic products, subsidies are being expanded in many places. Previously, Guangdong, Anhui, Sichuan and other places had introduced trade-in policies involving more categories, extending subsidies to products such as mobile phones and smart wearables. Recently, Chongqing, Chengdu, Hangzhou and other places have continued to update their trade-in policies. While expanding categories, they are also issuing consumer vouchers related to electronic products.

The company is the world's largest manufacturer of boutique paper packaging, and its products are in a leading position in the global consumer electronics and smart hardware industry

The inclusion of 3C products in this round of trade-in is expected to have a positive driving effect on 3C product sales growth, thereby boosting upstream packaging orders. The company has clear advantages in the field of global consumer electronics and smart hardware: first-class customer resources, global production layout, integrated product lines, advanced smart factories, and the layout of the entire environmentally friendly packaging industry chain are the company's hard strength. At the same time, adding to the company's growing brand influence, it helps the company outperform the general trend of the industry. The revenue growth rate over the years far exceeds the industry average. We expect that this round of subsidies may well benefit from the increase in demand for packaging in this round.

Continue to promote a global layout

The company has always viewed the global market as an important opportunity, actively promoted the global business layout, and took the lead in setting up an overseas factory in Vietnam in 2010. As of June 30, 2024, the company has more than 50 production sites and 5 service centers in 10 countries and more than 40 cities around the world. Global manufacturing advantages and global delivery layout can significantly shorten the production and transportation time of products, help the company respond quickly to global market needs, ensure stable service to customers, and lay a solid foundation for the company's continuous and steady development.

Maintain profit forecasts and maintain “buy” ratings

The company is an industry-leading and internationally renowned quality packaging solution provider, focusing on providing innovative one-stop packaging solutions and sustainable intelligent manufacturing services. We expect the company's 24-26 EPS to be 1.75/2.03/2.33 yuan/share, respectively, and PE 16/13/12x, respectively, to maintain a “buy” rating.

Risk warning: Consumer electronics demand falls short of expectations, diversified business development falls short of expectations, risk of fluctuations in raw material prices, risk of exchange rate fluctuations, etc.