Main points:
Industry core week view: the regulation of Chinese flavor e-cigarettes exceeds expectations, and the export pattern has not changed [e-cigarettes]: at present, the industry is in a policy transition period. On March 11, according to the standard preparation and revision plan of the National Standardization Administration Committee, the State Tobacco Monopoly Administration organized the completion of the national standard of electronic cigarette (second exposure draft), which will be publicized until March 17, 2022; On the same day, the measures for the administration of electronic cigarettes were published, and the measures will be implemented from May 1. The key points include: (1) the supervision of taste tobacco exceeds expectations. Atomized tobacco products should not show other flavors except tobacco, and mint flavor is prohibited. The regulation of the national standard is stricter than that of the United States. After the policy takes effect, it will only be able to produce mixed flavors with tobacco flavor as the main tone. We expect that the R & D barriers of e-cigarette flavor will be greatly improved in the future; (2) Herbal and open smoke are prohibited. Atomized smoke should contain nicotine and have a closed structure. Herbal cigarettes without nicotine content and open electronic cigarettes are prohibited; (3) Private enterprises in the wholesale sector may not be able to participate, and the Administrative Measures stipulate that enterprises that have obtained the tobacco monopoly wholesale license may engage in e-cigarette wholesale after changing the scope with approval. It is expected that the wholesale link will implement the scope change system without opening the application for new licenses, and private enterprises will not be unable to obtain e-cigarette wholesale licenses and participate in the wholesale link; (4) The retail link will accelerate the transformation from monopoly stores to collective stores. The Management Measures stipulate that the subjects engaged in retail business and obtained the tobacco monopoly retail license shall not exclusively operate the listed e-cigarette products. It is expected to accelerate the transformation of e-cigarette stores into collection stores, which will have a certain impact on the channel advantages of head brands; (5) The export pattern has not changed, and the Administrative Measures stipulate that export-oriented enterprises need to comply with the laws, regulations and standards of the exporting country. The supervision has no other requirements for products exclusively for export except packaging, and the export pattern has not changed. Taken together, It is expected that after the tightening of the policy, China’s e-cigarette (in the medium term, the growth center of the market has moved down, but the export pattern has not changed. In the long run, it is expected that under the guidance of policies, e-cigarettes will return to the right direction of targeting smokers and transforming cigarette substitution into the core demand. It is expected that under the main tone of harm reduction + scientific and technological innovation, the long-term penetration rate will continue to increase. In terms of barriers, the industry access threshold and the difficulty of R & D and innovation are expected to be great The current leading enterprises are expected to benefit in the long term.
[catalytic section]: enter the safety section and wait for the valuation signal. The central bank cut interest rates + monetary policy actively released a loose signal. With the gradual release of real estate credit risk and the improvement of superimposed financing, the valuation of the home sector is expected to be repaired. It is suggested to give priority to companies with strong ability to bring high growth through channel reform and category expansion under the current industry background.
[papermaking sector]: pay attention to the profit improvement brought by the implementation of this round of price increase of pulp and paper series. This round of price increase of pulp and paper series has the dual support of demand and raw materials. Among them, the demand side suggests paying attention to the high boom of white card export orders and the continuous release of cultural paper publishing orders; The wood pulp at the raw material end is now linked with the strong operation of pulp price, and the cost side strongly supports the rise of paper price. In addition to bulk paper, the prices of high prosperity special paper such as food card, grasin paper and decorative base paper have also been raised recently. Compared with bulk paper, special paper has double barriers at the production and sales end, and the implementation of price increase is expected to be better under the direct selling mode.
[jewelry and diamond]: the crisis between Russia and Ukraine intensifies the shortage of natural diamond supply, cultivating diamond or accelerating penetration. Gold jewelry: the recent geopolitical risks in Russia and Ukraine have driven the gold price higher, but we believe that gold jewelry is a consumer product with investment attribute, which is still the logic of consumer goods. The mild rise period of gold price is conducive to strengthening consumers’ expectation of gold jewelry preservation and terminal sales. The short-term boom is high. Jewelry consumption has been strong during holidays such as new year’s day, Spring Festival and Valentine’s day since the beginning of the year. Superimposed with intensive brand marketing, terminal consumption has a good year-on-year growth trend; Medium and long-term supply and demand changes, both sides of the industry supply and demand have changed. (1) On the demand side, the increase in the proportion of Yueji consumption has led to the extension of jewelry consumption scene and the increase in consumption frequency, resulting in the growth of jewelry consumption; In terms of price, new consumer groups have increased their recognition of national style culture, which is reflected in the increasing willingness to pay for gold jewelry processing fees. The process of superimposed gold jewelry has changed from the original full gold to 3D, 5g and ancient French gold. The upgrading of process has brought about the increase of price; (2) On the supply side, the industry presents a brand trend, the head brand continues to sink, the market share is harvested, and the industry concentration is improved.
Cultivation of diamond: the recent Russian Ukrainian crisis restricts the export of Russian natural diamond. Russia’s natural diamond production accounts for about 30% of the world’s total and its reserves account for about 60% of the world’s total. We believe that this incident exacerbates the insufficient supply of natural diamonds and is conducive to the cultivation of diamond penetration. Price rise on the supply side: the price of natural rough diamonds has been rising since the epidemic in 2020. In recent months, it has been transmitted to the price rise of finished diamonds, mainly due to insufficient supply; In the longer term, the total reserves of natural drilling in the world are limited (about 1.8 billion carats), which is constrained by the ceiling. Therefore, under the background of insufficient supply of natural drilling, we are optimistic about the accelerated penetration after cultivating drilling; At present, the cultivated diamond products are also in short supply and rising prices. Take Henan Liliang Diamond Co.Ltd(301071) as an example. At present, the products of Henan Liliang Diamond Co.Ltd(301071) are only supplied to five or six major companies. After raising the price of medium and low-end products by 10% in November last year, the company raised the price of full-grade products by 10% in January this year. At the same time, the company accelerated the expansion of production capacity and increased equipment, all of which are used to produce and cultivate diamonds. The company expects the growth of production scale this year to be no less than 50%. Continuous verification of demand outlook: in January, the import and export data of India’s cultivated drill maintained a high growth year-on-year, and the prosperity of cultivated drill demand was continuously verified. This year, xiaobaiguang and other Chinese diamond brands will accelerate the expansion of stores, which is conducive to accelerating the cultivation of consumers.
Investment advice
The paper sector continues to recommend [ Quzhou Wuzhou Special Paper Co.Ltd(605007) ]. The production and sales advantages of the company complement each other and have strong competitiveness α Property, the food card has a high outlook under the background of plastic ban and high growth of new business. It is expected that the company will enter the stage of quarterly growth. [ Shandong Sun Paper Co.Ltd(002078) ], the price of cultural paper has been raised recently. The company has the advantage of Forest Pulp paper integration, and its profitability is expected to be improved. It is suggested to pay attention to [ Shandong Bohui Paper Industry Co.Ltd(600966) ]. The company is the leader in the white card industry and accounts for the highest proportion of white card business. It is expected to fully benefit from the performance elasticity brought by the recovery of the market. Highlight Shantou Wanshun New Material Group Co.Ltd(300057) , lithium battery aluminum foil is put into operation in the high boom window period, and is still in the valuation depression in the industrial chain. The current market has poor expectations, and the bottom is firmly recommended.
In the home sector, it is suggested to pay attention to the customized home leader [ Oppein Home Group Inc(603833) ], with the continuous high growth of packaging revenue, and continue to strengthen the front-end traffic entrance under the background of the differentiation of home consumption traffic. At present, the business model of new channels is gradually smoothed out. Software home continues to recommend Jason Furniture (Hangzhou) Co.Ltd(603816) , and it is recommended to pay attention to Minhua holdings Jason Furniture (Hangzhou) Co.Ltd(603816) channel reform has been gradually implemented to achieve performance. Based on the original strong sofa channel, new categories such as mattresses and customized homes have begun to increase; Minhua holdings is in the stage of continuously opening stores at a high speed in the domestic sales channel, and its market share and performance are in a strong upward channel. There is still much room for improvement in the medium and long-term functional sofa penetration.
It is suggested that jewelry and diamond focus on [Chow Tai Fook], which has brand and product advantages in the first and second tier markets and accelerates the expansion of stores in the low tier market, and [ Chow Tai Seng Jewellery Company Limited(002867) ] which accelerated the opening of stores after the provincial representative model was launched in Q3 last year. [ Guangdong Chj Industry Co.Ltd(002345) ] to create a fashionable design brand and expand its franchise channels. At the same time, it is suggested to pay attention to the first three cultivated drill manufacturers, [ Henan Liliang Diamond Co.Ltd(301071) ], [ Henan Huanghe Whirlwind Co.Ltd(600172) ], [ North Industries Group Red Arrow Co.Ltd(000519) ], and it is expected that the new capacity of the three companies will be released continuously this year.
Risk tips
The economic growth is less than expected, resulting in the decline of purchasing power; The epidemic situation is repeated, and the offline retail is not as expected; Brand building is less than expected.
