Market last week: light industry manufacturing sector index fell. From March 7, 2022 to March 11, 2022, the Shanghai Composite Index fell 4.00%, the Shenzhen Component Index fell 4.40%, and the light industry manufacturing index fell 4.57%, ranking 15th among the 28 Shenwan industries; The rise and fall of light industry manufacturing index sub sectors from high to low are: papermaking (- 3.57%), packaging and printing (- 3.79%), household light industry (- 5.98%).
Furniture: combing the government work report and the increment of home demand brought by the transformation of old residential areas, we are optimistic about the acceleration of retail under the whole strategy, with Suofeiya Home Collection Co.Ltd(002572) . According to the government work reports over the years, from 2019 to 2021, 18000, 40300 and 55600 old residential areas were actually newly renovated, and the scale of old residential areas and policy support continued to improve. According to the estimation of the construction period of 2-3 years, the demand released from the old transformation from 2022 is equivalent to 43% of the number of residential units sold in the same period, and the incremental contribution can be expected. Since 2021q2, the order growth rate of head household enterprises and real estate sales data have continued to differentiate, and the demand for stock renovation has continued to be verified. In the follow-up, the marginal easing of real estate policy is expected to increase under steady growth, and the valuation of furniture sector has great room for repair. Continue to recommend [ Suofeiya Home Collection Co.Ltd(002572) ] management improvement and retail under the whole strategy is expected to accelerate; Continue to recommend [ Oppein Home Group Inc(603833) ], the pioneer of retail reform, the increasingly clear route of big home [ Jason Furniture (Hangzhou) Co.Ltd(603816) ] and the functional sofa leader [Minhua holdings] with low valuation. It is recommended to pay attention to [ Zbom Home Collection Co.Ltd(603801) ], [ Goldenhome Living Co.Ltd(603180) ]. In terms of export, we recommend [ Healthcare Co.Ltd(603313) ] where the dilemma can be reversed and the scarcity of us production capacity layout can be realized gradually under anti-dumping. We suggest paying attention to [ Zhejiang Walrus New Material Co.Ltd(003011) ] where production capacity release drives high income growth and strong bargaining power.
E-cigarette: the e-cigarette management measures were issued, and the annual report of fog core technology was disclosed. The measures for the administration of e-cigarettes were issued on Friday, adding 1) prohibition of flavoring e-cigarettes and 2) prohibition of exclusive operation of retail channels compared with the draft for comments. For taste restrictions, we believe that: 1) the core advantages of e-cigarette lie in its harm reduction attribute and the user stickiness brought by nicotine, which have a short-term impact on the demand of the industry, but taste restrictions help the industry return to the origin of cigarette replacement function and bring long-term benign development; 2) With the improvement of brand research and development on tobacco taste, its reduction degree, richness and sense of experience will be significantly improved, and the conversion rate of smokers and the taste blending threshold of the brand will be improved. 3) For the stock users, when there is no choice of fruit taste for traditional tobacco and other products, the harm reduction and convenience of e-cigarettes still have great advantages, and there will still be a certain customer retention rate. According to the CDC data of the United States, before and after the introduction of the taste ban, the overall sales volume of e-cigarettes in the United States decreased from 22 million per month in August 2019 to 17.1 million in May 2020, and then the monthly sales volume showed a recovery growth. During the period from August 2019 to may 2020, the proportion of menthol in the sales volume of cartridge change e-cigarettes increased from 10.7% to 61.8%, and the taste of tobacco increased from 22.8% to 37.1%; The proportion of disposable e-cigarettes in the sales of atomized e-cigarettes increased from 10.3% to 19.8%. The taste ban may have a certain impact on demand in the short term, but the trend of increasing penetration in the medium and long term will continue. On the channel side, the prohibition of exclusive operation and the inclusion of e-cigarettes into the scope of tobacco monopoly license may lead to a large number of closure of existing monopoly stores, but the supplement of traditional tobacco channels is expected to significantly increase the total number of stores, which is conducive to the continuous improvement of penetration, and the head brand is expected to continue to maintain the advantages of user number and brand. The administrative measures will be officially implemented from 5.1. There are no clear provisions on the administrative measures for taxation of e-cigarettes, and the follow-up will be further clarified. On March 11, 2022, fogcore technology announced its annual performance in 2021. In 2021, the company's net income was RMB 8.521 billion, a year-on-year increase of + 123.1%, and the net profit of non GAAP was RMB 2.252 billion, a year-on-year increase of + 181%.
Papermaking: the price of pulp continues to rise. We recommend Shandong Sun Paper Co.Ltd(002078) , and pay attention to the subdivision leader of decorative base paper. As of March 11, the price of wood pulp was 7300.9 yuan / ton, up 391 yuan / ton on a weekly basis. The price of double offset paper was 6175 yuan / ton, with a weekly increase of 63 yuan / ton. The conflict between Russia and Ukraine intensifies the rise of pulp. At the same time, cultural paper is expected to continue the price increase in the peak season, and continue to recommend [ Shandong Sun Paper Co.Ltd(002078) ] with high pulp self-sufficiency rate. The demand for decorative base paper is improving. This week Hangzhou Huawang New Material Technology Co.Ltd(605377) , Xianhe Co.Ltd(603733) , Qifeng New Material Co.Ltd(002521) all issued price raising letters, which is expected to maintain high profitability. It is suggested to pay attention to [ Hangzhou Huawang New Material Technology Co.Ltd(605377) ], [ Xianhe Co.Ltd(603733) ].
Risk tip: the power rationing policy affects the production capacity, the price fluctuation of raw materials, the intensification of Sino US trade friction, etc.
