Affected by the epidemic, the consumer sector, which was once optimistic at the beginning of the year, was under pressure in the second quarter.
In the past week, Beishang funds sold a net 9.58 billion yuan, and food and beverages were sold by a huge net of more than 5 billion yuan.
However, as the epidemic situation improved and policy stimulus improved market expectations, as of the close on May 31, the net inflow of northbound funds was 13.865 billion yuan that day, and sectors such as semiconductors, food and beverages, agriculture, and brewing rose sharply, with topics such as food concepts and consumer electronics. Be active.
The suppression of consumption by the epidemic is expected to gradually ease. In addition, the resilience of consumption as the main line of "the rise of the national tide" remains unchanged, and international investors still see many opportunities.
Recently, Li Mao, manager of Temasek's Fullerton Investments China stock fund, told Yicai.com that in view of the uncertainty of the epidemic, since the second quarter, the allocation of mandatory consumption, such as liquor and cosmetics, is still the main focus. A must-have consumer product".
She also mentioned that after the short-term disruption of the epidemic, the three major medium and long-term consumption themes have received continuous attention from foreign investors, which will help improve the valuation of companies - consumption upgrades, the rise of Guochao brands, and brands going overseas.
The impact of the consumer sector under the epidemic is differentiated
Under the epidemic, the impact on the consumer sector is also differentiated.
Credit Suisse Securities believes that catering is the most affected, followed by medical beauty, sports shoes and clothing, air conditioners and washing machines.
The agency's sensitivity tests show that a 10% drop in online sales reduces revenue by 2.5%-3.5%.
Some institutions have divided the impact of the epidemic on the consumer sector into four types.
The first is that neither 2022 nor 2023 will be affected.
"For example, the characteristic of baijiu is that consumption is highly concentrated in the Spring Festival, Dragon Boat Festival, Mid-Autumn Festival, and National Day. During this period, sales may account for 90%, and the proportion in April is relatively low. The monthly sales rate may be 5%, which will affect the performance of baijiu throughout the year. Not big." Li Mao told reporters that the price of liquor once soared in the third quarter of last year, and he was more cautious at that time.
But at present, the inventory of high-end liquor is extremely low, Maotai has no inventory, and Wuliangye's inventory is about 20 days, but the competition in the price band of 1,000 yuan is becoming increasingly fierce, and industry differentiation will also intensify.
The second category is that it will be affected in 2022, but will not be affected in 2023, and the previous losses can be quickly recovered after the closure and control are lifted. For example, some companies with factories located in Shanghai, as well as power grid investment, electric vehicle sales, etc. high-quality items.
The third is a permanent loss of 2 months due to the epidemic, but it may not be affected in 2023, and the catering industry is the main representative, which also dragged down the condiment sector.
Li Mao mentioned that catering channels usually account for more than 50% of condiment sales, while retail channels account for less than 40% of sales.
In addition, rising raw material costs have also squeezed margins for condiments such as soy sauce.
For example, soybeans, the raw material of soy sauce, mainly come from North America, and the barley used in beer is imported from Europe, so the import cost will inevitably rise.
The management of Haitian Flavor mentioned at the performance meeting that the cost per ton of soy sauce in 2021 will increase by 9% year-on-year, and the additional cost increase in 2022 will continue to put pressure on its profit margin.
The fourth category is that not only will be affected in 2022, but also the profit forecast in 2023 will be lowered. The stock price of this category of companies has fallen sharply.
For institutions, deploying the first and second types of companies may be a more defensive option.
Goldman Sachs recently stated that manufacturing stocks have been hit harder by the outbreak (down 38%, and have underperformed MSCI China by 20% YTD), while consumer stocks have performed relatively well, which may reflect the low valuation of the consumer sector And earnings forecasts have been cut significantly (2022 earnings forecast down 69%).
Looking ahead, the resumption of work and production and the normalization of supply chains are still the policy priorities, rather than rushing to resume other social activities, so manufacturing-related stocks will lead the process of reopening, and then if consumption activities follow suit to normalize , consumer-related stocks are expected to rebound later in the year.
The prospect of "national tide" is still optimistic
Aside from the disturbance of the epidemic, there are four medium and long-term growth drivers for any industry—increased penetration rate, increased concentration, upgraded unit price, and expanded profit pool.
Li Mao said that in the medium and long term, international investors are optimistic about the theme of China's consumption upgrade, the rise of national fashion brands, and the brand going overseas, which is also the key to supporting the expansion of corporate valuations.
Fullerton believes that China is becoming the world's largest single market, and the income growth rate of low-income people may be the fastest.
With the implementation of anti-monopoly policies, channels will be more decentralized, and China's branded consumer goods companies will share the fruits of China's economic growth for a long time.
Huang Xiang, head of research at Credit Suisse China Securities, also told reporters earlier, "Chinese brands have made remarkable progress in improving product quality, and higher aesthetics, innovation and technological content have enhanced the overall attractiveness of Chinese brands. .” This in turn drives a strong sense of national pride for Chinese brands among domestic consumers.
This "national tide" phenomenon is particularly evident in sports shoes and clothing, cosmetics, mobile phones and electric vehicles.
Cases of similar companies have been numerous in recent years.
Taking cosmetics as an example, the foreign shareholding ratio of the domestic brand Proya exceeds 20%, which is close to being "buried".
In the early years, the positioning of domestic cosmetics was relatively low-end. Starting from 2020, the company launched a variety of mid-to-high-end products with the main formula (the price range of about 300 yuan), superimposed on multi-channel marketing, and after about a year, the GMV of major single products has broken through. 1 billion yuan.
"The high-end brand is an important trend, which not only makes related companies more viable, but also obtains a higher valuation premium." Li Mao said that in recent years, it is not difficult to find that many brands have products with higher unit prices. Phenomenon, the importance of brand power and high-end is highlighted.
This is also reflected in small appliances.
For example, Li Mao said that the sales of sweeping robots below 1,000 yuan have fallen sharply, but the average price of categories above 3,000 yuan has increased by 20-30% and sales have soared.
At the same time, sweeping robots are also the first popular category to go abroad.
For example, the market share of Stone Technology in the European market is as high as 15%, and the global market share of Ecovacs is 17%. It can be seen that Chinese brands stand out from the competition in the global market. Brand power and quality win.
The brand going overseas has also given many Chinese enterprises secondary vitality, and even achieved corner overtaking.
For example, in terms of white goods, among the three giants Midea, Haier and Gree, in 2021, Haier's overseas revenue will be 113.725 billion yuan, accounting for more than 50% of the total revenue, which has exceeded Midea's 40%.
Driven by overseas business, Haier Zhijia has a compound growth rate of 15% in the past three years, exceeding Midea's 7.6%, while Gree is basically zero.
But this brand of high-end is not achieved overnight.
Li Mao mentioned that in the early years, Chinese companies were more OEMs and exporters for overseas brands, but the high-end brands that stood out have acquired brands in overseas markets and carried out localized production very early. Profits are far inferior to overseas OEMs.
But after accumulating to a certain extent, the enterprise's own competitive advantage will be highlighted rapidly.
Author: Zhou Erin