Event:
\u3000\u30001. Before the Spring Festival, the average inventory of polyester bottle chip factory in January was 22200 tons, the lowest level in three years; During the festival, the inventory accumulated due to the shutdown of downstream manufacturers, but the average inventory since February is still low, only 14.52% of the average in February of the previous three years.
\u3000\u30002. As of the second week of February, European and American countries have successively cancelled comprehensive epidemic prevention measures.
Key investment points:
China’s consumption continues to be strong, and the social inventory and factory inventory are at a low level. Under the impact of the epidemic in 2020, the price of bottle chips follows its upstream raw materials PTA and MEG. Because bottle chips are linked to just needed consumer goods, traders actively hoard goods at low prices, pushing up social inventory and taking profits in the peak season of 2021, As a result, the domestic demand (actual consumption + social inventory) data of the current year increased by only 3% month on month. In fact, after excluding the impact of social inventory, the consumption of bottles and chips in 2021 is more vigorous than that in 2020, and the social inventory and factory inventory have been continuously cleared, which are now at a historical low.
Overseas demand recovered and the export boom of bottles and chips continued
Previously, due to the spread of overseas epidemic, the export volume of bottles and tablets in 2020 was significantly lower than that in 2019, while it showed a month by month year-on-year repair trend in 2021, but the export volume in spring and summer was still slightly lower than that in 2019. With the improvement of overseas vaccination rate and the progress of oral drugs, the overseas economy has been repaired in fluctuations. Combined with the impact of the clearing of production capacity of some overseas factories and accidents, the export volume of bottles and tablets increased significantly in 2021q4, and the monthly export volume in December 2021 hit a new high since 2019: it exceeded 400000 tons, an increase of 125% compared with the same period in 2019. With the cancellation of comprehensive epidemic prevention measures in Europe and the United States, the impact of the epidemic on the export of bottles and tablets may be further reduced, and the subsequent export is expected to maintain prosperity.
The tight supply and demand pattern of bottle chips continues to the traditional peak season
The downstream of polyester bottle chip is mainly bottled water and soft drinks, and its traditional peak season in China is spring and summer. In the traditional off-season of autumn and winter in 2021, the supply and demand is still tight, and the inventory continues to decline. The monthly average inventory in January 2022 decreased by 23% month on month; During the Spring Festival, the downstream factories continued to shut down until after the 15th day of the first month, which made the inventory of bottle and chip factories accumulate (rising to 43700 tons in the first week after the festival, and the average inventory in the first two weeks of February was 28500 tons). Due to the limited increase in production capacity this year and the factory’s undelivered orders continued to be full, with the continuous improvement of the operating rate of downstream factories, there is a high probability that supply and demand will remain tight in the peak season of spring and summer.
Investment opportunities
In the middle and downstream industry chain of bottle chip industry, we mainly recommend Jiangsu Sanfame Polyester Material Co.Ltd(600370) (600370. SH) (maintain the “buy” rating), and suggest paying attention to China Resources Chemical Innovative Materials Co.Ltd(301090) (301090. SZ) and Shanghai Zijiang Enterprise Group Co.Ltd(600210) (600210. SH).
Risk tips
Global macroeconomic downside risk; The risk of sharp fluctuations in commodity prices; The risk that the project progress is not as expected; The risk that the downstream demand is less than expected; Anti dumping and other international trade policy risks.
