Zhou’s view: 1) home furnishing: under the background of the continued weak industry boom and the recent frequent outbreaks in various countries, maintain the view that the home furnishing sector is low in the first place and high in the second place throughout the year. We don’t think we need to be overly pessimistic about the impact of the epidemic: first of all, as a necessary consumption in the decoration link, the impact of the epidemic will only be delayed and will not disappear. In the follow-up, if the epidemic eases, orders are still expected to pick up. Secondly, the epidemic acceleration leader has comprehensively improved the number of customers and the ability to build customer single value. Listed companies have actively developed online drainage and multi-channel cooperation to deal with the impact of offline passenger flow, and promoted more whole packages to make large single value, which has a significant effect. We believe that although the epidemic has affected some consumption degradation, the household leader is expected to partially alleviate the consumption degradation impact of single products through multi category expansion. Therefore, the consumption degradation effect of the epidemic on household is expected to be more reflected in “spending less money to buy more and better products”. Under the background of the epidemic in 2020, the household leader has achieved a rapid increase in customer unit value through package marketing, and there is expected to be room in the future. Due to the recent correction in the valuation of the sector, the leader has entered a reasonable value distribution range. It is suggested to pay attention to Oppein Home Group Inc(603833) (22-year PE 21x), Jason Furniture (Hangzhou) Co.Ltd(603816) (22-year PE 18x), Suofeiya Home Collection Co.Ltd(002572) (22-year PE 12x), Zbom Home Collection Co.Ltd(603801) (22-year PE 12x) and Minhua Holdings (22-year PE 11x). 2) Papermaking: the overall price of paper is stable this week. The packaging paper leader recently announced a price increase of 50-300 yuan / ton. Following the shutdown and production restriction of Shanying and Liwen in April, nine dragons also issued a shutdown letter on March 21. The double glue and coated paper leaders plan to increase the price by 300 yuan / ton in April. In the paper sector, it is suggested to pay attention to Shandong Sun Paper Co.Ltd(002078) (22 years PE 9x), Shanying paper (22 years PE 6x), and the leader of decorative base paper subdivision Hangzhou Huawang New Material Technology Co.Ltd(605377) (22 years PE 12x). 3) Packaging & Printing & new type tobacco: the paper packaging sector is recommended to pay attention to Shenzhen Yuto Packaging Technology Co.Ltd(002831) (22-year PE 14x) and the subsequent month on month improvement of fundamentals & the valuation is at the bottom of history. This week, the pilot of the detailed rules of e-cigarette management measures has been promoted. The first batch of pilot cities are Huizhou City, Guangdong Province and Xiamen City, Fujian Province. It is expected to be implemented in the form of collection stores. Considering the impact of the industry and the epidemic situation, it is expected that there is still a certain buffer period for the impact of e-cigarette standards on China’s demand, which will benefit the industry leaders for a long time. It is recommended to pay attention to Shenzhen Jinjia Group Co.Ltd(002191) (22 years PE 16x). 4) Household personal consumption: continue to be optimistic about Shanghai M&G Stationery Inc(603899) (22-year PE 26x). The barriers of traditional core business channels are stable & the expectation is improved month on month. The new business model is gradually mature and the profitability is expected to gradually rise in the future.
The light industry manufacturing sector performed slightly better than the market this week (March 21-march 25, 2022). This week, the light industry manufacturing industry index fell by 1.5%, and the Shanghai and Shenzhen 300 index fell by 2.1%. The overall performance is better than the market. In the light industry manufacturing segment, the packaging and printing industry index was – 0.7%, the entertainment industry index was – 0.2%, the household goods industry index was – 2.1%, and the paper industry index was – 2.1%.
Household: the price of raw materials and sea freight picked up this week. In the past week as of March 26, 2022, in terms of chemical raw materials, the market prices of TDI, MDI and polyether were + 0.5%, – 3.0% and + 2.1% respectively month on week. In terms of hardware raw materials, copper prices were + 1.8% month on month (MOM) last week. The high level of sea freight has rebounded. This week, CCFI: the sea freight of the US west route is + 2.0% higher than that of last week.
Papermaking: the price of various kinds of paper remained stable and the pulp price remained high this week. The past week as of March 26, 2022: the price of double adhesive tape, Shandong Chenming Paper Holdings Limited(000488) 7000 yuan / ton (unchanged), Shandong Sun Paper Co.Ltd(002078) 6700 yuan / ton (unchanged); ; Coated paper price, Shandong Chenming Paper Holdings Limited(000488) 6800 yuan / ton (unchanged), Shandong Sun Paper Co.Ltd(002078) 6500 yuan / ton (unchanged). Dongguan Jiulong Dilong Dongguan Jiulong corrugated paper 4390 yuan / ton (unchanged), kraft carton board 4730 yuan / ton (unchanged). In terms of cost, as of March 26, 2022, the purchase price of Tianjin Jiulong waste yellow paperboard was 2190 yuan / ton (unchanged), the price of Brazilian goldfish broad-leaved pulp was 680 US dollars / ton (unchanged), the price of Chilean Silver Star coniferous pulp was 990 US dollars / ton (up 100 yuan / ton), and the pulp futures price was 6782 yuan / ton, a month on month increase of – 0.64% last week.
Packaging: the price of tinsector is stable, and the price of aluminum rises slightly. As of March 26, 2022, this week’s tinsector Tianjin Furen spcc0 The price of 18 900 tinsector coil is 8450 yuan / ton (unchanged), and the price of A00 aluminum is 22962 yuan / ton (up 964 yuan / ton), with a slight increase.
Risk factors: the risk of decline in real estate sales and the risk of sharp rise in raw material costs.
