Market review this week: SW light industry manufacturing industry lost 300 in Shanghai and Shenzhen this week. From January 10 to January 14, 2022, only 19.35% of Shenwan class industries recorded positive earnings; SW light manufacturing industry index fell 2.21%, underperforming the CSI 300 index by about 0.22 percentage points in the same period. Only SW packaging printing board recorded positive revenue, with a weekly increase of 0.89%; The other secondary sub industries of SW light industry manufacturing recorded negative returns. SW paper, SW household products and SW entertainment products fell by – 2.34%, – 3.63% and – 4.40% respectively, all outperforming the Shanghai and Shenzhen 300 index in the same period. Over 50% of the stocks in the industry recorded negative returns.
Key industry news: (1) according to the data of the National Bureau of statistics, China’s newsprint output in November 2021 was 43000 tons, a year-on-year decrease of 48.8%; From January to November 2021, China’s cumulative output of newsprint was 806000 tons, a cumulative decrease of 11.4%; From 2015 to 2020, China’s newsprint production reached the highest in 2015, and then decreased year by year. (2) On January 15, 2022, according to the national building materials home prosperity index established by the Circulation Industry Development Department of the Ministry of Commerce and compiled and released by China State Construction Engineering Corporation Limited(601668) Material Circulation Association, the BHI in December was 122.51, a month on month decrease of 16.99 points and a year-on-year increase of 28.92 points. The sales volume of building materials and home stores above Designated Size in China in December was 119.524 billion yuan, a month on month decrease of 6.89% and a year-on-year increase of 39.93%; In 2021, the annual cumulative sales volume was 1177.392 billion yuan, up 54.43% year-on-year. (3) With the Spring Festival approaching, liquor sales have entered the peak season. As a supporting packaging industry, orders have ushered in explosive growth. Zunyi packaging and printing culture industrial park, located in Longping Town, Bozhou District, Zunyi City, is working hard and busy with production. Guizhou Tongli Culture Development Co., Ltd. has successively introduced more than 10 packaging enterprises from Jiangxi, Chengdu, Fujian, Zhejiang and Shenzhen to join the industrial park. (4) This week, several packaging and printing and tobacco concept hot stocks rose in succession, such as: Shenzhen Prince New Materials Co.Ltd(002735) , Jiangsu Shuangxing Color Plastic New Materials Co.Ltd(002585) , Sichuan Jinshi Technology Co.Ltd(002951) , Xi’An Global Printing Co.Ltd(002799) , Shanghai Haishun New Pharmaceutical Packaging Co.Ltd(300501) .
Maintain recommended ratings for the industry. Recently, a number of packaging and printing, tobacco concept hot stocks have been trading. At present, China’s e-cigarette industry has entered a standardized growth period, with strong certainty of leading brands. It is suggested to lay out the main line of new economic growth investment in the medium and long term, and pay attention to the new tobacco concept stocks in the packaging and printing sector: Anhui Genuine New Materials Co.Ltd(603429) (603429), Huabao Flavours & Fragrances Co.Ltd(300741) (300741), etc. In addition, in terms of the traditional light industry track, we continue to be optimistic about the valuation and repair market of the home sector. It is recommended to pay attention to high-quality leaders: Oppein Home Group Inc(603833) (603833), Suofeiya Home Collection Co.Ltd(002572) (002572), Jason Furniture (Hangzhou) Co.Ltd(603816) (603816), Qumei Home Furnishings Group Co.Ltd(603818) (603818), etc. In the paper sector, we are waiting for the improvement of downstream demand. It is suggested to pay attention to China’s leading paper enterprises: Shandong Sun Paper Co.Ltd(002078) (002078), Shandong Bohui Paper Industry Co.Ltd(600966) (600966), Shandong Chenming Paper Holdings Limited(000488) (000488), Shanying International Holdings Co.Ltd(600567) (600567), etc.
Risk tips: covid-19 epidemic continues to repeat, industry competition intensifies, real estate prosperity is less than expected, downstream demand is less than expected, raw material price fluctuation, tobacco policy risk, exchange rate fluctuation intensifies and other risks.
