Core view
Review of the market in 2021: the basic chemical industry sector will "develop in the future" in 2021, with an annual increase of 37.2%, ranking fourth among Shenwan's 31 primary sub industries. The annual rise and fall of the basic chemical sector outperformed the Shanghai and Shenzhen 300 index by 40.08 percentage points. There are seven secondary sub industries under the basic chemical sector, which have increased throughout the year. Among them, non-metallic materials have the best rising momentum, with an increase of 136.3%. Chemical raw materials, agrochemical products, rubber and chemical products have a good rising momentum, with an increase of 59.0%, 52.5%, 42% and 37.1% respectively; Chemical fiber and plastic increased by 4.8% and 1.6% respectively. From the perspective of the overall sector valuation level, the overall valuation PE of basic chemical industry at the end of 2021 was about 20.17 times, slightly lower than the industry's average p / E ratio of 25.26 times in recent five years.
Performance outlook for 2021: according to the published forecast data, most companies in seven sub industries expect performance growth in 2021. Chemical raw materials, chemical products, chemical fiber, plastics, rubber, agrochemical products and non-metallic materials accounted for 96%, 71%, 79%, 68%, 67%, 84% and 83% of the enterprises with year-on-year increase in net profit respectively. Driven by energy transformation, new energy materials, photovoltaic and other emerging industries drive the demand growth of upstream basic chemical sub sectors; At the same time, the rising price of energy products also supports the high price of bulk chemicals. Driven by the market situation, it is expected that the performance of all sectors in the fourth quarter and the whole year of 2021 will be excellent, among which the performance of chemical raw materials and agrochemical products is expected to increase significantly.
Outlook for 2022: the prices of most chemical products will rise and profits will increase in 2021, and the upward trend in 2022 is expected to continue. Among the secondary sub industries of Shenwan chemical industry, we selected three fine molecular industries concerned by the market to look forward to the future development of the industry: (1) chemical raw materials: soda ash chemical industry, driven by photovoltaic, the demand continues to increase. According to the data of Baichuan Yingfu, the apparent consumption of photovoltaic glass in China in 2021 was 8.963 million tons, a year-on-year increase of 10.72%. In terms of Shanghai Chlor-Alkali Chemical Co.Ltd(600618) , capacity growth is limited and the stock advantage is obvious. With the rapid progress of the "plastic restriction order", the demand of Shanghai Chlor-Alkali Chemical Co.Ltd(600618) in the field of BDO is expected to grow rapidly. In 2021, the apparent consumption of BDO reached 1684600 tons, an increase of 22.1% year-on-year and 78.8% over 2016. (2) Chemical products sector: in terms of titanium dioxide, the industry boom continues and the industry continues to upgrade. In recent years, the new environmental protection policy has been increasingly strict to replace the old titanium dioxide in China. At the same time, the accelerated layout of titanium dioxide enterprises in the field of new energy cathode materials will promote the upgrading of industrial structure and bring more development opportunities. In terms of fluorine chemical industry, it is booming driven by new energy vehicles, and the volume and price of lithium hexafluorophosphate rise at the same time. As of February 7, 2022, the latest quotation of LiPF6 is 575000 yuan / ton, which has reached a new high in recent three years, an increase of 576.5% compared with 85000 yuan / ton in early 2020. (3) Agrochemical products: phosphorus chemical industry has entered a high growth stage driven by the new energy industry. Since 2021, the volume and price of lithium iron phosphate have risen simultaneously, and the boom has risen. As of February 7, 2022, the average market price of lithium iron phosphate in China was 133000 yuan / ton, up 209.30% year-on-year and 259.46% compared with the beginning of last year. Traditional phosphorus chemical enterprises have transformed into new energy racetracks, with obvious stock advantages and expected incremental development. In terms of potash fertilizer, the industry ended its ten-year downturn and entered an upward channel. As of February 7, 2022, the average market price of potassium chloride in China has been reported at 3475 yuan / ton, with a year-on-year increase of 70.85%. At present, it is still in an upward trend. Driven by supply and demand factors, the prosperity of potassium chloride industry is rising, and relevant enterprises are expected to usher in profit growth.
Investment advice
In the basic chemical industry, high-quality targets in some sub industries with high prosperity may benefit, such as: Hubei Yihua Chemical Industry Co.Ltd(000422) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Qinghai Salt Lake Industry Co.Ltd(000792) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Lb Group Co.Ltd(002601) , Inner Mongoliayuan Xing Energy Company Limited(000683) .
Risk tips
The price of energy products fluctuates abnormally, the overseas epidemic worsens, and the safety and environmental protection policies are upgraded.
