Industry core view:
Last week, the basic chemical industry index rose 4.17%, the Shanghai and Shenzhen 300 index rose 1.08% in the same period, and the basic chemical industry index outperformed the market by 3.09 percentage points in the same period. The petroleum and petrochemical index fell 0.31%, underperforming the market by 1.39 percentage points in the same period. Among them, Aba Chemicals Corporation(300261) (66.73%), Henan Qingshuiyuan Technology Co.Ltd(300437) (25.48%), Jiangsu Chengxing Phosph-Chemical Co.Ltd(600078) (21.15%), Zhuzhou Times New Material Technology Co.Ltd(600458) (18.23%), Yunnan Yuntianhua Co.Ltd(600096) (17.78%) ranked among the top five; The companies with the top five declines were: Shanxi Huhua Group Co.Ltd(003002) (- 21.65%), Skshu Paint Co.Ltd(603737) (- 13.48%), Poly Union Chemical Holding Group Co.Ltd(002037) (- 12.43%), Hunan Nanling Industry Explosive Material Co.Ltd(002096) (- 12.22%) and Tibet Gaozheng Explosive Co.Ltd(002827) (- 12.20%).
Key investment points:
Potash fertilizer: on February 15, the Chinese potash fertilizer import negotiation team and Canadian potash company (canpotex) reached an agreement on the contract price of potash fertilizer import in 2022. The final contract price is set at cfr590 US dollars / ton, which is valid until December 31, 2022, and other terms remain unchanged. The price of this agreement increased by 139% year-on-year, which is in line with market expectations and has played a certain support for the market price of potash fertilizer in China. At present, the peak of China’s spring ploughing and goods preparation is approaching, and the downstream demand for potassium fertilizer has warmed up. However, due to the tight supply of goods in the market, the price of potassium fertilizer still has an upward trend. According to the data of Baichuan Yingfu, as of February 18, the official quotation of China’s benchmark potassium chloride products at the station was 3490 yuan / ton, and the mainstream transaction price rose to about 4000-4100 yuan / ton. In addition, a new round of bidding for the national reserve of potash fertilizer was opened on February 18, with a sales price of 3000 yuan. The starting price of the corresponding maximum retail guidance price of chlorine based / sulfur based ternary compound fertilizer terminal is 2960 yuan / ton, and the subsequent National Reserve will increase slightly. However, considering the current strong demand for potash fertilizer and the low inventory of the factory, it is expected that the price of potash fertilizer will remain high and firm in the short term. It is suggested to pay attention to relevant leading enterprises.
Phosphorus chemical industry: on February 17, Yunnan Yuntianhua Co.Ltd(600096) announced that it had jointly signed the cooperation agreement on the whole industry chain project of new energy batteries with Yuxi Municipal People’s government, Eve Energy Co.Ltd(300014) , Yunnan Energy New Material Co.Ltd(002812) and Huayou holdings. All parties would jointly establish two joint ventures to develop, produce and sell new energy batteries and upstream and downstream materials of new energy batteries, supporting batteries, diaphragms Iron phosphate, lithium iron phosphate, copper foil and other projects, with a total investment of more than 50 billion yuan. Yunnan Yuntianhua Co.Ltd(600096) in this project, relying on its own advantages of phosphorus chemical industry chain, we will enhance the diversified and in-depth development of phosphate rock resources, accelerate the extension, transformation and upgrading of industrial chain, and further improve the sustainable development ability and comprehensive competitiveness of the company.
Investment suggestion: in 2022, we will mainly recommend three main investment lines: 1 Under the background of policy control, production and supply are becoming more stringent, while the demand side is still supportive in various sub sectors, such as pesticides, fertilizers and refrigerants; 2. Resource based chemical industry segments that rely on new energy and seek industrial transformation and upgrading from upstream materials, lengthen their business cycle and improve valuation, such as phosphorus chemical industry; 3. High value-added new materials with significant domestic substitution trend, such as semiconductor materials and display materials, which are key planning during the 14th Five Year Plan period.
Risk factors: the risk of continuous fluctuation of international crude oil price, the risk of repeated impact of epidemic situation in some parts of China on enterprise operation, and the risk of sharp fluctuation of chemical product price.
