This week, the prosperity index of Guohai chemical industry was 168.47, up 2.04 month on month. Comprehensively consider the operation and prosperity of chemical enterprises, and give the industry a “recommended” rating.
Investment suggestion: invest in the subject matter with expansion capacity, the subject matter of downstream industries and the subject matter of new materials.
The central economic work conference requires that the economic work in 2022 should be stable and seek progress while maintaining stability. All regions and departments should shoulder the responsibility of stabilizing the macro economy, and all parties should actively launch policies conducive to economic stability, with appropriate policy force. A stable economic environment is more favorable to leading enterprises.
Looking forward to 2022, we believe that chemical industry leaders, downstream industries and new material industries are the key directions. This year, the problem of suppressing the capacity expansion of leading enterprises is expected to be gradually alleviated, the loss of profits in downstream industries due to high raw material costs will be alleviated, and the new material industry will be driven by new energy and emerging industries to usher in a good opportunity for development.
The tire industry has entered the strategic layout period. We judge that 2021q3 is the lowest point of the industry. In 2021q4 and 2022q1, the profits of the tire industry begin to improve. Based on three judgments, first, the supply shrinks and small and medium-sized tire enterprises begin to shut down. According to the data of Zhuo Chuang information, on January 27, 2022, the operating rate of Shandong semi steel tire enterprises was 40.5%, and the operating rate under normal conditions was about 70%, The operating rate of Shandong all steel tire enterprises is 20.5% and above 70% under normal conditions. Dual control and negative cash flow are two reasons, especially the net operating cash flow of some listed companies in the second quarter of 2021 has turned negative; Second, the price of sea freight has been loosened. This week, the FBX index from China to western US ports was US $15145.2/feu, up 3.47% from last week; The FBX index from China to Meidong port was US $16986.2/feu, down 2.87% from last week; Third, in December 2021, China’s monthly output of commercial vehicles was 380000, an increase of 7.7% month on month, the output of automobiles was 2.91 million, an increase of 12.5% month on month, and the output of trucks was 331000, an increase of 6.9% month on month. The bottom of the tire is reversed. Under the background of supply contraction and demand improvement, according to incomplete statistics of China tire commercial WeChat official account, 15 tire enterprises announced the price increase in 2022. Overall, the price increase of this round is more than 2%-5%, and the highest increase is 10%. Nine tire enterprises in foreign markets have announced price increases, with a maximum price increase of 16%. We believe that the profit margin level of tires will gradually recover. In the long run, Chinese tire enterprises have outstanding cost performance advantages in the middle and low-end market, import substitution in the high-end market through channel forces, and the two major trends of internationalization and branding are irreversible. They focus on Shandong Linglong Tyre Co.Ltd(601966) , Sailun Group Co.Ltd(601058) , Qingdao Sentury Tire Co.Ltd(002984) . These three enterprises have a significant expansion of overseas production capacity in 2022, as well as rubber additive enterprises Shandong Yanggu Huatai Chemical Co.Ltd(300121) and conveyor belt enterprises Zhejiang Double Arrow Rubber Co.Ltd(002381) .
Wanhua Chemical Group Co.Ltd(600309) has entered a period of rapid expansion. We believe that the core means to achieve the goal of carbon peak and carbon neutralization in the chemical industry is to use technological innovation to bring changes in energy structure, energy consumption level, raw material structure and product structure. Technological innovation is the key, and innovation can continue to grow. The R & D cost of Wanhua Chemical Group Co.Ltd(600309) in the third quarter of 2021 reached 930 million yuan, The construction in progress is 28.1 billion yuan, accounting for 46% of the fixed assets, of which the cash inflow of fixed assets purchased and constructed in the third quarter reached 7.6 billion yuan, reaching a record high. According to the environmental impact assessment, Wanhua Fujian Industrial Park plans to expand the MDI project to 1.6 million tons / year (Wanhua isocyanate company), and the TDI project to 360000 tons / year (Wanhua Fujian), Wanhua Chemical Group Co.Ltd(600309) enters the rapid expansion period. We expect that Wanhua Chemical Group Co.Ltd(600309) 10000 tons of ternary battery materials and 60000 tons of biodegradable polyester materials are expected to be put into operation in 2022, bringing new catalysts. Under the dual carbon background, Wanhua Chemical Group Co.Ltd(600309) MDI, as an excellent thermal insulation material, is expected to usher in a period of demand explosion. Moreover, the company focuses on Wanhua Chemical Group Co.Ltd(600309) because of its R & D and innovation ability, capacity expansion and worry free growth. On January 21, Shandong Provincial People’s government issued a notice on the list of major projects in the province in 2022, Including Wanhua Yantai Industrial Park high-end fine chemicals integration project (annual output of pochp4 million tons, citral 48000 tons, methylamine 100000 tons, TMP 50000 tons, maleic anhydride 200000 tons, polyurethane curing agent 30000 tons, polyether polyol 850000 tons) and Wanhua Chemical Group Co.Ltd(600309) annual output of 480000 tons of bisphenol A integration project (annual output of 530000 tons of cumene, 650000 tons of phenol acetone and 480000 tons of bisphenol A). In addition, In the list of major preparatory projects in the province in 2022, the integration project of high-performance new materials in Wanhua Penglai Industrial Park is related to Wanhua.
The prosperity of phosphorus chemical industry is sustainable, and the transformation of new energy is in progress. The price of phosphate rock continued to rise, from 350 yuan / ton at the end of 2020 to 627.5 yuan / ton at present, an increase of 79%; The wet process industrial monoammonium in Southwest China was adjusted from 5300 yuan / ton on September 23, 2021 to 5550 yuan / ton on January 28, 2022, and reversed upward again; The price of yellow phosphorus was adjusted back to 31000 yuan / ton, up 30% from 23500 yuan / ton in August 2021; Enterprises with industrial chain integration will benefit. In addition, the export volume of monoammonium phosphate, diammonium phosphate and compound fertilizer decreased significantly in August 2021, and the export was limited. As a compound fertilizer industry with squeezed terminal profits, the profits gradually improved. In the first half of 2022, Xinyangfeng Agricultural Technology Co.Ltd(000902) and Guizhou Chanhen Chemical Corporation(002895) iron phosphate will be put into operation, and the phosphorus chemical industry chain is still in the transition period from traditional chemical fertilizer industry to new energy materials. We focus on phosphorus chemical enterprises with industrial chain integration and fast transformation speed, including Xinyangfeng Agricultural Technology Co.Ltd(000902) , Guizhou Chanhen Chemical Corporation(002895) , Chengdu Wintrue Holding Co.Ltd(002539) , Yunnan Yuntianhua Co.Ltd(600096) , Hubei Xingfa Chemicals Group Co.Ltd(600141) , Shenzhen Batian Ecotypic Engineering Co.Ltd(002170) , Hubei Yihua Chemical Industry Co.Ltd(000422) , Shanghai Zhongyida Co.Ltd(600610) and other enterprises. Shanghai Zhongyida Co.Ltd(600610) merger draft has been released.
Satellite chemical phase I ethylene project is gradually put into operation. According to Xinhua news agency, China and the United States have agreed to increase the export of agricultural products and energy from the United States. Satellite chemical will be encouraged to import ethane from the United States. The continuous implementation of satellite chemical light hydrocarbon integration project deserves special attention.
The leading development of coal chemical industry has ushered in a turnaround. With the relaxation of raw material energy consumption policy, the coal chemical projects blocked in the early stage are expected to be implemented, and the growth of enterprises such as Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Ningxia Baofeng Energy Group Co.Ltd(600989) , Luxi Chemical Group Co.Ltd(000830) is prominent.
Private refining ushered in a good opportunity for development. The large-scale refining and chemical projects are gradually extending downstream, and a series of new chemical material projects are expected to be implemented, focusing on Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengyi Petrochemical Co.Ltd(000703) , Tongkun Group Co.Ltd(601233) and other enterprises.
At the same time, pay attention to Jiangsu Yangnong Chemical Co.Ltd(600486) with the sharp rise in the price of Kungfu pyrethrin, Anhui Jinhe Industrial Co.Ltd(002597) with the continuous rise in the price of sugar substitutes, Shandong Sinocera Functional Material Co.Ltd(300285) and Valiant Co.Ltd(002643) that can still maintain the performance growth under the pressure of the rise in the price of raw materials, and Lb Group Co.Ltd(002601) expanding to new energy materials.
Chemical industry leaders are the kings of the future. According to our observation, there are a number of leading companies in China’s chemical industry. Compared with international competitors, they show obvious efficiency advantages in terms of rate of return, labor efficiency and turnover.
The slowdown of China’s GDP growth and the control of carbon emissions in the future have led to the concentration of resources in all aspects to the leading chemical enterprises, superimposed with intelligent manufacturing, R & D and innovation, and the increase of the leading market share is accelerating. At present, we believe that China’s leading companies have the ability to plan a global blueprint and move towards global leaders. We suggest that we should work with excellent enterprises and invest in those enterprises with efficient execution. This efficient ability will make the profitability of Chinese enterprises higher than that of international competitors, with higher rate of return and larger scale in the future. Therefore, the market value of foreign giants is far from the ceiling of Chinese enterprises. For example, Wanhua Chemical Group Co.Ltd(600309) , which is building an integrated industrial chain, continuously increasing R & D investment, multi category expansion and moving towards a first-class chemical new material company with global operation, has made a synchronous breakthrough in original replacement, China and foreign countries go hand in hand, and is aiming at the top five Shandong Linglong Tyre Co.Ltd(601966) in the global tire industry in 2030, with high starting point, high standard Build Hengli Petrochemical Co.Ltd(600346) and Rongsheng Petro Chemical Co.Ltd(002493) of world-class refineries with high efficiency.
We focus on the leaders in various sub sectors that are still undervalued, such as Wanhua Chemical Group Co.Ltd(600309) , the leader in the tire industry Shandong Linglong Tyre Co.Ltd(601966) , as well as Sailun Group Co.Ltd(601058) and Qingdao Sentury Tire Co.Ltd(002984) , private refining giants ( Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Tongkun Group Co.Ltd(601233) , Hengyi Petrochemical Co.Ltd(000703) , Xinfengming Group Co.Ltd(603225) ), the leader in the field of compound fertilizer Xinyangfeng Agricultural Technology Co.Ltd(000902) and Chengdu Wintrue Holding Co.Ltd(002539) , the leader in rubber additives Shandong Yanggu Huatai Chemical Co.Ltd(300121) Viscose staple fiber faucet Tangshan Sanyou Chemical Industries Co.Ltd(600409) , vitamin faucet Zhejiang Nhu Company Ltd(002001) , coal chemical faucet Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , new coal chemical faucet Ningxia Baofeng Energy Group Co.Ltd(600989) , pesticide faucet Jiangsu Yangnong Chemical Co.Ltd(600486) , glufosinate faucet Lier Chemical Co.Ltd(002258) inorganic new material faucet Shandong Sinocera Functional Material Co.Ltd(300285) , satellite chemistry in C2 / C3 field, sweetener faucet Anhui Jinhe Industrial Co.Ltd(002597) , plant growth regulator faucet Sichuan Guoguang Agrochemical Co.Ltd(002749) , titanium dioxide faucet Lb Group Co.Ltd(002601) Spandex and adipic acid leaders Huafon Chemical Co.Ltd(002064) , organic fine chemicals leaders Valiant Co.Ltd(002643) , dicamba enterprises Jiangsu Changqing Agrochemical Co.Ltd(002391) , oil chemical leaders Zanyu Technology Group Co.Ltd(002637) , etc.
The US Department of Commerce issued a statement on May 15, 2020 local time, saying that the strategic position of semiconductor materials has become increasingly prominent by comprehensively restricting Huawei’s purchase of semiconductors produced with us software and technology. It is suggested to pay attention to Rayitek Hi-Tech Film Company Ltd.Shenzhen(688323) , Jiangsu Yoke Technology Co.Ltd(002409) , Jingrui shares, Changzhou Tronly New Electronic Materials Co.Ltd(300429) , Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) , Zhejiang Juhua Co.Ltd(600160) , Haohua Chemical Science & Technology Corp.Ltd(600378) , Hubei Dinglong Co.Ltd(300054) and other enterprises. In addition, we hope that the new materials will continue to expand continuously, and have strong technical content of polymer anti-aging leader Rianlon Corporation(300596) , thermoplastic elastomer head Shandong Dawn Polymer Co.Ltd(002838) , brine extraction lithium technology leader Sunresin New Materials Co.Ltd Xi’An(300487) .
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[ Wanhua Chemical Group Co.Ltd(600309) ] according to Zhuo Chuang information, the price of pure MDI was 21500 yuan / ton on January 28, 2022, unchanged month on month on January 21, 2022; The price of polymerized MDI is 21750 yuan / ton, up from + 775 yuan / ton on January 21, 2022. On January 28, 2022, Wanhua Chemical Group Co.Ltd(600309) announced the price of MDI in China in February 2022. Since February 2022, Wanhua Chemical Group Co.Ltd(600309) the listing price of aggregated MDI in China is 22800 yuan / ton (1300 yuan / ton higher than the price in January); The listing price of pure MDI is 23800 yuan / ton (1300 yuan / ton higher than the price in January). On January 27, 2022, Wanhua Chemical Group Co.Ltd(600309) announced the resumption of MDI plant production in Ningbo plant. The MDI phase I plant (400000 tons / year) of the company’s wholly-owned subsidiary Wanhua Chemical Group Co.Ltd(600309) (Ningbo) Co., Ltd. began to stop production and maintenance on November 27, 2021, and the MDI phase II plant (800000 tons / year) began to stop production and maintenance on December 11, 2021. Up to now, the shutdown and maintenance of the above MDI plant has been completed, Resume normal production.
[ Shandong Linglong Tyre Co.Ltd(601966) ] according to Bloomberg, the FBX index from China to western US ports this week was US $15145.2/feu, up 3.47% from last week; The FBX index from China to Meidong port was US $16986.2/feu, down 2.87% from last week; The FBX index from China to Europe was US $14578.3/feu, up 1.01% month on week. On January 29, 2022, Shandong Linglong Tyre Co.Ltd(601966) issued the announcement of annual performance reduction in 2021. It is estimated that the net profit attributable to shareholders of Listed Companies in 2021 will be RMB 880 million to RMB 1.1 billion, a decrease of RMB 1.12 billion to RMB 1.34 billion compared with the same period of last year, a year-on-year decrease of 50% to 60%. The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses is expected to be 750 million yuan to 950 million yuan, a decrease of 1.14 billion yuan to 1.34 billion yuan compared with the same period of last year, a year-on-year decrease of 54% to 64%. According to the forecast information, the net profit attributable to shareholders of Listed Companies in the single quarter of 2021q4 was – 50 million yuan to 170 million yuan, with a median of 60 million yuan, a decrease of 62.5% from 160 million yuan in 2021q3 and 90.3% from 620 million yuan in 2020q4. The net profit attributable to the parent company after deducting non-profit in 2021q4 was – 70 million yuan to 130 million yuan, with a median of 30 million yuan, a decrease of 78.4% compared with 139 million yuan in 2021q3 and 94.9% compared with 592 million yuan in 2020q4. In 2021, Q4 company’s performance continued to decline and close to loss. We believe that it is mainly due to the month on month increase in the price of raw materials in 2021q4 and the continuous increase in freight from Thailand to Europe and the United States. At the same time, it also reflects the huge pressure currently faced by the whole tire industry. From the situation that the annual performance forecast of 2021 has been disclosed, the performance of Shandong Linglong Tyre Co.Ltd(601966) is basically consistent with the trend of the industry. The net profits of Gui Zhou Tyre Co.Ltd(000589) , Aeolus Tyre Co.Ltd(600469) , Jiangsu General Science Technology Co.Ltd(601500) , Qingdao Doublestar Co.Ltd(000599) and other companies after non deduction of Q4 in 2021 all fell month on month, and the operation of the whole Chinese tire industry is still deteriorating. Although the pressure on 2021q4 continues to increase, we believe that the performance reversal of Shandong Linglong Tyre Co.Ltd(601966) is in sight. Based on the following judgment: 1) after two years of construction, the Serbian project is about to be put into operation. Under the condition of high freight charges, the Serbian base will contribute to the performance increment. Due to the shortage of tires in Europe and America caused by sea freight charges, we think the profit of the Serbian base is worth looking forward to. 2) In the fourth quarter, China’s listed tire companies gradually began to lose money. As the cost composition of the tire industry is mainly composed of raw materials, we expect a large number of tire enterprises to lose money to cash flow, followed by the shutdown of large-scale tire enterprises, and the tire price has begun to rise. 3) We have observed that China’s demand for commercial vehicles has gradually reversed and China’s economic policy will gradually increase. Under the difficult situation of the tire industry, it is difficult for the price of raw materials to remain high; Meanwhile, with the increase of covid-19 epidemic prevention and control measures, the gradual withdrawal of U.S. economic stimulus policy and the strengthening of global shipping congestion control, the sea freight price is expected to be reduced in the future.
[ Sailun Group Co.Ltd(601058) ] on January 25, 2022, Sailun Group Co.Ltd(601058) issued a progress announcement on providing guarantee to subsidiaries. On January 21, 2022, according to the needs of business development, Sailun (Dongying) Tire Co., Ltd. and Qingdao Branch of Nanyang Commercial Bank (China) Co., Ltd. signed the trust amount agreement, The company signed the maximum guarantee contract with Nanyang Commercial Bank to provide joint and several liability guarantee for the above agreement.
[ Qingdao Sentury Tire Co.Ltd(002984) ] no update message yet.
[ Hengli Petrochemical Co.Ltd(600346) ] according to Zhuo Chuang information, the inventory of polyester filament on January 27 was 18.7 days, up + 2.2 days month on month; PTA1 had an inventory of 3.32 million tons on August 28, with a month on month increase of + 36000 tons. On January 28, the price of polyester filament FDY was 8200 yuan / ton, up from – 50 yuan / ton on January 21; On January 28, PTA price was 5490 yuan / ton, up from + 285 yuan / ton on January 21. On January 27, the company announced that its subsidiary Hengli Petrochemical Co.Ltd(600346) (Dalian) new materials technology Co., Ltd. plans to invest 1.9988 million yuan to build a 1.6 million ton / year high-performance resin and new materials project, and plans to invest 4.001 billion yuan to build a high-performance polyester project with an annual output of 2.6 million tons. After the project reaches production and efficiency, it is expected to realize a net profit of 6.864 billion yuan and 842 million yuan respectively.
[ Rongsheng Petro Chemical Co.Ltd(002493) ] on January 29, Rongsheng Petro Chemical Co.Ltd(002493) released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company in 2021 will be 12.5-13.3 billion yuan
