Talk every Monday:
According to the recently released annual performance forecast, the performance of modified plastics enterprises decreased significantly in 2021. We believe that the modified plastics industry is expected to usher in an inflection point in 2022. On the one hand, the price focus of raw materials such as polypropylene is expected to fall, which has a thickening effect on the performance. On the other hand, the recovery and lightweight trend of industries such as automobiles and household appliances will also promote the long-term improvement of the demand pattern. The modified plastics leaders with technical barriers and scale advantages will usher in the layout opportunity.
The price focus of raw materials is expected to move down. The main raw materials of modified plastics are PP, PE, ABS and other bulk commodities. Taking PP as an example, as the oil price rebounded and the export exceeded expectations, the price focus of PP rose from less than 8000 yuan / ton in 2020 to around 9000 yuan / ton in 2021, of which it once rose to a high of 10000 yuan / ton in September, which was a significant drag on the performance of modified plastics enterprises. However, after November last year, the prices of raw materials such as polypropylene have fallen back to the normal level. We believe that in 2022, with the accelerated production capacity of raw materials and the decline of high coal prices, the downward trend of the price focus of raw materials is expected to continue, which is good for modified plastic enterprises that need to extract raw materials
The demand pattern may be good for a long time, and the concentration of China's modified plastics industry is low. Although there are thousands of enterprises engaged in the production of modified plastics, there are less than 100 enterprises with a capacity of more than 3000 tons, and the top five enterprises account for only about 12% of the overall market. With the increasing pressure of China's environmental protection and the intensification of global competition, the industry concentration is expected to increase. From the demand side, the demand field of modified plastics is extensive and expanding, among which household appliances and automobiles are the most important downstream application industries of modified plastics. In addition, China's high-end modified plastics are still mainly imported, and the demand for import substitution is also huge in the future.
Investment strategy: in 2022, the price focus of raw materials in the modified plastics industry is expected to gradually decline, which has a thickening effect on the performance. In addition, the recovery and lightweight trend of automobile, household appliances and other industries will also promote the long-term improvement of the demand pattern. We believe that the modified plastics industry is expected to usher in an inflection point in 2022. We suggest paying attention to Kingfa Sci.& Tech.Co.Ltd(600143) with technical barriers and scale advantages Shanghai Pret Composites Co.Ltd(002324) and other modified plastic faucets.
Market review:
Sector performance: this week, CITIC's basic chemical sector fell 4.13%, and the composition of the Shanghai Composite Index fell 5.17%. Compared with the Shanghai Composite Index in the same period, the basic chemical sector led by 1.04 percentage points. In terms of sub sectors, the basic chemical sub sector mainly fell this week, with sub sectors such as potassium fertilizer, fluorine chemical industry, carbon fiber and inorganic salt leading the increase; Titanium dioxide, phosphorus fertilizer and phosphorus chemical industry, spandex, paint ink, other plastic products and other sub sectors led the decline
Rise and fall of individual stocks: the basic chemical sector led the rise this week, including Poly Union Chemical Holding Group Co.Ltd(002037) , Guizhou Redstar Developing Co.Ltd(600367) , Anhui Huaheng Biotechnology Co.Ltd(688639) , Shanghai Pret Composites Co.Ltd(002324) , Zhejiang Juhua Co.Ltd(600160) ; The leading stocks include Shenzhen Tongyi Industry Co.Ltd(300538) , Goody Science & Technology Co.Ltd(002694) , St Mingke, Guangxi Hechi Chemical Co.Ltd(000953) , St Chengxing, etc.
Risk tips: the risk of fluctuations in international oil prices, the risk of repeated global epidemics, etc.
