Zhitong Financial APP learned that Caixin Securities released a research report saying that looking forward to next year, the epidemic prevention policy will relax and superimpose the strategy of expanding domestic demand, and domestic consumer demand is expected to bottom out and pick up. At the industry level, the loosening of epidemic prevention is expected to boost the plate, with beauty care, social services, and commerce and retail all performing well. Under the weakening impact of the epidemic in 2022, the performance of the social services sector has improved the most. At present, the valuation of the beauty care sector is the most cost-effective. In the beauty care sector, the trend of the cosmetics industry has been improving for a long time, the performance is differentiated within the performance side, and the certainty of the head core company continues to be realized.

Investment advice:Focus on 300896.SZ, 603605.SH and 688363.SH; secondly, recommend 300957.SZ; follow East China Medicine (000963.SZ), Jinbo Bio (to be listed on the Beijing Stock Exchange), and Jiangsu Wuzhong (600200.SH).

The main points of Caixin Securities are as follows:

Look for repair flexibility at the beginning of the year and do growth configuration throughout the year:

1) under the idea of looking for flexibility, the bank suggests following the logic of service-side recovery and looking for performance repair on the commodity side. On the one hand, starting from the catering terminal, we can find flexibility in the catering industry chain in the short term. It is suggested that we should pay attention to the relevant targets of the supply links in the middle and upper reaches of the catering industry chain in 2023Q1. On the other hand, starting from the medical beauty terminal, in view of the fact that the medical beauty service belongs to pure offline consumption, which is highly related to the epidemic situation, and the medical beauty industry chain is also flexible, it is suggested that the 2023Q2 should focus on the relevant targets of the upstream medical equipment end of the medical beauty; 2) under the idea of growth configuration, the bank suggests that the layout trend should be good for a long time and the performance of the long-term bull-type enterprises with strong certainty. The cosmetics industry has strong business resilience and the strongest certainty in the performance of optional consumer goods. It is suggested that we should grasp the allocation opportunities of the leading enterprises in the cosmetics industry during the downturn of market sentiment in 2023.

Beautiful consumption, everlasting demand:

The main results are as follows: 1) the medical and beauty industry is still in the beginning period of rapid increase in permeability, and there is a lot of room for increment in the industry. From the perspective of β trend, there is room for increment in the three fields of compliant aquatic light products, recycled materials and fat-reducing molding injections. From the perspective of α opportunity, on the one hand, the performance cashing ability under high expectations is the key to maintain the valuation center of medical and beauty enterprises stable in 1.5xPEG, and the certainty of performance cashing can be found from the product pipeline. On the other hand, in the continuous expansion of medical and beauty upstream enterprises, channel penetration is the starting point, and channel breadth & depth is the core of enterprise valuation premium; 2) the cosmetics industry is now in an upward period of slow permeability growth, and the competition pattern of the industry is gradually optimized. From the perspective of β trend, under the new regulations + channel solidification, the domestic cosmetics industry emphasizes the logic of improving head concentration at this stage, and the Matthew effect of domestic brands is particularly significant. From the perspective of α opportunities, large single products + strong brands + collectivization ability to support performance cash, ROE steadily improve the match high valuation.

Chain format, supply optimization:

1) the catering industry and its supply chain, the epidemic situation leads to operating pressure, the production preposition of terminal catering stores under cost pressure promotes the development of catering supply chain, and the certainty of recovery in the short term comes from store optimization and management improvement. in the medium-term dimension, the growth of chain format is expected to come from the enterprise's scale advantage and brand potential energy in the future. 2) in the hotel industry, the performance consideration cycle can be appropriately lengthened under enhanced recovery expectations, and as the impact of the epidemic weakens, performance and valuation are expected to resonate, and leading companies that benefit from the industry's clear logic are expected to perform better.

Risk Tips:Repeated risk of epidemic; policy launch time is less than expected risk; industry competition aggravates risk; new product research and development is less than expected risk.