Key investment points:
Market review of this week: SW light industry manufacturing industry outperformed Shanghai and Shenzhen 300 this week. From December 27 to December 31, 2021, SW light industry manufacturing industry index rose by 4.32%, ranking the fourth among all Shenwan industry indexes; Outperformed the CSI 300 index by about 3.93 percentage points over the same period. All secondary sub industries recorded positive earnings. SW packaging and printing, SW household products, SW entertainment products and SW papermaking rose 6.56%, 4.56%, 3.51% and 1.56% respectively, outperforming the Shanghai and Shenzhen 300 index. Over 80% of the stocks in the industry recorded positive returns.
Key industry news: (1) recently, the State Council Information Office held a regular policy briefing on the implementation of the 14th five year plan for promoting agricultural and rural modernization, encouraged qualified areas to carry out rural household appliance renewal, implemented furniture and home decoration subsidies and a new round of automobile to the countryside, and promoted the upgrading of durable consumer goods for rural residents. However, the furniture subsidy policy to the countryside is based on the high popularity of home appliances and furniture in rural areas of China, and more supports consumers to “update” and “replace” furniture. (2) China Light Industry Federation recently announced the economic operation of China’s light industry in the first October: from January to October, there were 112000 Enterprises above Designated Size in the light industry, with a cumulative operating revenue of 17.84 trillion yuan, a year-on-year increase of 15.2%; The profit was 1074.22 billion yuan, a year-on-year increase of 7.3%, and the profit margin of the industry’s operating revenue reached 6.0%. China Light Industry Federation said that on the whole, driven by the demand of consumer markets outside China, the economy of the light industry has shown a restorative growth trend since this year. Exports increased significantly. According to the statistics of the General Administration of customs, the export of household appliances, plastic products and furniture continued to remain strong. (3) On December 29, 2021, the A-share paper sector rose again due to the announcement of price increase letters issued by many paper enterprises. After nine dragons announced the shutdown plan in November, Shanying paper and Dongguan Jinzhou also issued shutdown notification letters in December. In addition to downtime, recent price adjustments are also frequent: since January 1, 2022, the price of all products produced by Ningbo Asia Pulp and Paper Co., Ltd. and Guangxi Jingui pulp and Paper Co., Ltd. has increased by 200 yuan / ton (including tax); From January 1, 2022, the price of all kinds of paper and gram weight paper products produced by Jindong and Jinhai will be increased by 200 yuan / ton (including tax) on the basis of December 2021. In addition, Chenming, Taiyang and Bohui have also issued price increase notices.
Recommended rating for the industry for the first time. Recently, the national development and Reform Commission encouraged “furniture to the countryside”. In the short term, the furniture to the countryside policy is expected to promote the penetration and consumption upgrading of furniture in rural areas, and promote the steady growth of the industry; In the long run, the overall performance of the household industry deviates from the valuation, and the valuation repair market is expected to usher in 2022. It is suggested to pay attention to the brand leaders in the household industry: Jason Furniture (Hangzhou) Co.Ltd(603816) (603816), Oppein Home Group Inc(603833) (603833), Suofeiya Home Collection Co.Ltd(002572) (002572) and Qumei Home Furnishings Group Co.Ltd(603818) (603818), etc. In addition, it is recommended to pay attention to Anhui Genuine New Materials Co.Ltd(603429) (603429), Huabao Flavours & Fragrances Co.Ltd(300741) (300741) of the packaging and printing plate.
Risk tips: covid-19 epidemic continues to repeat, industry competition intensifies, real estate prosperity is less than expected, downstream demand is less than expected, raw material price fluctuation, tobacco policy risk, exchange rate fluctuation intensifies and other risks.
