Last week’s market review: last week (2021.12.20-2021.12.26), the commercial retail (CITIC) index rose 1.59%, outperforming the CSI 300 index by 2.27pct. Since the beginning of the year, the commercial retail sector has risen 1.60%, outperforming the CSI 300 index by 7.16pct. Among the 30 CITIC first-class industries, the commercial retail sector ranks fourth, of which 15 industries rose, including agriculture, forestry, animal husbandry and fishery (+ 6.49%), food and beverage (+ 3.94%) Building materials (+ 2.02%) led the gains, while power equipment and new energy (- 6.69%), non-ferrous metals (- 5.13%) and comprehensive finance (- 4.09%) led the declines. The trade retail industry PE quantile is greater than CSI 300. At present, the trade retail industry PE (TTM) is 108, which is 100% from small to large since 2005; Shanghai and Shenzhen 300pe (TTM) is 14.00, and the quantile is 54.99%.
Zhou Du’s core view:
Traditional retail: on Friday, December 24, the trend of the traditional retail sector was strong. We believe that it was mainly due to the negative external factors such as the epidemic situation and new business formats in the early stage. The traditional retail was under pressure, difficult to recover, and the sector oversold and rebounded. It is expected that with the arrival of new year’s day and Spring Festival and the release of demand, the performance and prosperity of traditional retail are expected to improve marginally.
New e-commerce retail: it was found out by the Inspection Bureau of Hangzhou Taxation Bureau, Zhejiang Province, Network anchor Huang Wei (Weiya) during the period from 2019 to 2020, Huang Wei evaded taxes of 643 million yuan by hiding personal income, fictitious business, changing the nature of income, false declaration, etc., and other underpaid taxes of 60 million yuan. According to law, Huang Wei made a decision on tax administrative punishment, recovered taxes, collected overdue fines and fined a total of 1.341 billion yuan. In the short term, some brands that rely heavily on super anchor Gmv Or affected; In the long run, for the industry ecology, it is conducive to promoting the standardized and healthy development of the live broadcast e-commerce industry; For brands, traffic decentralization helps brands regain the right to speak and pricing, force store self broadcasting and improve profitability; For the anchor, breaking the Matthew effect in the live broadcasting industry and traffic redistribution are conducive to the middle waist anchor to improve the exposure.
Key recommended companies this week:
Chow Tai Seng Jewellery Company Limited(002867) : under the background of the implementation of provincial representative model + common prosperity, the company develops new momentum and maintains the buy rating. The moat of the company lies in its obvious channel advantages and strong profitability of terminal channels. In the future, with the help of the provincial generation model, the power to expand stores is sufficient, which is expected to achieve nationwide coverage and occupy an obvious card position advantage in the low-line market. The company benefits from the outbreak of wedding market brought by consumption recovery in the short term and the bonus of leading brands brought by the improvement of industry concentration under the background of common prosperity + the rise of national tide in the long term. The potential growth point lies in the rapid development of e-commerce business and the second growth curve of jewelry sub brands. The company has always maintained a high roe level of about 20% due to its strong profitability. We expect that the company’s revenue growth from 2021 to 2023 will be 79%, 34% and 24% respectively, and the growth rate of net profit attributable to the parent company will be 39%, 24% and 17% respectively. The corresponding PE valuation will be 14x, 11x and 9x respectively, maintaining the buy rating.
Investment suggestions:
Investment main line 1: in the traditional new retail field, the business format of warehousing members is in full swing. It is suggested to pay attention to HEMA (Alibaba), Yonghui Superstores Co.Ltd(601933) , Jiajiayue Group Co.Ltd(603708) which actively layout the business format of warehousing stores.
Investment main line 2: the new retail field of e-commerce, the rapid development of live broadcasting and store self broadcasting, and the wave of community group buying, showing Matthew effect. It is recommended to pay attention to the business of voice, electricity, Alibaba and tiktok.
Investment main line 3: gold jewelry continues the strong recovery trend and high outlook since the beginning of the year. We continue to recommend Chow Tai Seng Jewellery Company Limited(002867) and suggest paying attention to Chow Tai Fook and Lao Feng Xiang Co.Ltd(600612) .
Risk warning: repeated epidemic situation; Macroeconomic depression; Industry competition intensifies.
