Key investment points:
Market review this week: SW light industry manufacturing industry outperformed Shanghai and Shenzhen 300 this week. From March 21 to March 25, 2022, 32.26% of shenwanyi industry recorded positive earnings; SW light manufacturing industry index fell 1.52%, outperforming the CSI 300 index by about 0.62 percentage points in the same period. All secondary sub sectors of SW light industry manufacturing recorded negative returns, with SW entertainment products, SW packaging and printing, SW papermaking and SW household products falling by 0.23%, 0.67%, 2.06% and 2.12% respectively. Forty percent of the stocks in the industry recorded positive returns.
Key news of the industry: (1) from January to February 2022, despite the impact of the Spring Festival holiday, the price of white cardboard remained rising. In February, the average price of 250400g white cardboard was 6381 yuan / ton, up 1.1% month on month; In March, the average price of white cardboard was 6543 yuan / ton, up 2.5% month on month. (2) In the first quarter of 2022, the whiteboard market was first restrained and then increased. At the beginning of January, the whiteboard market was weak and downward. On January 7, Tianjin paper factory lowered the factory price of whiteboard by 150 yuan / ton, and the quotations of other paper enterprises were mainly stable. In the first ten days of February, the shutdown or production reduction of whiteboard paper enterprises was relatively concentrated. After February 7, they resumed work and production one after another. There was no obvious improvement in terminal demand after the festival. In the second ten days, the quotation of small and medium-sized paper enterprises decreased and the profit space narrowed. In March, the whiteboard market showed an upward trend. In March, due to the rise in the price of raw and auxiliary materials and the increase in costs, whiteboard enterprises frequently sent letters of price rise. (3) Recently, a number of real estate related policies have been issued, and many ministries and commissions have also jointly stated their positions to clarify the signal of “stabilizing real estate”. In addition, the extension of the pilot of real estate tax has also improved market expectations. Due to the continuous favorable policies, the real estate sector has ushered in a continuous rise recently. As of about 13:30 on March 22, the sector index has increased by nearly 17% in the past week.
Maintain the recommended rating of the industry. (1) In the papermaking sector, in the first quarter of 2022, China’s Whiteboard market was first depressed and then increased. In March, whiteboard enterprises frequently raised prices due to the rise of raw material prices. However, China’s demand for white board paper is mainly rigid demand, and there is no obvious increase in terminal demand. The upward price of white board paper faces great resistance. Looking forward to the second quarter, the supply of whiteboard is expected to rise steadily, but with the advent of the off-season in the second quarter, the demand may further weaken and the supply-demand game will intensify. It is suggested to pay attention to the business changes of relevant paper enterprises. (2) In the household goods sector, the recent policy continued to be positive, and the real estate sector recently ushered in a rise. As of 13:30 on March 22, 2022, the sector index has risen by nearly 17% in the past week. As the real estate sector began to pick up, the home sector also showed signs of picking up in recent days. In addition, recently, the United States resumed tariff exemption for some Chinese goods, including light industrial manufactured goods such as household goods. Although the tariff exemption does not restore the fairness between China and the United States, the reduction proportion of light industrial goods exempted from tariffs (such as household goods) is small, and its amount is high. The impact of the additional tariffs on these goods is expected to be weakened. We continue to be optimistic about the valuation and repair market of the home furnishing sector, and suggest paying attention to the high-quality leaders in the industry, such as Jason Furniture (Hangzhou) Co.Ltd(603816) ( Jason Furniture (Hangzhou) Co.Ltd(603816) ), etc.
Risk tips: the prosperity of real estate is less than expected, the covid-19 epidemic continues to repeat, Sino US trade friction, intensified market competition, raw material price fluctuations, macroeconomic policy risks, intensified exchange rate fluctuations and other risks.
