Industry perspective update:
Home furnishing: this week Suofeiya Home Collection Co.Ltd(002572) successfully held the cabinet listing and the whole customized package press conference, at which the company launched the 39800 pound whole package, which has the top configuration of "all big brands, all rigid needs and all categories". We think this is an epoch-making package, which not only means that the whole customization trend of the industry has been formed, but also means that Suofeiya Home Collection Co.Ltd(002572) is entering a new, correct and growth oriented strategic development stage. We believe that the changes in the supply side of home furnishings in 2022 will be more noteworthy than the demand side. Under the trend of integrated sales of customization and software, the requirements for the comprehensive ability of brands and dealers will be higher, the competition threshold will be significantly improved, and the industry pattern is expected to usher in marginal optimization. On the whole, we are optimistic about Oppein Home Group Inc(603833) Jason Furniture (Hangzhou) Co.Ltd(603816) and Suofeiya Home Collection Co.Ltd(002572) , in which the results of deep reform will gradually appear.
Papermaking: cost support + marginal improvement of supply and demand, and the recovery of fundamentals drives the valuation and repair of the sector. Under the catalysis of the marginal recovery of demand for cultural paper driven by the academic flood season, the pressure on the import side has weakened, some kinds of paper represented by white cardboard have shown their price advantages under the pressure of overseas energy & force majeure, and the export side has performed vigorously, promoting the further improvement of the supply and demand pattern. In addition, affected by the pressure on the cost supply side, the price of wood pulp is rising continuously, which supports the smooth implementation of the price increase of paper enterprises. We believe that the industry has gradually entered the recovery period from the bottom, and we are optimistic about the valuation repair market brought by the upward profit per ton of the sector.
Recently, China has jointly carried out four aspects of "new-type tobacco" and "electronic cigarette industry" to clean up the illegal operation environment of minors, so as to lay an ideal foundation for China's electronic cigarette industry. On the whole, the Chinese market is still in a waiting period for policies. Most brands take the initiative to reduce production and operate cautiously. This measure is conducive to the low inventory operation of dealers and terminals, stabilize the price system and lay a solid foundation for long-term benign operation. In terms of HNB sector, the overall good development expectation of China's HNB industry remains unchanged, and it is still in the policy waiting period.
Consumer Light Industry: since 2021h2, the traditional stationery industry has been affected by the epidemic and the double reduction policy, and the willingness of the industrial chain to prepare the warehouse + the downstream demand has been affected, resulting in a phased process of performance. With the digestion of the industrial chain inventory + the improvement trend of the dynamic sales margin catalyzed by the primary school flood season, it is optimistic that the leading stationery enterprise Shanghai M&G Stationery Inc(603899) will actively repair the growth through the adjustment of product structure strategy and channel structure, It is expected that Q1 will continue to improve its ability to expand and repair the boundary in the medium and long term. The new businesses kelipu and Jiumu are expected to further improve the growth quality on the basis of high growth and ensure the medium and long-term growth momentum
Investment advice
Home furnishing: recommend Oppein Home Group Inc(603833) (Integrated Business & platform), Jason Furniture (Hangzhou) Co.Ltd(603816) (domestic share concentration & export profit elasticity), Suofeiya Home Collection Co.Ltd(002572) (it is improving in many aspects, and there is a large space for valuation repair).
Papermaking: it is recommended that Xianhe Co.Ltd(603733) , the impact of one-time energy cost has passed, and the price increase letters of 500 yuan / ton / time have been successively issued for key paper products in February and March. The first batch of price increases have been implemented smoothly, with high demand and capacity expansion supporting the growth logic. At present, the PE valuation is only 15x.
Risk factors
The extent and duration of the slowdown in China's consumption growth exceeded expectations; Real estate sales have been shrinking sharply for a long time; The price of raw materials rose faster and longer than expected; The exchange rate fluctuated sharply.
