Key points
Review of retail market:
In the past week (five trading days), the Shanghai Composite Index and Shenzhen Component Index rose by – 1.19% and – 2.08% respectively, and the retail trade (CITIC) index rose by 1.73%, outperforming the Shanghai Composite Index and Shenzhen Component Index.
Since 2022 (54 trading days), the Shanghai Composite Index and Shenzhen component index have increased by – 11.75% and – 18.74% respectively, and the commercial retail (CITIC) index has increased by – 9.82%, outperforming the Shanghai Composite Index and Shenzhen Component Index.
In the past week, the trade and retail industry increased by 1.73%, ranking fifth among the 29 CITIC first-class industries. In the past week, nine of the 29 CITIC’s primary industries rose. The top three industries were coal, agriculture, forestry, animal husbandry and fishery and real estate, with increases of 5.81%, 4.00% and 3.89% respectively. Since 2022, the trade and retail industry has increased by – 9.82%, ranking 11th among the 29 CITIC first-class industries. Since 2022, one of the 29 CITIC first-class industries has risen. The top three industries are coal, real estate and banking, with an increase of 18.52%, – 0.84% and – 1.40% respectively.
In the past week, the top three sub industries in the retail sector were gold jewelry, 3C chain of household appliances and professional market, with an increase of 1.91%, 1.77% and 1.28% respectively. Since 2022, among the sub industries in the retail sector, the top three sub industries are professional markets, trade and supermarkets, with increases of – 3.52%, – 5.45% and – 8.23% respectively.
In the past week, 66 of the 93 major listed companies in the retail industry (excluding the first listed companies in 2021) rose and 27 fell. Over the past week, the top three companies were Shanghai Material Trading Co.Ltd(600822) , Baida Group Co.Ltd(600865) and cross-border communication, with increases of 13.76%, 13.48% and 13.00% respectively. Since 2022, among the 93 major listed companies in the retail industry (excluding the first listed companies in 2021), 35 companies have increased, 3 companies have remained unchanged and 55 companies have decreased. Since 2022, the top three companies are Beijing Cuiwei Tower Co.Ltd(603123) , Renrenle Commercial Group Co.Ltd(002336) and Baida Group Co.Ltd(600865) , with an increase of 123.93%, 48.30% and 36.52% respectively.
Retail industry investment strategy:
We believe that the repeated epidemic in March will have a significant impact on offline physical retail, especially in first tier cities such as Shanghai and Shenzhen, which may lead to the downward revision of the performance of retail enterprises in the first quarter of 2022. By sector, the supermarket sector has benefited relatively during the repeated epidemic, but there may also be a dilemma of increasing income without increasing profits. We are still optimistic about the gold jewelry sector, mainly due to the strong gold price, but the impact of the epidemic on offline sales will also have a certain negative impact on the gold jewelry sector. Overall, we believe that the recovery of consumer goods may be postponed to 3q2022 or 4q2022 due to the impact of the epidemic. In the short term, we are relatively conservative. Suggestions for next week: Shanghai Bailian Group Co.Ltd(600827) , Rainbow Digital Commercial Co.Ltd(002419) , Lao Feng Xiang Co.Ltd(600612) , Guangdong Chj Industry Co.Ltd(002345) , Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) , JD.
Risk analysis:
The growth rate of residents’ consumption demand did not meet expectations, the post real estate cycle affected the income growth of some sub industries, and the impact of channel reform on the existing business model was higher than expected
