21 & 1q22 performance summary
Papermaking: internal differentiation, the fundamentals of pulp system have reached an inflection point, and the waste system still needs to wait for the peak season. The weak downstream demand led to the slow destocking of 4q21 paper enterprises. Although the industry started to raise prices under the influence of high energy costs and wood pulp costs, from the current perspective, the overall price increase and landing rhythm of pulp paper and special paper in this round was slower than that in the early stage, resulting in the bottom of 4q profit. Since 1q, with the weakening of the marginal impact of energy costs and the gradual landing of several rounds of price increases, the profit has entered the repair range. The profit recovery rhythm of head pulp paper enterprises represented by Shandong Sun Paper Co.Ltd(002078) is ahead of the industry as a whole. Looking forward to the future: with the arrival of the inflection point of pulp price, special paper is expected to take the lead in restoring the elasticity of channel profit, pulp paper will continue to be repaired quarterly, and waste paper will wait for the demand to improve.
Jiaqing and Gehu: watch the bottom of the value and recover, and expand the category of high-end products gradually. From the perspective of demand, households affected by the epidemic in the past 20 years have accelerated the accumulation of reservoirs, forming a high base. In the past 21 years, the cleaning and personal care industry has entered the stage of removing reservoirs, and the scale growth is under short-term pressure. From the perspective of profitability, the cost pressure of raw materials and energy consumption has become prominent since the second half of the year. New product promotion + fierce competition has pushed up the sales expenses, narrowed the gross sales difference, and put pressure on short-term profits. From 2q, the inventory side is expected to stabilize and the demand is improved, but the profit side is still differentiated. In the medium term, we believe that high-end, rich categories and nationalization are still the main growth line of Chinese personal care enterprises, which deserves long-term attention.
Pet sector: Chinese brands are clearly sorted out, and exchange rate fluctuations disturb the stability of performance. In the 21st year, the prosperity of pet food OEM industry showed strong resilience, and the performance differentiation was caused by the impact of the epidemic on the supply chain in the second half of the year. At present, the RMB has entered the depreciation channel, and we expect the profit side of pet food enterprises to be further repaired. Based on the forward-looking layout advantages of the supply chain, China’s pet food listed companies regard e-commerce as the “pioneer” of brand promotion and national expansion, and the layout is gradually mature. In the future, it is expected to strengthen the layout of offline pet stores and special channels and grasp the development dividend of the industry.
Investment advice
Papermaking: it is suggested to pay attention to the leading pulping company Shandong Sun Paper Co.Ltd(002078) (Guangxi pulp category layout performance flexibility is prominent, the demand for cultural paper has warmed up in the peak season, the profit per ton has recovered to 400 yuan, and the medium and long-term Nanning 5.25 million tons of energy production can be released to support the growth logic); Pay attention to Xianhe Co.Ltd(603733) (the price increase is steadily promoted, the profit enters the repair channel, the growth momentum is abundant, the medium and long-term forest pulp paper integration improves the strategic advantage, and will gradually transform into a forest / grass, pulp and paper integration enterprise, with further enhanced competitiveness and profit stability)
Jiaqing Gehu: it is suggested to select and improve varieties, layout performance improvement, strong certainty and growth of Vida International (short-term performance is under pressure, category upgrading continues to advance, the company has steadily raised prices since the end of last year, and the profitability is expected to reach the bottom from 2q. The medium and high-end tissue series tempo and sanxingmei maintain double-digit growth, the sanitary napkin brand libresse has a good development momentum, and is expected to further optimize the category structure and profit structure) Chongqing Baiya Sanitary Products Co.Ltd(003006) (make efforts to break through the encirclement of the whole country online, the effect of offline fine operation is better, the profit margin is steadily improved, and the product upgrading optimizes the profit structure)
Pet sector: it is suggested to pay attention to Yantai China Pet Foods Co.Ltd(002891) (overseas prosperity is stable, share is increased, China has issued convertible bond plan, category development drives growth. The company’s high-end and middle-end brand matrix is clearly sorted out. With the forward-looking layout of the supply chain, Chinese brands gradually build a full category combination of snacks, wet food and dry food, intensive cultivation of channels, and the growth of independent brands is expected to accelerate.)
Risk tips
The risk of lower than expected price increase due to lower than expected downstream demand; The risk of sharp rise in the price of raw materials; The risk that the promotion of new products is less than expected; The risk of losing large customers of agent industry and commerce; Risk of large exchange rate fluctuations
