Zhou Du’s core view:
In December, China’s total retail sales of social consumer goods amounted to 4.13 trillion yuan, an increase of 1.7% year-on-year, and the growth rate decreased by 2.2pct compared with November. Among them, the retail sales of consumer goods other than automobiles increased by 3% year-on-year, and decreased by 0.49% year-on-year after deducting price factors. In 2021, the total amount of social zero was 44.08 trillion yuan, a year-on-year increase of 12.5%, and the average growth rate in the two years was 3.9%. In terms of channels, the trend of online consumption has not decreased. The annual online retail sales was 13.09 trillion yuan, a year-on-year increase of 14.1%. Among them, the online retail sales of physical goods reached 10.8 trillion yuan, an increase of 12%, accounting for 24.5% of the total retail sales of social consumer goods. By category, compulsory consumption grew steadily, while optional consumption showed differentiation. Gold, silver, jewelry, cosmetics and clothing increased by 29.8% / 14% / 12.7% respectively.
Market review last week:
Last week (2022.01.17-2022.01.21), the retail trade (CITIC) index fell 1.4%, underperforming the CSI 300 index by 2.51pct. Among the 30 CITIC first-class industries, the commerce and retail sector ranked 16th. Among the sub industries in the retail sector, the sub industries with the highest growth were comprehensive business format, department store and professional market operation, with an increase of 8.93%, 2.79% and 0.9% respectively. The quantile of PE in commercial retail industry is greater than that in Shanghai and Shenzhen 300. At present, the PE (TTM) of commercial retail industry is 93, which is 97.91% from small to large since 2005; The TTM of CSI 300 PE is 13.63 and the quantile is 50.87%.
Key recommended companies this week:
Chow Tai Seng Jewellery Company Limited(002867) : under the background of the implementation of provincial representative model + common prosperity, the company develops new momentum and maintains the buy rating. The moat of the company lies in its obvious channel advantages and strong profitability of terminal channels. In the future, with the help of the provincial generation model, the power to expand stores is sufficient, which is expected to achieve nationwide coverage and occupy an obvious card position advantage in the low-line market. The company benefits from the release of wedding market demand brought by consumption recovery in the short term and the bonus of leading brands brought by the improvement of industry concentration under the background of common prosperity + the rise of national tide in the long term. The potential growth point lies in the rapid development of e-commerce business and the second growth curve of jewelry sub brands. The company has always maintained a high roe level of about 20%, which is due to its strong profitability. We expect the growth rate of the company’s revenue from 2021 to 2023 to be 79%, 34% and 24% respectively, and the growth rate of net profit attributable to the parent company to be 39%, 24% and 17% respectively. The corresponding PE valuation is 14.34x, 11.58x and 9.93x respectively, maintaining the buy rating.
Investment suggestions:
Maintain the “overweight” rating of the commercial retail industry.
Investment main line 1: gold jewelry continues its recovery trend and high outlook. We continue to recommend Chow Tai Seng Jewellery Company Limited(002867) and recommend paying attention to Chow Tai Fook and Lao Feng Xiang Co.Ltd(600612) .
Investment main line 2: in the traditional and new retail field, the business format of warehousing members is in full swing. It is suggested to pay attention to HEMA (Alibaba), Yonghui Superstores Co.Ltd(601933) , Jiajiayue Group Co.Ltd(603708) which actively layout the business format of warehousing stores.
Investment main line 3: the new retail field of e-commerce, the rapid development of live broadcasting and store self broadcasting, and the wave of community group buying, showing Matthew effect. It is recommended to pay attention to the business of voice, electricity, Alibaba and tiktok.
Risk tips:
Repeated outbreaks; Macroeconomic depression; Industry competition intensifies
