Key investment points
Home furnishing: Keshun impairment & rongchuang placement disturbed market sentiment in the short term, and the callback continued
Keshun Waterproof Technologies Co.Ltd(300737) the impairment of accounts receivable of real estate customers and rongchuang’s large discount placement disturbed market sentiment, and the pressure on the home sector was obvious this week. Keshun Waterproof Technologies Co.Ltd(300737) released the performance forecast for 21 years, and the performance of 21q4 declined significantly, mainly because the company accrued a certain proportion of credit impairment loss for the receivables of some real estate customers individually, while the company had little business cooperation with Evergrande. The supermarket expectation of goodwill impairment caused the market to worry about the impairment of receivables in the post cycle sector such as home. Rongchuang China allotted shares to Morgan Stanley at a large discount, and plans to use about 50% of the net proceeds from the subscription to repay the loan, further strengthening the pessimistic expectation of the market on the capital pressure of real estate enterprises and the recovery of accounts receivable of real estate post cycle companies. Household enterprises will fully accrue impairment in 21 years, and the reversal of bottom performance in 22 years is expected to drive the continuous repair of valuation. Enterprises with large amount of Evergrande accounts receivable in the household sector include Jiangshan Oupai Door Industry Co.Ltd(603208) , Guangdong Piano Customized Furniture Co.Ltd(002853) , Suofeiya Home Collection Co.Ltd(002572) . Each company plans to withdraw a certain proportion of impairment in the financial report of 21 years to avoid affecting the performance of 22 years. After the provision of 21q4 is completed, the risk of accounts receivable of each company will be fully released and the bottom of performance will be built. We suggest that we focus on the 22-year growth of the enterprise, continue to be optimistic about the bottom of performance and continue to repair the valuation after the policy pressure slows down. Target recommendations: (1) continue to be optimistic about Baima Longtou Jason Furniture (Hangzhou) Co.Ltd(603816) , Oppein Home Group Inc(603833) in the medium and long term, build a leading advantage in multiple dimensions, have strong growth certainty, and the logic of share promotion is more smooth. (2) This round of recommendations focuses on the investment opportunities of elastic targets with high growth and low value. It is most recommended to Suofeiya Home Collection Co.Ltd(002572) (13X PE in 22 years), and Qumei Home Furnishings Group Co.Ltd(603818) (E company’s high-quality operation and smooth entry into stressless Chinese market, 16x PE in 22 years) and Xlinmen Furniture Co.Ltd(603008) (high growth in equity incentive planning, compound 25% revenue and 30% profit target, 20x PE in 22 years). Among them, Jason Furniture (Hangzhou) Co.Ltd(603816) 21 year performance forecast met expectations, category integration and retail transformation escorted growth and continued recommendation.
Tobacco: AI media consulting released the global e-cigarette industry report, and China’s leaders continued to promote the layout of new tobacco industry
The global new tobacco market continues to boom, China’s market growth is leading, and the export of disposable e-cigarettes accounts for a high proportion. According to the special report on the development trend of global e-cigarette industry from 2021 to 2022 released by AI media consulting, the retail scale of the global new tobacco market in 21 years was USD 56.9 billion (+ 25.6%), and the global scale is expected to reach USD 73.8 billion (+ 29.7%) in 22 years. China’s electronics market is booming with a leading growth rate, with a domestic sales scale of 14.5 billion yuan (+ 73%) in 21 years. According to the 2021 e-cigarette industry blue book released by volume think tank, exports to the United States accounted for 50% of the total exports in 21 years, and the export of disposable e-cigarettes accounted for 65%. In the short term, the hot demand for disposable products will continue.
Overseas disposable small smoke hot & new products of smore will be released soon. From a long-term perspective, the valuation of SIMORE international is still low. It is expected that the profit in 22 years will be 7 + billion (+ 25%), and the corresponding PE is only 24.6x. The layout is recommended. Huabao international has successively won the bid for new projects of China tobacco, and the comprehensive integration service barrier has been built. Based on the taste gene, the company continues to be optimistic about improving customer stickiness through integrated comprehensive solutions, and looks forward to the release of increment in international layout after the production capacity of Indonesian factories is put into operation in 22 years.
Shenzhen Jinjia Group Co.Ltd(002191) participate in Jiaju electronics to strengthen the layout of low-temperature materia medica. Recently, the company announced that it would increase the capital of Shenzhen Jiaju Electronic Technology Co., Ltd. by 23.8 million yuan through Jinjia Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) technology. After the transaction is completed, the company holds 40% equity of Jiaju electronics. Since 2014, the company has continued to make efforts in the new tobacco sector and continuously layout products, brands, channels and supply chains in the field of atomized tobacco and HNB. In addition, the company’s main business, traditional cigarette label business, is expected to rebound, high-quality cigarette boxes continue to work, 3C packaging growth recovers, and continues to be optimistic about the company’s future growth and valuation improvement.
Required: the epidemic situation repeatedly disturbs the repair process and waits for the inflection point
In December, the epidemic situation was repeated in many places, disturbing the necessary repair process. According to the social zero data in October / November, the mandatory consumption showed strong resilience. In December, the epidemic situation in Xi’an and other places was repeated and disturbed. The mandatory consumption recovered, and the expected performance of offline consumption was slightly under pressure. However, the growth performance of online consumption was also weak due to the impact of the high base.
The required bottom configuration appears gradually, waiting for the inflection point. After recent adjustment, pe-ttm of A-share mandatory sectors, such as Shanghai M&G Stationery Inc(603899) , C&S Paper Co.Ltd(002511) , Chongqing Baiya Sanitary Products Co.Ltd(003006) , are at 1.1%%, 15.6% and 12.5% of the historical level respectively. In the follow-up, we will focus on the inflection point opportunities brought by raw materials, downstream consumption and business strategy upgrading.
Papermaking: accelerated concentration of special paper pattern, leading the way
Pulp rebounded, base paper trend was stable, and inventory rebounded. The concentration of special paper pattern is accelerated, and the leading enterprises such as crane take the lead. According to the data of the papermaking association, the supply side of the special paper industry is about 7.5 million tons and the demand side is about 10 million tons (including the import demand of 2.5 million tons). The corresponding industry pattern is relatively scattered. The leading crane (1.1 million tons of capacity at the end of 21) accounts for only 15% of the supply side, and the capacity of other companies is mostly 300000-400000 tons. According to the industry expansion plan, the expansion speed of the leading enterprises is differentiated. Xianhe, huawang and Wuzhou expand faster, while the expansion of other companies is more conservative, and the industry pattern is accelerated and concentrated.
India’s anti-dumping case of decorative base paper landed, which was beneficial to the increase of export share of Xiawang and other enterprises. On December 27, 2021, the Taxation Bureau of the Ministry of finance of India made a final decision on anti-dumping, imposing anti-dumping duties for five years on Xiawang paper (Xianhe joint venture) and Qifeng New Material Co.Ltd(002521) boxing Ouhua and Zibo oumu products involved. India’s decorative base paper market is relatively blank, China’s export base paper has superior cost performance and more prominent performance than local products. This round of anti-dumping tax is expected to be transmitted smoothly, and there is a great possibility for customers to bear, which is actually good for Xia Wang and Qi Feng to increase their share. The post papermaking cycle focuses on growth targets, preferably Xianhe Co.Ltd(603733) and Shandong Sun Paper Co.Ltd(002078) .
High quality manufacturing: select individual stocks for 22 years, and select competition channels and small leaders with competitive advantages
Line 1: profit inflection point. The expected margin of raw material & shipping is loose, and the implementation of price increase drives the recovery of profitability. It is recommended to lay out the targets with serious profit damage in 21 years and strong recovery power in 22 years in light industry high-quality manufacturing. It is recommended to Healthcare Co.Ltd(603313) , Zhejiang Walrus New Material Co.Ltd(003011) , Shenzhen Yuto Packaging Technology Co.Ltd(002831) , Xiamen Intretech Inc(002925) .
Line 2: the downstream demand is booming, and the revenue growth momentum in 22 years is abundant. Combined with the company’s valuation and growth, it is recommended to pay attention to Zhejiang Natural Outdoor Goods Inc(605080) (22x in 22 years, growth target of 30%), Joy Kie Corporation Limited(300994) (28x in 22 years, growth target of 30% +), Hhc Changzhou Corp(301061) (18x in 22 years, growth target of 25-30%) and small and Midea’s target Shandong Yuma Sun-Shading Technology Corp.Ltd(300993) (21x in 22 years, growth target of 30-35%, we will release an in-depth report this week).
Risk tip: the trade environment continues to deteriorate, the real estate regulation exceeds expectations, the increase of paper price is lower than expected, and the double control policy is intensified
