Core view
Big market review. In the first two weeks of April, the top five companies in the A-share light industry sector were Shandong Sun Paper Co.Ltd(002078) , Suofeiya Home Collection Co.Ltd(002572) , Oppein Home Group Inc(603833) , Shantou Dongfeng Printing Co.Ltd(601515) , Xiamen Hexing Packaging Printing Co.Ltd(002228) . In the first two weeks of April, the top five companies in the light industry sector of Hong Kong stocks were blue moon group, Tongfang Youyou, Zhisheng Group Holdings, Shuncheng and Nine Dragons Paper. 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.
The PPI at the manufacturing end remained stable, and the growth of furniture exports accelerated. In March, the year-on-year growth rate of PPI in furniture manufacturing industry and papermaking and paper products industry slowed down: in March, the PPI in furniture manufacturing industry increased by 1.6% year-on-year, with a growth rate of – 0.3% compared with the previous month, and the chain is basically the same; The PPI of papermaking and paper products increased by 0.7% year-on-year, with a growth rate of – 2.4% compared with the previous month, and was basically flat month on month. In March, the year-on-year growth of furniture exports accelerated, while the growth of pulp paper and its products slowed down: in March, the export of furniture and its parts increased by 7.1% year-on-year, with a growth rate of +18.2% over the previous month; The export volume of pulp, paper and its products increased by 0.2% year-on-year, with a growth rate of – 19.7% over the previous month.
Pulp and paper prices basically stabilized. The wood pulp market fluctuated and stabilized. This week, the price of outer pulp stabilized, while the price of inner broad-leaved pulp fell year-on-year. In terms of cultural paper, the increase was gradually implemented due to the upward impact of pulp cost. The supply and demand pressure of double offset paper continued to increase, and the market price rose slightly in a stable manner. Affected by the epidemic, printing plants in many places across the country are under operated, the delivery and logistics are limited, and the transaction is relatively low. Supplementary teaching materials have just started to be supplied through bidding, and social demand has decreased. After the price increase of the paper mill, the dealers and terminal printing factories are less willing to accept the price increase. In terms of packaging paper, the market supply and demand 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. Hengan international, Chongqing Baiya Sanitary Products Co.Ltd(003006) , blue moon group, Suofeiya Home Collection Co.Ltd(002572) , Chenguang shares, Gongniu Group Co.Ltd(603195) SIMORE international, etc. issued annual reports Jason Furniture (Hangzhou) Co.Ltd(603816) some dealers have completed the second phase of the shareholding increase plan; Tmall home improvement local service unites 49 key home improvement brands such as Wrigley, europay, Dongpeng, Suofeiya Home Collection Co.Ltd(002572) , nature, Guangdong Piano Customized Furniture Co.Ltd(002853) , Guangzhou Holike Creative Home Co.Ltd(603898) , MAG, etc; The sales volume of Red Star Red Star Macalline Group Corporation Ltd(601828) 315 increased greatly.
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, and focuses on Oppein Home Group Inc(603833) , Suofeiya Home Collection Co.Ltd(002572) ; The household goods sector is optimistic about the marginal improvement opportunities of consumption recovery and cost pressure, and focuses on Chenguang shares and Chongqing Baiya Sanitary Products Co.Ltd(003006) ; The paper packaging sector is optimistic about the opportunity of stabilizing the cost pressure and improving the concentration of the leading enterprises, and it is recommended that Shandong Sun Paper Co.Ltd(002078) ; The tobacco sector is optimistic about medium – and long-term growth opportunities, focusing on Smallworld.
Risk warning: repeated impact of epidemic situation; Real estate construction continued to decline; The competition pattern of the industry has deteriorated.
