Key investment points
Overall: last week (2022.02.07-2022.02.13), the CSI 300 rose or fell by 0.82%, the Shanghai stock index rose or fell by 3.02%, and the gem index rose or fell by – 5.59%. The basic chemical industry rose or fell by 3.94%, outperforming the Shanghai and Shenzhen 300 index by 3.12 percentage points, the Shanghai Composite Index by 0.82 percentage points and the gem by 9.53 percentage points. Its weekly rise and fall ranked 16th among the Shenwan level industries.
Sector: the new materials index rose or fell by – 1.07%, underperforming the CSI 300 index by 1.89 percentage points, outperforming the gem index by 4.52 percentage points and underperforming the Shanghai Composite Index by 4.09 percentage points. The prices of various sub industries in the new materials index sector are highly differentiated. The first two sub industries with increases are degradable plastics index (1.32%), silicone (1.14%), and the first three sub industries with decreases are lithium battery (- 14.07%), carbon fiber (- 11.62%) and lithium chemicals (- 8.91%).
Individual stocks: in the new materials sector, 61 stocks achieved positive returns. The top gainers were Farasis Energy (Gan Zhou) Co.Ltd(688567) (12.95%), Guizhou Zhenhua E-Chem Inc(688707) – U (10.60%), Crown Advanced Material Co.Ltd(688560) (10.26%); The stocks with the largest decline are: Contemporary Amperex Technology Co.Limited(300750) (- 17.32%), Jiangsu Yoke Technology Co.Ltd(002409) (- 17.17%), Guangdong Fangyuan Environment Co.Ltd(688148) (- 15.91%).
Valuation: as of February 13, 2022, the PE (TTM) of gem index is 51.58, the PE (TTM) of new materials sector is 38.29, and the premium rate relative to gem index is – 25.77%.
Industry highlights
1. Eight departments including the Ministry of industry and information technology: promote the safe echelon application of waste power batteries in the fields of power backup, charging and replacement
2. The national development and Reform Commission and the Energy Administration issued documents to promote the optimal combination of coal and new energy
3. Leverage the “100 billion” market! The power battery recycling track is highly sought after
4. In the past, there was the “flying” of the Winter Olympic torch, now there is the “bay area blue” of the high-speed train, and the application of China Petroleum & Chemical Corporation(600028) carbon fiber has made a new breakthrough
Core view
The steady growth trend appears, and the new material sector is expected to be repaired. On February 10, the central bank’s data showed that RMB loans increased by 3.98 trillion yuan in January, a record high in a single month, an increase of 394.4 billion yuan year-on-year; In January, the scale of social financing increased by 6.17 trillion yuan, also a record high, an increase of 984.2 billion yuan year-on-year; At the end of January, the stock of social financing scale was 320.05 trillion yuan, a year-on-year increase of 10.5%. Overall, the performance of credit and social finance data exceeded market expectations, and the steady growth trend began to appear. Under the stimulation of loose policies and the impact of rising crude oil prices, coal, petroleum and petrochemical, building decoration, building materials, steel and other sectors led the rise last week. We believe that in 2022, infrastructure, military industry, electric power, new energy and other industries will play the main role of “stable growth”, which is expected to drive the upstream basic chemical industry, new materials and other industries upward. Therefore, We continue to be optimistic about the new material sector.
Silicone market performance is calm, opportunities and challenges coexist. With the Bing dwen dwen Winter Olympic Games held successfully in Beijing, the mascot ice pier became a market explosive product, and its silicone material as its shell material was reacted evenly. At the beginning of the Spring Festival, the overall performance of the silicone market was relatively calm, and the price did not fluctuate significantly. From the demand side, the overall structure of organic silicon demand side will not change much in 2022, and the traditional fields such as building materials, electronics and appliances, textiles and medicine are still the main flow direction. In addition, the market demand for silicone materials in energy-saving and environmental protection industries such as photovoltaic and new energy will maintain medium and high-speed growth; Emerging fields such as UHV and UHV power grid construction and 3D printing will be one of the market growth points and breakthroughs of silicone materials. In 2022, when the silicone market is invested with a large amount of production capacity, the supply of goods will increase significantly. Although the downstream industries are also developing actively, the demand growth rate in traditional fields is less than that of production capacity, and the full development of new demand tracks will take some time. The elimination of silicone production capacity in 2022 will face no small test. On the whole, the organic silicon market in 2022 is full of opportunities and challenges, but with the demand for the improvement of people’s living standards and the strong support of national policies, the prospect of the organic silicon industry is worth looking forward to.
Risk tips
The risk that the epidemic situation may cause significant market fluctuations; Policy risk; The risk of technology development falling short of expectations.
