"Implementing policies for the city" is expected to promote the recovery of the real estate market. The 2022 government work report puts "steady growth" in a more prominent position. In terms of the expression of real estate policy, in addition to adhering to the principle of "housing without speculation", it also emphasizes supporting the commercial housing market to better meet the reasonable housing needs of buyers, stabilize land prices, house prices and expectations, and write the "implementation of policies for the city" into the government work report for the first time. Under the guidance of the central bank, the down payment of real estate will be reduced due to the introduction of more relaxed down payment policies, such as the relaxation of real estate sales in cities under the guidance of the central bank. From the perspective of the sales of the top 100 real estate enterprises, the cumulative year-on-year decline of 43% in January and February is still not optimistic about the real estate sales data. However, recently, Zhengzhou and other places have issued a new real estate policy. It is expected that the data in March and April will improve, and the liquidity of the home sector in the post real estate cycle is also expected to improve marginally.
The expansion of leading categories of furniture has been smoothly promoted, and the recovery of real estate is expected to bring performance flexibility. The first-line furniture leaders have gradually crossed over the types of furniture and accelerated their development to large home furnishings. Since the end of last year, Oppein Home Group Inc(603833) , Jason Furniture (Hangzhou) Co.Ltd(603816) , Suofeiya Home Collection Co.Ltd(002572) have launched 29800, 49800 and 39800 packages respectively, covering customization, software and even electrical appliances. Through the whole customization, we can meet the integrated design and convenience needs of consumers, achieve stronger competitiveness and expand greater market space. In addition, within the original types of furniture, customized leading enterprises can use channels and brand advantages to coordinate the sales of cabinets, wardrobe, wooden doors and other categories, and continue to integrate the supply chain to realize the continuous improvement of income and concentration; Software leading enterprises cooperate to sell sofas and mattresses, and benefit from strong consumption attributes. It is expected to continue to improve the concentration. Compared with the United States, there is still more than double the space for software concentration. In the second half of 2021, the zero and real estate completion data of furniture society slowed down comprehensively, and most leading furniture enterprises achieved rapid growth, confirming the trend of increasing concentration. The recovery of real estate will significantly increase the demand for furniture, and the leading enterprises of multiple categories can benefit more. Through the synchronous development of new and old categories, they can obtain greater performance flexibility.
The overall pressure on the cost side is controllable. Recently, affected by the international situation, the global price of bulk raw materials has further increased, bringing certain cost pressure to downstream enterprises. Among the materials related to furniture raw materials: hardware materials have increased significantly, of which steel and aluminum have increased by 25% and 14% respectively since the beginning of the year; The price of board was stable, and the price of leather and sponge was stable and decreased. Hardware accounts for a certain proportion of customized furniture products (estimated at more than 10%), or bring a certain cost pressure, but leading furniture enterprises are expected to offset the cost pressure by raising prices and controlling fees. In terms of shipping, the FBX index of China's main foreign routes, the European line remained down, with a decline of 10%. The East and West lines of the United States have increased slightly since the beginning of the year, and the export costs of household export enterprises have been stable. We believe that the cost side risk of furniture enterprises is controllable, and we need to pay more attention to the changes on the demand side. (price trend of main raw materials attached)
Investment suggestion: the two sessions laid the tone of steady growth, and "implementing policies for the city" was mentioned for the first time in the government work report. The follow-up real estate policy is expected to continue to show a warming trend. It is speculated that the real estate policy is mostly reflected in cities below the second tier, and it is optimistic about the recovery of furniture demand in low tier cities. 1) We are optimistic about the soft furniture industry with low cost pressure and low retention rate in low tier cities. Recommend Jason Furniture (Hangzhou) Co.Ltd(603816) (continue to achieve revenue growth through channel expansion and category expansion; in the short term, the improvement of new store efficiency and the decrease of tariff are expected to bring profit elasticity). 2) In terms of customized furniture, the company is optimistic about the synchronous rebound of bulk business and retail business under the relaxed real estate policy, bringing performance flexibility. Recommend Oppein Home Group Inc(603833) (the number of channels is the first in the industry, the supply chain management and control ability and brand influence are good, and the big home strategy is promoted smoothly), Suofeiya Home Collection Co.Ltd(002572) (the risk of credit impairment is released, the retail reform is effective, and the listing of main brand cabinets is expected to improve the performance). 3) It is suggested to pay attention to the main line of the sinking market. We believe that Zbom Home Collection Co.Ltd(603801) , gold cabinets with high income in low-line cities are expected to fully benefit from the real estate policy.
Risk tip: the rise of raw material prices exceeded expectations, the decline of real estate exceeded expectations, and the economic growth slowed down.
