Key investment points
Market last week: light industry manufacturing sector index fell. From April 18, 2022 to April 23, 2022, the Shanghai Composite Index fell by 3.87%, the Shenzhen Component Index fell by 5.12%, and the light industry manufacturing index fell by 4.40%, ranking 15th among the 28 Shenwan industries; The rise and fall of light industry manufacturing index sub sectors from high to low are household light industry (- 3.99%), packaging and printing (- 5.14%) and papermaking (- 5.68%).
Furniture: the performance has been released one after another, and the leading companies have strong toughness. 1) Oppein Home Group Inc(603833) , Jason Furniture (Hangzhou) Co.Ltd(603816) , Xlinmen Furniture Co.Ltd(603008) issued the annual report of 2021 In Oppein Home Group Inc(603833) 2021, the operating revenue was 20.442 billion yuan, a year-on-year increase of 38.68%, and the net profit attributable to the parent company was 2.666 billion yuan, a year-on-year increase of 29.23% Jason Furniture (Hangzhou) Co.Ltd(603816) 2021 achieved an operating income of 18.342 billion yuan, a year-on-year increase of 44.8%, and a net profit attributable to the parent company of 1.664 billion yuan, a year-on-year increase of 25.2% after excluding the impairment of goodwill in 2020603. In 20082021, the operating income was 7.772 billion yuan, a year-on-year increase of 38.21%, and the net profit attributable to the parent company was 559 million yuan, a year-on-year increase of 78.29%; 2) Leading performance and industry continued to differentiate. Zero growth rate of furniture cooperatives in 2022q1 was – 7.1% year-on-year, and Jason Furniture (Hangzhou) Co.Ltd(603816) 2022q1 achieved an income of 4.54 billion yuan, a year-on-year increase of + 20.1% 60 Sichuan Injet Electric Co.Ltd(300820) 22q1 achieved a revenue of 1.405 billion yuan, a year-on-year increase of + 12.35%. The growth of leading enterprises was stable, the differentiation between leading enterprises and industries continued to expand, and the industry concentration continued to improve. We expect that the epidemic in April will still have a certain impact on the furniture industry. With the gradual improvement of the epidemic in Shanghai and other places, it is expected that the orders of leading enterprises will be replenished in the next 1-2 months. 3) The real estate policy continued to relax. Since the beginning of 2022, more than 60 cities have introduced stable real estate policies. From relaxing loan requirements, reducing mortgage interest rates to liberalizing the purchase and sale restrictions, the real estate easing policy has been increasing. With the relaxation of real estate policy and the gradual control of the epidemic, the valuation of the home sector is expected to continue to repair. [ Oppein Home Group Inc(603833) ] (pe23x in 2022) is recommended to consolidate the leading position of overall high growth; The pioneer of retail reform and the increasingly clear route of big home [ Jason Furniture (Hangzhou) Co.Ltd(603816) ] (pe19x in 2022); [ Suofeiya Home Collection Co.Ltd(002572) ] (pe13x in 2022) expected to accelerate retail under management improvement and overall strategy; [ Xlinmen Furniture Co.Ltd(603008) ] (pe14x in 2022) and the functional sofa leader [Minhua holdings] (pe11x in 2022) with low valuation to accelerate the expansion of independent brands. It is suggested to pay attention to [ Zbom Home Collection Co.Ltd(603801) ], [ Goldenhome Living Co.Ltd(603180) ].
E-cigarette: the industry supervision is advancing steadily, and we are optimistic about the orderly development of the e-cigarette industry. In April 2022, China’s e-cigarette policy was intensively introduced, and the national standard of e-cigarette was approved on April 12, 2022; On April 13, 2022, an official interpretation document was issued to make a clear response to issues such as the scope of industry supervision, transition period, license application and trading platform; On April 15, 2022, the five guiding documents of production, wholesale and retail licenses and the detailed rules for the management of product technical review and traceability were issued, and China’s e-cigarette supervision system was basically established. Plans for e-cigarette retail outlets in various provinces have been issued one after another, and the industry has ushered in legalized and standardized development. The short-term market scale may be disturbed by the implementation of policies, but the medium and long-term penetration is expected to continue to increase. Recommend [SIMORE international] with outstanding valuation cost performance after correction; It is suggested to pay attention to [fog core technology] which is expected to continue the advantages of brand and user volume.
Papermaking: continue to recommend [ Shandong Sun Paper Co.Ltd(002078) ], and gradually restore the profitability of head paper enterprises. In terms of price, as of April 22, the latest price of wood pulp was 7295.5 yuan / ton, with a weekly increase of 170 yuan / ton; The latest price of carton board paper is 4886 yuan / ton, with a weekly increase of 19 yuan / ton; The latest price of corrugated paper is 3818.8 yuan / ton, with a weekly increase of 6 yuan / ton; The latest price of white cardboard is 6440 yuan / ton, with a decrease of 10 yuan / ton on a weekly basis; The latest price of whiteboard is 5042.5 yuan / ton, with a decrease of 25 yuan / ton on a weekly basis; The latest price of double copper paper is 5620 yuan / ton, with a decrease of 60 yuan / ton; The latest price of double offset paper is 6212.5 yuan / ton, with a decrease of 25 yuan / ton on a weekly basis. The high cost of pulp promotes the rise of the price of cultural paper, the impact of double reduction and the new capacity in 2021q4 is gradually digested, and the profitability of cultural paper is expected to hit the bottom. It is recommended that [ Shandong Sun Paper Co.Ltd(002078) ]: the valuation has a margin of safety, the forest area of Laos base continues to grow, and the cost advantage and risk resistance are improved under the integration of Forest Pulp paper.
Risk tip: power rationing policy affects production capacity, raw material price fluctuations, intensified Sino US trade frictions, weak downstream demand, etc.
