In 2021, the consumer industry will grow generally under the influence of factors such as the epidemic, and some categories will reflect resilience. According to the National Bureau of Statistics, the average growth rate of the total social zero in 2019-2021 was 3.9% in two years, and the growth rate in the second half of the year was lower than that in the first half of the year. We believe that the reasons include the rebound of the epidemic caused by the mutated strain. Due to the High Base of 2021H1 due to the Omicron epidemic and the high base of 2021H1, the growth in the first half of 2022 may still be under pressure. In this context, the consumption of some must-have products reflects strong resilience.
Investment ideas for the consumer industry in 2021: focus on brands and upstream supply chains. For brands, we believe that the rise of national brands is the general trend of the mainland consumer goods industry in the next 5 to 10 years, and some domestic brands have shown obvious advantages in their understanding of new channels such as e-commerce, insight into consumer demand, and control of product upgrading directions, etc. It is recommended to focus on them. In the supply chain, China has a high-quality labor force, complete production technology, and efficient operation mechanism. We recommend focusing on the upstream supply chain "hidden champions" with reasonable valuations and certain growth attributes, which are expected to usher in the "Davis double-click" as demand grows and the operating environment improves.
We believe that there are three main lines of consumer goods investment: increased penetration, increased market share, and higher price. 1) Penetration increase: It is an important and scarce logic, but most traditional consumer goods have passed the rapid growth stage, and the increase in penetration rate usually appears in new consumer goods categories such as medical beauty and cultivated diamonds. 2) Market share improvement: including the increase in branding (such as the catering industry, etc.) and the increase in brand market share (such as functional skin care products, functional clothing, etc.). 3) Price increase: Only a very small number of consumer goods have the ability to continuously raise prices; Bosideng, Li Ning, ANTA and other brands have achieved price increases through product iteration, of which the second-hand price of some sneakers of Li Ning and ANTA is higher than that of MSRP, which is worthy of our attention.
Focus on sectors:
Cosmetics: The new regulations have raised the threshold of the industry, and the Matthew effect of the industry has been highlighted. The brand side pays attention to enterprises that attach importance to basic research and development innovation and multi-platform layout, and pays attention to the gradual recovery of the performance of leading raw material manufacturers, agency operators and foundry industry and commerce, which has a certain growth elasticity. Recommended targets: Polaria, Bethany, etc., it is recommended to pay attention to Coase shares, etc.
Clothing brand retail: the rise of the national tide is a major trend in 5-10 years. Recommended targets: Li Ning, Anta, Bosideng, Xtep International, etc.
Industrial e-commerce: the penetration rate has a lot of room for improvement. According to iResearch Consulting, the e-commerce penetration rate of industrial products in mainland China will be less than 5% in 2020, and the industry is still in its early stages. The era of industrial digitalization is coming, and industrial e-commerce is the core link and an important entry point, and it is recommended to focus on it. Recommended targets: Guolian shares, Milkwell, etc.
Cultivated diamonds: The penetration rate is rapidly increasing, and the end market has broad prospects. Recommended targets: power diamonds, etc., it is recommended to pay attention to the red arrows of the Chinese soldiers, the Yellow River whirlwind, etc.
Medical beauty: the industry demand boom continues to be high, the supervision of informal products and advertising is becoming stricter, long-term favorable to the production of regular products of the upstream equipment manufacturers and the standardization of leading midstream medical beauty institutions leader, the year a number of recycled products approved to bring new development opportunities. Recommended targets: Aimeike, Bloomage Biologics, Yonghe Medical, etc.
Risk warning: intensified industry competition, consumer demand is less than expected, the epidemic, raw material prices are rising, and the export trade environment is deteriorating.
(Analysts Wu Jincao, Zhang Jiaxuan)
This article originated from the financial world
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