I. recent situation of the industry

This week, the Hang Seng essential consumer industry index fell 0.61%, and the Hang Seng non-essential consumer industry index fell 0.62%, compared with the Hang Seng Index (- 0.83%) earnings of 0.22% and 0.21% respectively. According to the cumulative income so far from the beginning of the year, the Hang Seng Consumer Index has outperformed the Hang Seng Index, and the excess income is-12.1%, respectively. The Hang Seng Composite Industry Index is in the middle and lower reaches.

Judging from the 46 stocks in the Fortune Big consumption Index (see schedule 1 for details), the top three stocks up this week are Hyundai Animal Husbandry (+ 5.73%), Bosideng (+ 5.57%) and Budweiser Asia Pacific (4.90%). The top three stocks that fell this week were Yihai International (- 12.10%), Haidilao (- 9.62%) and Guayu (- 8.72%).

Analyzed by segment, the clothing and textile sector in the big consumer industry performed best this week, while the retail and hotel entertainment sectors performed poorly.

The major events in the industry this week are:

1. Huang Guangyu made his comeback and made his debut. Gome Retail will challenge plans such as online translation of stores, service expansion, and strengthening the supply chain under high debt.

2. Bubble Matt and the thirteen houses of the Chinese clothing brand of DUI Guofeng, explore the integration of tradition and trendy culture.

The following are comments on these two important events.

Second, this week's point of view

Gome retail recovered obviously at the beginning of the year, and the strategic transformation is difficult:

Huang Guangyu's comeback debut sends a strong signal to strengthen investor confidence and plans to build a retail ecosystem, expand the scope of the supply chain and share strategic cooperation resources. In 2020, affected by the epidemic, the company's retail business was under pressure and carried out large-scale promotions. the annual revenue was 44.119 billion yuan, down 25.83% from the same period last year, and the GMV of the whole platform was 112.63 billion yuan. After the epidemic, entertainment sales such as online live broadcasting have improved month-on-month. 1Q21 revenue is expected to increase by more than 170% compared with the same period last year, "True Happy" APP GMV has increased nearly four times, MAU is about 40 million, and DAU is nearly 10 million. We believe that the company has a deep layout in the sinking market, with more than 3400 stores in more than 500 cities. in the future, it will be mainly joined and supplemented by the main business, which is in line with the sinking trend of industry consumption and is expected to overtake at the bend. However, at the present stage, the competition in the e-commerce industry is fierce, the recovery of consumer prices in China is general, consumption continues to be weak, and it is more difficult to turn losses into profits.

Comments on Bubble Matt's investment in more than 13 Hanfu brands:

Bubble Matt's investment in more than 13 reflects its layout ambition in Hanfu IP: in the short term, the investment in well-known KOL broadens the scope of Bubble Matt's customer base and plays a positive role in enhancing brand exposure and improving e-commerce channel penetration; in the long run, this will help to enrich Bubble Matt's existing IP assets and inject vitality into the future incubation of more yuan of products. From the perspective of more than thirteen, the reason why we choose Bubble Matt is to take a fancy to the latter's perfect sales network and IP operation strength, in order to explore offline scenes and enhance the influence of Hanfu brands.

III. Investment suggestions

In March, China's national consumer prices recovered generally, and the industries with obvious short-term recovery were catering after the epidemic (Haidilao, Jiumao, Yihai International), and the implementation of vaccines benefited from service-oriented consumption with low cyclical valuation. such as literature and tourism, film and television, aviation and other plate leaders. The short-term adjustment of the market will remain stable, and the investment strategy still needs to be based on defense. Investors should pay attention to the matching between corporate valuation and their own profitability, track macroeconomic trends, and focus on the leading and high-quality enterprises in the industry.

IV. Risk hints

Macroeconomic fluctuations; intensified industry competition; sustained weak consumption; recurrent epidemic situation; intellectual property protection and other risks

Appendix

Table 1: 35 constituent stocks of Fortune Big consumption Equal weight Index

Table 2: performance and valuation of the leaders of the major consumer sectors this week