From January 24 to 29, 2022, a total of 130 listed chemical enterprises issued the performance forecast of 2021 annual report. 75 companies recorded an increase in net profit attributable to their parents, of which 53 companies recorded a year-on-year increase of more than 50% in the lower limit of the change range of net profit attributable to their parents; 32 companies recorded a year-on-year decrease in net profit attributable to the parent company; 10 companies recorded turning losses into profits; 23 companies turned into losses.
Industry trends:
The performance forecast was released before the festival, and the performance of more than half of chemical enterprises was expected. From January 24 to 29, 2022, a total of 130 listed chemical enterprises issued the performance forecast of 2021 annual report. 75 companies recorded an increase in net profit attributable to their parents, of which 42 companies recorded a year-on-year increase of more than 100% and 53 companies recorded a year-on-year increase of more than 50%; 32 companies recorded a year-on-year decrease in net profit attributable to the parent company; 10 companies recorded turning losses into profits; 23 companies turned into losses.
In terms of molecular industries, among the enterprises that disclosed the performance forecast, the significant year-on-year increase in the net profit attributable to the parent is mostly concentrated in the sub industries such as chlor alkali, petroleum processing, polyester, pesticide and so on. Among them, except for Ningxia Younglight Chemicals Co.Ltd(000635) , the chlor alkali enterprises that disclosed the performance forecast achieved the growth rate of net profit attributable to the parent company, which was more than 50%. The performance attribution was related to the rise in the prices of PVC, caustic soda and other products. Except for Shenyang Chemical Co.Ltd(000698) , the growth rate of net profit attributable to the parent company of petroleum processing enterprises has exceeded 100%, and the performance attribution is related to the recovery of petrochemical product demand in 2021. The enterprises whose net profit is expected to decline year-on-year are mostly concentrated in the modified plastics and other chemical products industries, and the decline in net profit attributable to the parent company is mostly related to the rise in the price of raw materials.
In the process of rising raw material prices, enterprises that can continuously optimize the product structure and effectively transmit the price to the product price are more competitive. Zhejiang Juhua Co.Ltd(600160) in 2021, the net profit attributable to the parent company is expected to be 1.01-1.19 billion yuan, with a year-on-year increase of 959% – 1148%. Although the market price of raw materials fluctuated greatly, Zhejiang Juhua Co.Ltd(600160) actively gave full play to the advantages of industrial chain integration, optimized the product structure, overcome the adverse factors such as the fierce competition for the expected quota of the third generation fluorine refrigerants (HFCS), and maintained the stable growth of the production, sales and operating income of main products. China Petroleum & Chemical Corporation(600028) in 2021, the net profit attributable to the parent company is expected to reach 66.924-72.924 billion yuan, with a year-on-year increase of 103% – 122%. The net profit attributable to the parent company has reached the best level in the same period of nearly a decade. In 2021, the international crude oil price increased significantly year-on-year, China’s economy recovered steadily, and the demand for petroleum and petrochemical products recovered. China Petroleum & Chemical Corporation(600028) seize the favorable opportunity of the market, take the market as the guide, deeply carry out the optimization of the whole industrial chain, strive to expand the market and expand sales, strengthen cost and expense control, and greatly increase the gross profit of main businesses.
Investment suggestions:
This month’s view:
Cyclical industries: crude oil returned to a high level, and some petrochemical products returned to the rising trend: as of January 21, 2022, the monthly average price of 38% of the tracked products rose month on month; The average monthly price of 53% of products fell month on month; In addition, the price of 9% products was flat. As of January 21, 2022, WTI crude oil price rose by 13.3% month on month, and Brent crude oil price rose by 11.9% month on month. Industry data: the PPI index of the chemical industry in December was 115.4, down 3.1% from November. In terms of policies, RCEP has come into effect and is expected to boost the export of some chemical products; The comprehensive work plan for energy conservation and emission reduction in the 14th five year plan was issued, which pointed out to strengthen industrial process innovation, implement classified treatment of industrial clusters such as coating and chemical industry, and carry out cleaner production in key industries and resource utilization and transformation of industrial wastewater. Long term optimistic about the development of leading companies in the context of carbon neutrality.
Growth companies: the price of new energy materials has reached new highs, and the price of silicone has rebounded: as of January 25, 2022, the price of battery grade lithium carbonate has exceeded 370000 yuan / ton, and the average monthly price has increased by 39.4%; Organosilicon DMC closed at 31500 yuan / ton, with an average monthly price increase of 13.4%. In terms of semiconductor materials, 12 inch and 8-inch silicon wafers are in short supply. China has a large distribution capacity, but it still takes some time to put them into operation. Benefiting from the rapid development of downstream new energy vehicles, photovoltaic, semiconductor and other industries, the supply of some new materials in the upstream is tight or will become the norm.
Investment suggestions: looking forward to February, geopolitics will deepen supply side concerns, the impact of the epidemic on demand will gradually weaken, and oil prices may still have room to rise. From the perspective of sub industry prosperity, pesticides, infrastructure related chemicals, semiconductor materials and new energy materials are expected to maintain a high prosperity. From the perspective of valuation, after full adjustment, the valuation of private refining, industry leaders, new materials and other related chemical enterprises has returned to a low level again. In the medium and long term, with the sustainability of profits exceeding expectations, high-quality chemical assets are expected to usher in value revaluation. Recommended stocks: Wanhua Chemical Group Co.Ltd(600309) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Rongsheng Petro Chemical Co.Ltd(002493) , Zhejiang Nhu Company Ltd(002001) , Zhejiang Huangma Technology Co.Ltd(603181) , Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Lianhe Chemical Technology Co.Ltd(002250) , Lier Chemical Co.Ltd(002258) , Crystal Clear Electronic Material Co.Ltd(300655) , Valiant Co.Ltd(002643) , Sobute New Materials Co.Ltd(603916) , Shandong Sinocera Functional Material Co.Ltd(300285) etc.
February gold shares: Crystal Clear Electronic Material Co.Ltd(300655)
Risk tips
1) large fluctuations in oil prices caused by changes in geopolitical factors; 2) The global epidemic situation has changed.
