There are many sub-sectors in the light industry, but the competitive landscape is scattered, showing the characteristics of “big industry, small companyâ€. In the current market environment that pursues stable and certain returns, the performance of the transformation companies continues to diversify and the excess returns have declined. Based on this, we recommend the target mainly based on three directions: 1) the target of deterministic growth under the high-environment industry; 2) the sub-field of the inflection point of the supply and demand structure, the target of the research expected difference; 3) the transformation company Focus on the pattern of good growth and growth in emerging service industries such as lottery, sports and education.
The furniture industry has a good business climate: As a post-real estate sector, the continued boom in the real estate market in first- and second-tier cities since 2015 has provided strong support for the growth of demand in the furniture industry in 2016 and 2017. In addition, the scale effect of the furniture industry is obvious, the barriers of leading enterprises are significant, and brand consumption increases the concentration of the industry, focusing on custom furniture and large homes. Recommended targets: Sophia (002572), Da Ya Sheng Xiang (000910);
Paper supply and demand structure adjustment, profitability rebounded: supply side reforms deepened, non-profit paper mills closed, production capacity accelerated, production and consumption gradually returned to equilibrium, and expected future production capacity growth was limited, industry concentration increased, paper products took turns The price increase, coupled with the decline in pulp costs in 2016, led to a rapid recovery in the profitability of leading paper companies. Recommended targets: Sun Paper (002078), Shanying Paper (600567);
There are many transformation companies in light industry. We recommend focusing on opportunities for better-growing industries such as maternal and child preschool education and lottery. The maternal and child market has a capacity of more than one trillion, and the new market capacity brought by the fourth full baby boom is estimated to be nearly 100 billion. It is expected to be released in the next four years. We estimate that the maternal and child industry growth rate can reach more than 15%, coupled with the industry's decentralization, the leader will have the opportunity to grasp the industry concentration trend to become an industry integrator and consolidate leadership. Recommended targets: Blonde Rabbi (002762), Bangbao Puzzle (603398).
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