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Since the beginning of 2021 (December 24, 2021), our defined retail index has fallen by 1.01%, outperforming CSI 300 (- 6.58%) and the new retail index (- 3.46%). At present, the PE / PS / Pb of the industry is at the percentile of 0.90% / 87.90% / 87.70% since the beginning of 2010, among which PE is obviously in the undervalued range. The main reason is that the weighted average affects the overall PE level of the industry because the profits of many companies have fallen to negative value and have not been improved. At present, the retail industry is in the state of low allocation and needs to be increased in the future.
From the perspective of policy, promoting the upgrading of residents’ consumption and cultivating new consumption have become the theme of the policy during the 14th Five Year Plan period; For the domestic demand market, it clearly emphasizes deepening the supply side structural reform, adapting to personalized, differentiated and quality consumption demand, continuously expanding the supply of high-quality consumer goods and medium and high-end products, improving the influence and competitiveness of independent brands, and taking the lead in cultivating a number of high-end brands in the field of consumer goods such as cosmetics, clothing, home textiles and electronic products. At the same time, good market order requires supporting institutional environment and regulatory measures, and various laws and regulations, quality standards and post evaluation system will be gradually improved during the 14th Five Year Plan period. In addition, in the short term, the Ministry of Commerce has also made plans to promote consumption on New Year’s day and Spring Festival, and comprehensively mobilized and deployed to do a good job in market supply guarantee during the “two festivals” on the premise of grasping epidemic prevention and control; Specific measures include: strengthening the organization of supply, ensuring normal business during the festival and ensuring sufficient supply of supply.
From the industry level, the total retail sales of social consumer goods from January to November increased by 13.7% year-on-year in nominal terms, an increase of 8.2% over the same period in 2019, and the consumer market generally showed a positive recovery trend; In November, the total amount of social zero in a single month increased by 3.9% year-on-year, an increase over the previous period. After entering the autumn and winter peak season of “golden nine and silver ten”, consumption resumed and accelerated again, far exceeding the historical center. We believe that the current consumer market environment and policy environment are relatively positive and optimistic. With the further promotion of China’s epidemic control effect and vaccine popularization, consumption promotion policies such as consumption vouchers are steadily implemented, China’s economy is gradually returning to the early growth track, residents’ consumption confidence and the vitality of China’s consumer market are steadily restored, and the social growth rate will also return to the pre epidemic level.
From the market level, the revenue of Listed Companies in the consumer goods retail industry in the first three quarters increased compared with last year, and they are gradually getting rid of the impact of the epidemic and in a state of recovery. However, the net profit fell year-on-year, and the profitability needs to be enhanced. In the fourth quarter of the year, the online channel ushered in the “double 11” online promotion. Offline stores and e-commerce platforms formed omni-channel marketing. At the same time, with the help of thematic activities such as Christmas in December, store celebration at the end of the year, January New Year’s day and Spring Festival, they continued to attract consumers to stores to experience feelings and achieve consumption. Both channels and brands actively grasped the opportunities in the peak season during this time period, Sprint for further growth in total annual sales. In the above context, it is in line with holiday celebrations Consumer goods required for gifts (such as drinks, gold jewelry and cosmetics), hot selling categories of “double 11” (such as home appliances 3C, cosmetics, personal care and clothing), and corresponding channel providers (e.g. e-commerce, shopping) and others have ushered in the expansion of sales scale; in addition, a small-scale delta variant virus epidemic began to occur in many places at the end of the year. We believe that we still need to pay attention to investment opportunities in basic livelihood industries (such as personal care and other daily necessities, supermarket channels).
Investment suggestions: keep the omni channel configuration series unchanged. Recommendations – Retail Channel Tianhong Department Store (002419. SZ), Wangfujing Group Co.Ltd(600859) (600859. SH), Yonghui Superstores Co.Ltd(601933) (601933. SH), Jiajiayue Group Co.Ltd(603708) (603708. SH), Chengdu Hongqi Chain Co.Ltd(002697) (002697. SZ), Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) (300755. SZ), Hangzhou Onechance Tech Corp(300792) (300792. SZ), Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) (605136. SH); And Shanghai Jahwa United Co.Ltd(600315) (600315. SH), Proya Cosmetics Co.Ltd(603605) (603605. SH), Guangdong Marubi Biotechnology Co.Ltd(603983) (603983. SH), Yunnan Botanee Bio-Technology Group Co.Ltd(300957) (300957. SZ), Hangzhou Coco Healthcare Products Co.Ltd(301009) (301009. SZ), Hangzhou Haoyue Personal Care Co.Ltd(605009) (605009. SH), Winner Medical Co.Ltd(300888) (300888. SZ), Chongqing Baiya Sanitary Products Co.Ltd(003006) (003006. SZ) of consumer products.
Risk warning: the epidemic prevention and control degree is lower than the expected risk; The risk of insufficient consumer confidence.
