Key investment points
Market Review
In January, CS commerce and retail industry fell by 6.94%, 2.32pct lower than the same period of last year. The market performance was significantly stronger than that of the same period of last year, outperforming the market by 0.68pct. In terms of sub sectors, most of the sub sectors showed a decline, and the top three sub sectors were comprehensive business formats, professional market operation and department stores, which were 2.32%, – 4.79% and – 4.82% respectively. Most industry stocks fell. The overall PE valuation level of the industry showed a correction, which continued to fall compared with the previous month. During the month, the PE trend of each sub sector mostly showed a decline, but the PE valuation of the jewelry sector continued to improve.
Industry monthly data tracking
The year-on-year increase of CPI fell, and food prices changed from rise to fall. In December, CPI rose by 1.5% year-on-year, down 0.8pct from the previous month. Non PCT food prices rose by 1.2% year-on-year, down from 1.2% last month. From the perspective of structure, the decline of pork price has expanded, and the rise of fresh vegetables, aquatic products and other prices has fallen, which jointly affects the transformation of food prices from rise to fall. At the same time, the decline of industrial consumer goods prices has led to the decline of non food prices, which has a synchronous impact on the decline of CPI rise. In 2021, CPI rose by 0.9% year-on-year, down 1.6pct from the previous year, and generally operated within a reasonable range of moderate rise.
The scale of the consumer market has expanded steadily, and online consumption has increased rapidly. In 2021, the total social zero reached 44 trillion yuan, an increase of 12.5% over the previous year, with an average growth rate of 3.9% in the two years. The scale of the consumer market continued to expand. Retail sales of goods grew steadily, basic living goods grew well, upgraded goods grew steadily, and contact consumption such as catering was more affected by the epidemic. Online consumption grew rapidly, but the growth rate of online retail sales of physical goods slowed down, and the online penetration rate decreased year-on-year. In 2021, the online retail sales of physical goods increased by 12%, with an average growth of 13.4% in the two years, and the growth rate was significantly higher than that of offline consumption.
The operation of physical retail stores has improved, and the retail volume has achieved rapid growth. It is estimated that the retail sales of consumer goods in physical stores will increase by 12.7% year-on-year in 2021. Although the growth rate is 1.2pct slower than that from January to November, it is higher than the average growth rate of consumer goods market in 2021 by 0.2pct and 21.5pct higher than that in 2020. Among the retail sales of stores above the quota, the retail sales of convenience stores, supermarkets, specialty stores and specialty stores increased by 16.9%, 14.1%, 12.8% and 12% respectively over the previous year, with an average increase of 7.5%, 11.2%, 3.3% and 5.1% respectively in the two years.
Industry news
Estee Lauder’s annual sales exceeded 112.7 billion, led by the Chinese market;
The amount of consumption payment under the Spring Festival 7 antenna in Shanghai was 37.1 billion yuan;
The amount of online payment reached 4 trillion yuan five days before the Spring Festival holiday.
Investment strategy
The consumption scene continues to upgrade, and various emerging content forms, including live broadcasting, help businesses more effectively Contact consumers, realize communication and interaction and fan growth, and finally obtain sales increment. Due to the impact of e-commerce and the impact of the epidemic, physical retail needs to be transformed urgently. Offline terminal stores have become a scene display place to realize the consumer experience, and the digital penetration of stores still has great room to improve. At present, the epidemic situation in China is spreading in many places. It is suggested to pay attention to the new retail model with extended coverage in multiple scenes such as live delivery, community group purchase and real-time retail, mainly focusing on the following main lines: 1) domestic brands are close to consumer demand and accelerate the sinking and penetration, and leading enterprises continue to increase their market share through new media marketing: Proya Cosmetics Co.Ltd(603605) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) ; 2) Jewelry consumption tends to be daily, the demand of low-level cities rises and channels are encrypted. There is a wide space for new diamond tracks: Chow Tai Seng Jewellery Company Limited(002867) , Shanghai Yuyuan Tourist Mart (Group) Co.Ltd(600655) ; 3) The value of offline channels is reshaped, and department store enterprises are expected to change their overweight channels, which is expected to usher in the valuation repair market: Wangfujing Group Co.Ltd(600859) , Rainbow Digital Commercial Co.Ltd(002419) .
Risk tips
Macroeconomic growth slowed down; The effect of consumption upgrading is less than expected; Diversion of new business forms and intensification of market competition; China’s epidemic has spread in many places, affecting consumer confidence and willingness.
