Core view
Big market review. In the first two weeks of March, the top five companies in the A-share light industry sector were Mcc Meili Cloud Computing Industry Investment Co.Ltd(000815) , Shanghai Haishun New Pharmaceutical Packaging Co.Ltd(300501) , Nanjing Olo Home Furnishing Co.Ltd(603326) , Tungkong Inc(002117) , Suzhou Hycan Holdings Co.Ltd(002787) . The top five companies in the light industry sector of Hong Kong stocks were Huangchao home, Qijia holding, Xinchang Chuangzhan holding, Zhongchuang global and Yijia Yipin. The valuation of the light industry sector is basically at a historical low in the past two years. Compared with the valuation of the worst period of China's epidemic in March 2020, the valuation of most of the targets still has a large decline.
Consumer FMCG and consumption categories grew steadily, and PPI at the manufacturing end remained stable. From January to February, social zero increased by 6.7% year-on-year. In the light industry sub industry, the retail sales of cultural office supplies increased by 11.1% year-on-year; Retail sales of daily necessities increased by 10.7% year-on-year; Furniture retail sales were - 6.0% year-on-year. In February, the PPI of furniture manufacturing industry was + 1.9% year-on-year; The PPI of papermaking and paper products industry was + 3.1% year-on-year, and was basically flat month on month.
Pulp and paper prices continued to rise. The disturbance on the supply side continued, the rising trend of pulp price continued, and the price of cultural paper continued to rise driven by cost. As of March 10, the average price of China's pulp was about 5783 yuan / ton, up 3.68% from last week's price; The average spot price of coniferous pulp was 7207 yuan / ton, up 5.1% from last week; The average spot price of broad-leaved pulp was 6186 yuan / ton, up 6.4% from last week. Influenced by the rising cost of pulp, the increase of cultural paper has been gradually implemented. The supply and demand of packaging paper market is temporarily stable, and the mainstream paper enterprises actively publicize the price rise.
The growth rate of real estate transaction construction continued to fluctuate downward trend. On the supply side, the performance of real estate sales, commencement and completion from January to February is still weak. See the situation of the current month specifically: from January to February, the newly started residential area was - 14.9% year-on-year, 18.2% narrower than that in December; From January to February, the completed residential area changed from positive to negative, with a year-on-year increase of - 9.6%; From January to February, the residential sales area was - 13.8% year-on-year, 5.7% lower than that in December.
Company announcement and industry news in light industry sector. On March 11, the state tobacco administration issued the measures for the administration of e-cigarettes (hereinafter referred to as the "measures") and the national standard for e-cigarettes (the second exposure draft), which clearly stipulates that the production and sale of e-cigarettes with other flavors other than tobacco flavors will be prohibited. The home industry is actively preparing for the 315 promotion, and the leading enterprises use live broadcast, short video and other means to accumulate traffic in advance. Since the middle and late February, household enterprises have successively launched cost-effective whole family packages, such as gujia 49800 whole house package, Suofeiya Home Collection Co.Ltd(002572) 39800 whole house customized package, Guangzhou Shangpin Home Collection Co.Ltd(300616) 29800 whole house customized package... From single product competition to multi category and whole house space competition.
Investment suggestion: those who are optimistic about the performance support strong targets are expected to usher in valuation repair. Focus on recommending high-quality leading enterprises with strong performance support and strong long-term growth certainty. Household is optimistic about the opportunity of valuation recovery after the policy risk stabilizes, with emphasis on Oppein Home Group Inc(603833) ; Under the impact of policies, the trend of industry differentiation in the tobacco sector is becoming more and more obvious, and smore international, a leading enterprise, is recommended; The household goods sector is optimistic about the marginal improvement opportunities of consumption recovery and cost pressure in the medium and long term, with emphasis on Shanghai M&G Stationery Inc(603899) , C&S Paper Co.Ltd(002511) ; The paper packaging sector is optimistic about the opportunity of stabilizing the cost pressure and improving the concentration of the leading enterprises. It is recommended that Shandong Sun Paper Co.Ltd(002078) .
Risk warning: repeated impact of epidemic situation; Real estate construction continued to decline; The competition pattern of the industry has deteriorated.
