The marginal slowdown in the recovery process of consumption and the impact of the epidemic continued
From January to February 2022, the total retail sales of social consumer goods reached 7.44 trillion yuan, an increase of 6.7% year-on-year. Affected by the epidemic in March / April, the total retail sales of social consumer goods reached 3.42 trillion yuan / 2.95 trillion yuan, a year-on-year decrease of 3.5% / 11.1% respectively. 1q2022 the operating revenue of 52 major listed companies in the retail industry increased by 2.70% year-on-year, and the net profit attributable to the parent decreased by 5.19% year-on-year. In terms of subdivided industries, in 2021, except for supermarkets, other formats achieved positive year-on-year growth in revenue and profit, while 1q2022 only supermarkets and professional chain formats achieved positive year-on-year growth in parent net profit. Since 2022, as of May 13, the rise of the retail trade (CITIC) index has been – 8.80%, outperforming the Shanghai Composite Index and the Shenzhen composite index.
The optional consumption elasticity is relatively high, and the online process of epidemic catalysis is accelerated
Compared with the mandatory products, the consumption elasticity of optional products is higher. With the gradual control of the epidemic, the demand for optional consumption is gradually released, and the consumption growth rate of mandatory products returns to stability. Consumer confidence is at a low point in the short term. With the gradual control of the epidemic, consumer confidence may be boosted. The consumption capacity of “generation Z” consumers has improved, and their national pride has increased, leading the national tide of consumption to continue to heat up. The epidemic has accelerated the process of offline and online, and the digitization of retail enterprises has continued to improve. According to the statistics of the 20212022 development report of China’s department store retail industry, 85.4% of the surveyed enterprises have carried out online business, and less than 20% of the enterprises have not carried out online business.
The impact of the epidemic still exists, and we look forward to a rebound in optional consumption
Department store industry: high dividend yield, stable safety margin, offline exhibition stores and online channels develop simultaneously; gold
Jewelry industry: the value preservation property of gold is prominent, and the gold jewelry market is still broad; Liquor distribution: Liquor sales remain strong and the prospect of high-end Baijiu is broad. It is suggested to pay attention to dealers mainly focusing on high-end Baijiu Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) ;
Supermarket format: community group buying tends to compete rationally, the pressure on supermarkets slows down, and hoarding promotes the growth of supermarket performance;
E-commerce sector: stock competition intensifies, and the epidemic may further promote the construction of supply chain.
Recommended target: focus on department store stocks with undervalued value and high dividend yield and optional consumption with epidemic repair logic
We start with department store stocks with undervalued value and high dividend yield and optional consumption with epidemic repair logic. Recommendations: 1) Shanghai Bailian Group Co.Ltd(600827) : Shanghai department store is the leader, and there is a chance of rebound in epidemic repair; 2) Wangfujing Group Co.Ltd(600859) : National Department Store Leader with relatively stable competitive advantage; 3) Chongqing Department Store Co.Ltd(600729) : higher dividend yield and higher safety margin; 4) Lao Feng Xiang Co.Ltd(600612) : gold jewelry leader, entering the period of rapid store expansion; 5) Guangdong Chj Industry Co.Ltd(002345) : the franchise transformation is smooth, and the youth transformation of Fion has achieved results; 6) Vats Liquor Chain Store Management Joint Stock Co.Ltd(300755) : high end Baijiu contributes to the cornerstone of performance, and customized liquor opens up profit space; 7) JD group sw: supply chain advantages maintain competitive barriers, and performance certainty is relatively high.
Risk analysis:
The macro-economic growth and resident income growth did not meet expectations. The post real estate cycle affected the income growth of some subdivided industries. The impact of the general trend of channel reform on the existing business model was higher than expected, and the epidemic control process was lower than expected.
