China Galaxy Securities Co.Ltd(601881) the research report was released on January 29, saying that the petrochemical industry was given a recommended (maintained) rating.
China’s crude oil demand fell for the first time in 2021, with a year-on-year decrease of 3.6%; in 2021, China processed 704 million tons of crude oil, with a year-on-year increase of 4.32%; The demand for crude oil was 709 million tons, down 3.58% year-on-year, the first decline in nearly 20 years, mainly due to the decline in crude oil imports; The output was 199 million tons, increasing for three consecutive years, with a year-on-year increase of 2.08%; Imported crude oil was 513 million tons, a year-on-year decrease of 5.42%; The degree of external dependence reached 71.95%, down 1.88 percentage points from the previous year, and continued to maintain an all-time high.
In 2021, China’s natural gas demand increased rapidly, with a year-on-year increase of 13.4%; in 2021, China’s natural gas demand was about 368.4 billion m3, with a year-on-year increase of 13.4%; The output was 205.3 billion m3, a year-on-year increase of 8.72%; The import of natural gas was 168.7 billion m3, with a year-on-year increase of 19.4%, mainly due to the large purchase of LNG to ensure energy supply; The degree of external dependence reached a new annual high of 44.3%, an increase of 2.39 percentage points over the previous year.
In 2021, China’s demand for refined oil increased by 10.3% year-on-year and its export volume decreased by 11.9% year-on-year; in 2021, China’s output of refined oil was 357 million tons, a year-on-year increase of 7.9%; The demand for refined oil was 320 million tons, a year-on-year increase of 10.3% and an increase of 3.06% over 2019. Demand performance continued to differentiate, with gasoline demand of 140 million tons, a year-on-year increase of 20.8%; Diesel demand was 147 million tons, a year-on-year increase of 4.6%; The demand for kerosene was 32.25 million tons, which continued to grow negatively, with a year-on-year decrease of 2.5%. The annual export volume reached 40.31 million tons, a year-on-year decrease of 11.9%, mainly due to the impact of lower export profits on export enthusiasm and the improvement of China’s demand.
Oil prices rose sharply in January: on the one hand, according to the data in December, OPEC + continued to implement the plan of increasing production by 400000 barrels per day per month, but the actual increase did not meet expectations; Since January, many smaller oil producing countries have been unable to increase supply, while some other oil producing countries are unwilling to produce too much crude oil to prevent the epidemic from hitting the economy again. On the other hand, the political tension between Russia and Ukraine, combined with the tension in the Middle East caused by the husai armed forces in Yemen, has exacerbated concerns that the already tight crude oil market may be further disturbed. As of January 27, Brent and WTI prices were US $89.34 and US $86.61 / barrel respectively, up about 15% from the beginning of the year.
Investment suggestion: since the beginning of the year, the yield of petrochemical industry has been – 5.1%, which is better than the whole market, ranking 24th among 109 secondary sub industries. As of January 28, the overall valuation of the petrochemical sector (PE (TTM)) was 10.18x. We are optimistic about the head enterprises with increased performance due to business layout and scale expansion. Since the beginning of the year, the adjustment of some targets is relatively large, which is the timing of layout. Key recommendations include satellite Chemistry (002648. SZ), Xinfengming Group Co.Ltd(603225) (603225. SH), Rongsheng Petro Chemical Co.Ltd(002493) (002493. SZ).
Risk tip: the risk of continuous decline of oil price, the risk of decline of industry prosperity, the risk of lower than expected revenue, etc.
