Under the influence of epidemic and other factors, the consumer industry in 2021 has a general growth trend, and some categories reflect resilience. According to the National Bureau of statistics, the two-year average growth rate of total social zero from 2019 to 2021 was 3.9%, and the growth rate in the second half of the year was lower than that in the first half of the year. We believe that the reasons include the rebound of the epidemic caused by the mutant strain. Due to the Omicron epidemic superimposed on the high base of 2021h1, the growth in the first half of 2022 may still be under pressure. In this context, the consumption of some must-have items shows strong resilience.
Investment idea of consumer industry in 2021: focus on brand and upstream supply chain. In terms of brands, we believe that the rise of national brands is the general trend of China's consumer goods industry in the next 5-10 years. Some domestic brands show obvious advantages in understanding new channels such as e-commerce, insight into consumer demand and control over the direction of product upgrading. It is suggested to pay special attention to them. In the supply chain, China has a high-quality workforce, complete production technology and efficient operation mechanism. We suggest to focus on the "invisible champion" of the upstream supply chain with reasonable valuation and certain growth attributes, which is expected to usher in a "double-click" with the growth of demand and the improvement of the business environment.
We believe that there are three main lines of consumer goods investment: increased penetration, market share and price. 1) Penetration improvement: it is an important and scarce logic, but most traditional consumer goods have passed the stage of rapid growth. The improvement of penetration usually occurs in new consumer goods categories such as medical beauty and diamond cultivation. 2) Increase of market share: including the increase of brand degree (such as catering industry) and brand market share (such as functional skin care products, functional clothing, etc.). 3) Price increase: only a few consumer goods have the ability to continuously raise prices; Bosideng, Li Ning, Anta and other brands have achieved price increase through product iteration. Among them, the second-hand price of some sports shoes of Li Ning and Anta is higher than MSRP. This phenomenon deserves our attention.
Focus on:
Cosmetics: the implementation of new regulations has raised the industry threshold and highlighted the Matthew effect of the industry. The brand side pays attention to enterprises that pay attention to basic R & D and innovation and have a good multi platform layout. At the same time, it also pays attention to the gradual recovery of the performance of leading raw material suppliers, agent operators and agent industry and commerce, which has a certain growth flexibility. Recommended targets: Proya Cosmetics Co.Ltd(603605) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , etc. it is recommended to pay attention to Nanjing Cosmos Chemical Co.Ltd(300856) , etc.
Clothing brand retail: the rise of national tide is a general trend in 5-10 years. Recommended by: Li Anta, Li Anta, etc.
E-commerce of industrial products: there is much room for penetration improvement. According to iResearch consulting, in 2020, the penetration rate of e-commerce of industrial products in China was less than 5%, and the industry was still in its early stage. The era of industrial digitization is coming. E-commerce of industrial products is the core link and important entry point. It is suggested to focus on it. Recommended targets: Beijing United Information Technology Co.Ltd(603613) , Milkyway Chemical Supply Chain Service Co.Ltd(603713) , etc.
Cultivating diamonds: with the rapid increase of penetration rate, the terminal market has broad prospects. Recommended targets: Henan Liliang Diamond Co.Ltd(301071) and so on. It is recommended to pay attention to North Industries Group Red Arrow Co.Ltd(000519) , Henan Huanghe Whirlwind Co.Ltd(600172) and so on.
Medical beauty: the demand boom of the industry continued to be high, and the supervision of informal products and advertising became stricter. It has long been beneficial to the upstream device manufacturers producing formal products and the leaders of standardized leading midstream medical beauty institutions. The approval of a number of renewable products during the year brought new development opportunities. Recommended targets: Imeik Technology Development Co.Ltd(300896) , Bloomage Biotechnology Corporation Limited(688363) , Yonghe medical, etc.
Risk tips: intensified industry competition, lower than expected consumer demand, epidemic situation, rising raw material prices, deterioration of export trade environment, etc
