Key investment points:
Market review of this week: SW light industry manufacturing industry outperformed Shanghai and Shenzhen 300 this week. From January 4 to January 7, 2022, 41.94% of Shenwan class industries recorded positive earnings; SW light manufacturing industry index fell 0.18%, but outperformed the CSI 300 index by about 2.20 percentage points over the same period. Half of the secondary sub industries recorded positive earnings, with SW paper and SW household products rising by 1.52% and 0.98% respectively; The remaining half of the secondary sub industries recorded negative returns, with SW entertainment products and SW packaging and printing down – 0.74% and – 3.01% respectively. Over 50% of the stocks in the industry recorded positive returns.
Key industry news: (1) the National Bureau of Statistics announced the profits of national industrial enterprises above Designated Size from January to November 2021. According to the data, the total profit of papermaking and paper products industry was 77.88 billion yuan, a year-on-year increase of 13.9%; The printing and recording media reproduction industry realized a total profit of 36.16 billion yuan, a year-on-year decrease of 2.5%. In terms of operating income, the paper and paper products industry realized an operating income of 1350.25 billion yuan, a year-on-year increase of 15.4%; The printing and recording media reproduction industry realized an operating revenue of 658.07 billion yuan, a year-on-year increase of 10.4%. (2) The leading paper enterprise app (golden light paper) recently sent three price increase letters, announcing that the prices of some paper products will be increased from January 1, 2022. Shandong Chenming Paper Holdings Limited(000488) , Shandong Bohui Paper Industry Co.Ltd(600966) followed closely and issued price increase notices one after another. China Securities Journal reporter learned from some paper enterprises that the reasons for this round of paper price rise are, on the one hand, the rise in the price of raw material pulp and freight, and, on the other hand, the increase in downstream demand. As far as the current paper price is concerned, it has not yet rebounded to the high point at the beginning of this year. (3) In 2020, the profit margin of China’s metal packaging industry was 4.99%, up 0.88% from 4.11% in 2019. In the first half of 2021, the cumulative operating revenue profit margin of metal packaging container manufacturing industry was 4.15%, with a year-on-year increase of 0.84%. (4) A few days ago, the report on consumption trend of Chinese residents: new ten lines and new life in the new decade pointed out that great changes are taking place in the consumption structure of Chinese residents. Combined with consumers’ consumption attitude in the coming year, it summarized five themes: healthy c-position, agreeing to lie flat, pleasing oneself and others, lazy technology and sharing and entertainment. Integrating these five themes into the consumption of the home market at this stage can predict the consumption trend of the home industry in the next decade.
Maintain recommended ratings for the industry. Recently, a number of paper enterprises have issued price increase letters, and the leading paper enterprises have a strong willingness to raise prices. The current round of paper price rise is mainly due to the rise of raw material pulp price and freight, the increase of downstream demand and other factors. However, in terms of the current paper price, the current paper price has not yet rebounded to the high point at the beginning of this year, and the downstream demand still needs to be strengthened. It is suggested to pay attention to the leading paper enterprises of China’s wood pulp Department: Shandong Sun Paper Co.Ltd(002078) (002078), Shandong Bohui Paper Industry Co.Ltd(600966) (600966), Shandong Chenming Paper Holdings Limited(000488) (000488), and the leading waste paper company: Shanying International Holdings Co.Ltd(600567) (600567). In addition, it is recommended to continue to pay attention to high-quality companies in the home sector: Oppein Home Group Inc(603833) (603833), Suofeiya Home Collection Co.Ltd(002572) (002572), Jason Furniture (Hangzhou) Co.Ltd(603816) (603816), Qumei Home Furnishings Group Co.Ltd(603818) (603818), etc.
Risk tips: covid-19 epidemic continues to repeat, industry competition intensifies, real estate prosperity is less than expected, downstream demand is less than expected, raw material price fluctuation, tobacco policy risk, exchange rate fluctuation intensifies and other risks.
