Core view:
The light manufacturing industry is of great importance and contains structural opportunities. In 2020, the number, assets, revenue and profits of Industrial Enterprises above Designated Size in the light industry accounted for 28.4%, 13.7%, 18.3% and 20.7% respectively. In January 2022, the Ministry of industry and information technology issued the draft guidance document for comments, which clarified the importance of the light industry and proposed to strengthen the comprehensive strength of China’s light industry manufacturing industry in an all-round way and achieve high-quality development.
Each segment has its own advantages, and industry changes provide investment opportunities. The trend of fine decoration and stock houses in the furniture industry continues to deepen, the steady growth policy is expected to drive the recovery of real estate, and the industry leaders collectively arrange the decoration channels; There are structural opportunities in the packaging industry. The high-end paper packaging brings increased value, the metal packaging market continues to expand, and the leading enterprises continue to expand their business; In the paper industry, steady growth drives the macroeconomic recovery, the demand of the paper industry is expected to recover, and the gross profit margin of finished paper is expected to improve. At the same time, the industry leader extends the whole industrial chain, globalizes the layout, weakens the cyclical attribute, and the performance elasticity is expected; There is a wide space for e-cigarette substitution, the technology iteration strengthens the attribute of harm reduction, the global supervision is gradually implemented, and the industry will enter a stage of orderly development.
The industry valuation is at a historically low level and the investment value is prominent. Since 2015, the P / E ratio of light industry manufacturing industry segments has been declining. As of January 28, 2022, the P / E ratios of CSI 300 / light industry manufacturing / packaging and printing / household products / papermaking / entertainment products were 13X / 21x / 31x / 24x / 11x / 46x respectively, at a low level. Among them, the valuation attraction of the paper industry is prominent. According to historical data, from April 8, 2005 to January 28, 2022, the P / E ratio of the paper industry has been greater than CSI 300 for more than 80%. When the P / E ratio of the paper industry itself is 10-15 times and lower than CSI 300 index, the P / E ratio and price table of the paper industry will rise sharply in the future.
Recommend high-quality companies such as Oppein Home Group Inc(603833) , Jason Furniture (Hangzhou) Co.Ltd(603816) , Shenzhen Yuto Packaging Technology Co.Ltd(002831) , Shandong Sun Paper Co.Ltd(002078) and smore international. Oppein Home Group Inc(603833) as the leader of customized home furnishings, we grasp the development opportunities of the industry and achieve rapid growth. It is expected that the company will achieve EPS of 4.62/5.66/6.83 yuan in 2021 / 22 / 23, corresponding to PE 30x / 24x / 20x, 30-35 times PE in 2022, corresponding to market value of 103.5-120.8 billion yuan; Jason Furniture (Hangzhou) Co.Ltd(603816) as the leader of finished furniture, the company continues to expand its categories and globalize its layout. It is expected that the company will achieve EPS of 2.7/3.4/4.1 yuan in 2021 / 22 / 23, corresponding to PE 27x / 21x / 18x, 30-35 times PE in 2022, corresponding to market value of 66.69-77.805 billion yuan; Shenzhen Yuto Packaging Technology Co.Ltd(002831) focus on 3C packaging business, implement the “1 + n” diversified strategic layout, and be optimistic about the future development of the company. It is expected that the company will achieve eps1 in 2021 / 22 / 23 33 / 1.9/2.31 yuan, corresponding to PE 25X / 17x / 14x, giving the company 30 times PE in 2022, corresponding to a market value of 54.27 billion yuan; Shandong Sun Paper Co.Ltd(002078) is a leader in the paper industry. The integration of forest, pulp and paper continues to expand vertically. Based on the accumulation of original resources, it expands horizontally and has significant growth. It is expected that the company will achieve EPS of 1.16/1.34/1.42 yuan in 2021 / 22 / 23, corresponding to PE of 9.6x/8.3x/7.8x, giving the company 13 times PE in 2022, corresponding to market value of 46.787 billion yuan; As a global leader in atomization solutions, smore international has excellent R & D strength and technical reserves, binds to the leading brands in the industry, and is expected to achieve rapid development in the gradual implementation of supervision in the future. It is expected that the company will achieve EPS of 0.85/1.15/1.51 yuan in 2021 / 22 / 23, with a corresponding PE of 39x / 28x / 22x, giving the company 40 times PE in 2022 and a corresponding market value of 276.8 billion yuan.
