Report released this week
Comments on social zero data: optional and mandatory consumption shows resilience, waiting for consumption recovery after the epidemic
Comments on North Industries Group Red Arrow Co.Ltd(000519) 2021 annual report: the profit attributable to the parent company is 485 million yuan, the superhard materials still maintain a high boom, and the profitability continues to improve
Bloomage Biotechnology Corporation Limited(688363) comments: holding natural collagen, representing Yierkang, officially entering the collagen industry and improving the layout of medical terminals
Comments on the first quarterly report of Beijing United Information Technology Co.Ltd(603613) 2022: net profit attributable to parent + 98.9% exceeded the upper limit of the notice, and the operating cash flow improved month on month
Industry view of this week (this week refers to April 11 to April 15, 2022, the same below)
In March 2022, China’s total retail sales were – 3.5% year-on-year, which was undoubtedly impacted by the rebound of the epidemic. What changes have taken place in the sub item data of social zero under the epidemic situation and how will it be recovered later?
Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consumption was impacted, and the demand for dining out decreased. In March, China’s online retail sales of physical goods were + 2.7% year-on-year and offline retail sales were – 5.5% year-on-year. The year-on-year growth rate of online and offline goods slowed down by 9.6pct/10.5pct respectively from January to February, both of which were seriously impacted. In offline consumption, the catering industry is more affected. In March 2022, the catering revenue was – 16.4% year-on-year. Residents reduced dining out and chose to buy more ingredients to cook at home.
The consumption of grain, oil, food, medicine and other necessities shows resilience. Due to the increase in demand for cooking at home and residents’ demand for goods during the epidemic, grain, oil and food still maintained a high growth rate in March. As varieties with high consumption frequency and rigid demand, grain, oil, food and drugs have always been relatively resilient. They also maintained a high growth rate during the rebound of the epidemic in the second half of 2021.
Consumer demand for daily necessities was delayed. The purchase frequency of daily necessities of residents is significantly lower than that of food. During the epidemic period, the household reserves are generally consumed. From November to December 2021, after the epidemic improves, residents will gradually start to supplement the reserves of daily necessities. In 2022, if the national epidemic can be basically controlled before June, the demand for daily necessities is expected to be released in the middle of the shopping season.
Cosmetics, jewelry, household appliances and other optional consumption are greatly affected by the epidemic, and the recovery speed after the epidemic is relatively fast. The impact of these categories is more reflected in the pace of consumption, especially cosmetics. From the perspective of longer time cycle (such as year or quarter), the demand toughness is good. In March 2022, the year-on-year growth rate of retail sales of these categories was greatly affected. During the epidemic in August 2021, the consumption of these categories was also greatly affected, and then recovered quickly from September to October.
Investment suggestion: look forward to the recovery of optional consumption and travel after the epidemic improves. Judging from the new cases in Japan, the epidemic situation in Shanghai is constantly improving. The epidemic has affected the consumption rhythm of some optional products, which is expected to recover rapidly after the epidemic. At present, many targets in the consumer industry are at a low valuation, which deserves special attention.
Recommended target: China Tourism Group Duty Free Corporation Limited(601888) , medical beauty & cosmetics industry leader Proya Cosmetics Co.Ltd(603605) , Yunnan Botanee Bio-Technology Group Co.Ltd(300957) , Imeik Technology Development Co.Ltd(300896) , Bloomage Biotechnology Corporation Limited(688363) , etc. benefiting from travel recovery.
Risk warning: repeated epidemic situation; The prosperity of terminal consumption decreased; Intensified market competition, etc.
