The overall industry affected by the epidemic can be divided into three categories of affected industries:
The epidemic has had a greater impact on the short-term demand side of optional consumer goods. Real estate sales area during the Spring Festival fell 86.19% year-on-year, car sales are expected to decline by more than 15% in the first quarter, cell phone sales fell 20-30% in the first quarter, the movie box office for only 20 million (last year's Spring Festival box office 5.8 billion).
The epidemic is the main factor leading to the decline. At present, the epidemic has not been fully controlled, the medium and long term impact on these industries is still difficult to judge. In accordance with the principle of prudence, we have basically revised down our full-year forecasts for these industries, generally by 5±3 pct, with the movie box office experiencing the largest decline of 11 pct.
Based on these phenomena, we deduce that food and beverage, tourism, and hotels, which we have not tracked, but which are closely related to optional consumption, will be significantly impacted.
This impact can be divided into two aspects: capacity and capacity. As Hubei is located in the hinterland of the Central Plains, the impact on the national capacity will be greater than the capacity.
The negative impact of capacity on express courier enterprises bear the brunt. Secondly, the building materials industry in the Hubei region is also subject to a greater impact; capacity, if the epidemic can be controlled as soon as possible, the full recovery of the national capacity will be delayed by 20 days to a month, but the Hubei production capacity accounted for a higher proportion of the Hubei or Hubei enterprises have a greater influence on the recovery of the industry time may be further delayed, including PCB manufacturing (Hubei production capacity accounted for 10-15%), automobile manufacturing (Hubei production capacity accounted for 8-9%) and Some high-end manufacturing industries.
It is worth pointing out that the Hubei enterprise position is more prominent in the optical communication equipment industry capacity by the impact is not obvious, mainly because the relevant enterprises in advance in order to prepare for the 5G, inventory is more adequate (January-March), the relative impact is small.
Medical supplies, online video, games, online medical, fresh food e-commerce, online education, online office, online medical, online education, third-party IDC, etc. will thus benefit.
In the short term, demand for epidemic-related medicine and medical supplies has increased significantly, and demand for non-epidemic-related medicine has been suppressed, and we believe that the epidemic will have little impact on the pharmaceutical industry in the long term.
Benefiting from the obvious increase in online consumption, it is expected that this year's Spring Festival data traffic across the network has changed the previous trend of decline during the Spring Festival, the chain growth of about 50%. During the Spring Festival, two major online games, King's Honor and Peaceful Elite, saw their average daily number of active users increase by 60-100%. Lost Mom" from the theater premiere to online premiere for short video companies to open up new business areas buried.
After the holidays, the demand for online education and online office has increased dramatically, and because of the low monthly activity before, the increase may be as high as dozens of times, and is conducive to changing the long-term consumption habits of users.
Short-term impact
1) For products related to the epidemic, January's sales were substantially higher than in previous years;
2) For non-related products, due to the delay in the hospital's purchasing program during the epidemic, patients avoided going to the hospital as much as possible, the order volume has declined;
3) The overall impact needs to be further evaluated based on the development of the epidemic. The overall impact needs to be further evaluated based on the development of the epidemic, and the initial phase of the diagnostic products, pharmacies, diagnostic platforms, pharmaceutical distribution, and medical information technology sectors are relatively beneficial.
Medium and long-term impact
1) During the epidemic part of the equipment, consumables, drugs sales have risen rapidly, but the shortage of goods makes the enterprise in overtime labor, raw materials and other aspects of the input has increased, in addition to other medical institutions other number of people have a phased reduction in the number of visits, coupled with traffic control, logistics restrictions on the sale of products, the impact of the epidemic on the relevant enterprises, the number of people who have to go to the hospital, the number of people who have to go to the hospital, the number of people who have to go to the hospital.
Business Opportunities
1) short-term view, the impact of the epidemic, the various types of business funding gap increases, can pay attention to the epidemic related products enterprise short-term financing, project loan demand;
2) the medium and long term view, the overall development of the industry logic remains unchanged after the end of the epidemic, pay attention to the innovation, CXO, specialty chains, medical information technology enterprises
3) In the long run, the promotion of hierarchical diagnosis and treatment is likely to accelerate the progress, pay attention to the potential cooperation opportunities of distributors, teleconsultation and other medical resources sinking must link.
Risk
1) After the epidemic, the epidemic-related product manufacturers performance retracement;
2) the epidemic continues longer than expected, non-epidemic-related products enterprise production, research and development delayed, the risk of elevated;
3) the recovery of the operation of the regular department of hospitals, the enterprise production capacity and order growth is less than expected. The company's business is not a big one, but it's a big one.
Short-term impact
1) Demand: cell phone has a certain optional consumer attributes, in the current offline channel sales still dominate the situation, the epidemic caused by panic and go out of the frequency of reduction, inhibit part of the consumer demand for change. The economic downturn caused by the epidemic will lead to a decline in income or even unemployment of some consumers, the decline in spending power, which in turn affects the consumption of cell phones, we expect that 2020Q1 domestic cell phone shipments may be 20-30% decline.
2) Supply side: Hubei local cell phone assembly capacity is less, but Hubei surrounding Henan, Jiangxi, Hunan and other provinces have Foxconn, Ophiophoton, Lance and other cell phone industry chain company's main production bases, the number of viral infection diagnosis of the provinces ranked ahead of the Guangdong, Zhejiang and so on is also the main cell phone industry chain base. At the same time, the degree of automation of cell phone industry chain companies is generally not high, the number of workers is large, from the current epidemic, the resumption of work in many places has been affected, and may have a significant impact on the global cell phone industry chain. After the new crown virus was declared a global emergency by the WHO, whether it will have an adverse impact on exports, but also follow-up attention. At present, many parts of the country's transportation capacity has been greatly affected by the extension of the transportation time of some raw materials, raw material supply to form a disturbing factor is worth paying attention to.
3) The epidemic may also affect the major brands 5G cell phone release and on-shelf rhythm. Xiaomi Group announced on the 4th, Xiaomi 10 cell phone from offline to carry out online release. We need to pay attention to the major brands' product releases at the end of February at the Mobile World Congress (MWC).
Medium- to long-term impact
Considering the impact of the epidemic, we downgrade our previous forecast, we expect domestic smartphone shipments in 2020 will be reduced from about 1% year-on-year growth to 5% year-on-year decline. In the long run, the epidemic has basically no impact on the development of the cell phone industry.
Business Opportunities
It is recommended to increase the support for the head cell phone brand owners and cell phone parts companies.
Risks
Concerned about high debt ratio, high capital expenditure companies, such as OEM/EMS and other companies due to the epidemic of the business risk and financial risk.
Short-term impact
1) Demand side: the stagnation of offline entertainment such as movies and other offline aggregated entertainment, online entertainment such as games, online video, short videos, live streaming, music and other hot. The epidemic led to the closure of theaters, 20 million box office in the Spring Festival file in 2020 (vs. 5.8 billion in the Spring Festival file in 2019), and the box office in February is expected to be 10 million (vs. 11.1 billion in February 2019); neutral consideration of the epidemic in March was suppressed, and it is expected that the annual box office of the film will be about 57 billion yuan, a year-on-year drop of 11 points.
2) Supply side: content production stagnation, innovation in the way movies and programs are broadcast. The TV series shooting crew stops work, resulting in the first two years of the "backlog of drama" inventory has a certain digestion and broadcast; individual movies from the line of the theater to the online broadcast; entertainment program recording suspension, part of the TV station to connect live to try to innovate.
Medium- and long-term impact
1) theater shutdown may accelerate the reshuffle of theaters;
2) "Lost Mom" shift online does not change the medium-term pattern of broadcasting of large-scale films, the main constraints on the online theater is the ability to pay for the terminal, the network and the terminal equipment to present the effect is limited;
3) film and television crews to stop work, the supply side of the television series to further clear.
Business Opportunities
1) It is recommended that this year and next year to closely track the opportunities for theater consolidation, and pay attention to the risk of the capital chain of the theater in the lower tier cities;
2) in the context of the crews of the general shutdown, to give more financial support to the head of the head of the content production business customers;
3) the migration of the offline entertainment to the line, it is recommended to increase the head of the platform of the line, the head of the platform of the line, and to increase the head of the platform of the line. It is recommended to increase business support for online head platforms, including online video, short video, live broadcasting, etc.;
4) In the medium to long term, we can also layout VR/AR in advance such online and offline integration of scenarios related to early hardware and software opportunities.
Risks
The refinancing risk of the related enterprises due to the prolonged shutdown and suspension of business;
The regulatory risk of the content/platform, such as the uncertainty of the release of the works that have already been produced or procured.
Continued...
This article is copyrighted by Merchants Bank Asset Management Department