Industry perspective update:
Home furnishing: from the recent frequent occurrence of stability maintenance policies related to real estate in many places, the real estate industry has gradually moved from a mild regulatory attitude to the substantive implementation stage of relevant policies, and the policy bottom has been proved. In this context, the overall household demand is also expected to usher in a marginal reversal, and when the valuations of the sector and mainstream stocks have fallen to a low level, the sustainability of the overall valuation repair of the sector is still worth looking forward to. From the perspective of flexible strategy, we continue to focus on Suofeiya Home Collection Co.Ltd(002572) . In addition to the valuation repair caused by the expected improvement of the industry, the company is showing positive changes in strategy, tactics and terminal implementation. Its fundamentals are also improving. The performance growth is expected to return to the right track, and the valuation has a large space for upward repair. From the perspective of long-term sound strategy, continue to focus on recommending European style and family care. In addition, it is suggested to actively pay attention to the investment opportunities brought by the export profit elasticity of software home furnishing enterprises in the first half of 22 years.
New tobacco: in terms of atomization sector, smalls released a performance forecast this week. It is expected that the adjusted net profit in 2021 will be 5.18 ~ 5.71 billion yuan, with a year-on-year increase of + 33.0% ~ 46.6%. Considering the frequent regulatory policies in China in the fourth quarter, short-term brands and channels need time to adjust, and the orders in the Chinese market have a slight impact, the overall performance is basically in line with expectations. At the beginning of the week, the company officially released a new generation of atomization solution, and the new technology has been comprehensively improved in the dimensions of taste reduction, harm reduction and leak proof liquid (see the text for details). We believe that this will not only improve the company’s market share outside China, but also further maintain its bargaining power through technical iteration, and further highlight the long-term value of the company. In terms of HNB sector, China’s HNB industry as a whole is still expected to develop well in the future, and is still in the policy waiting period.
Papermaking: paper enterprises issued a letter of moderate price increase. Overhaul & shipping increased the supply pressure of raw materials and pushed up the pulp price. Weak demand led to the price increase, and the ton profit is expected to be repaired quarterly. 1) Operating angle: the operating rates of coated paper and double offset paper were + 0.69%%, – 0.23% month on month, the operating load rate of white cardboard industry was – 1.77% compared with last week, and the operating rates of box board corrugated paper were + 1.12% and – 1.00% month on month respectively. 2) Inventory angle: the inventory days of coated paper and double offset paper are + 0.31% and – 0.23% respectively, the inventory of white cardboard is + 2.58%, and the inventory of box board corrugated paper is + 0.14% and – 0.69% respectively; 3) Cost side: Maintenance & shipping aggravates the pressure on the supply side, with strong cost support and weak demand, resulting in poor price increase, and short-term paper enterprises or profits continue to be under pressure.
Pets: the 2021 white paper on the pet industry was released, with both volume and price rising, eye-catching growth, and the number of pet cats surpassed dogs for the first time. In 2021, the number of pet cats / dogs was 5806 / 54.29 million respectively, with a year-on-year increase of + 19.4% / + 4.0%. Under the user portrait of high education & high income and the improvement of the pet raising rate of generation Z, we believe that the upgrading of pet food consumption is logical and continue to be optimistic about the investment opportunities brought by the rise of domestic products under the background of the rapid development of Chinese pets, The brand side is optimistic about the cost-effective pet food brand with independent production capacity and the high-end pet food brand enterprises with differentiated subdivision positioning. It is recommended to pay attention to Yantai China Pet Foods Co.Ltd(002891) , Guabao pet, and the production side is optimistic about pet OEM enterprises with high-quality supply chain capacity, such as Fubei pet.
Investment advice
Home furnishings: recommend Oppein Home Group Inc(603833) (Integrated Business & platform), Jason Furniture (Hangzhou) Co.Ltd(603816) (concentration of domestic sales share & export profit elasticity), Suofeiya Home Collection Co.Ltd(002572) (it is improving in many aspects, and there is a large space for valuation and repair).
Electronic cigarette: recommended by Warburg International (China’s traditional flavor industry, leading in the field of HNB flavor and thin film, next year, overseas business is expected to take the lead and China will have huge space after opening up in China.
Pet: it is suggested to pay attention to Petpal Pet Nutrition Technology Co.Ltd(300673) (the adverse factors of export business gradually dissipate, the production capacity is climbing and reorganizing in 22 years, and 1q22 is expected to usher in the performance inflection point. After sorting out the Chinese brand strategy, focus on independent brands, increase the investment in new channels and accelerate growth).
Risk factors
The extent and duration of the slowdown in China’s consumption growth exceeded expectations; Real estate sales have been shrinking sharply for a long time; The rising range and time of chemical raw material prices exceeded expectations; The exchange rate fluctuated sharply.
