Key investment points
Overall: last week (2022.02.14-2022.02.20), the CSI 300 rose or fell by 1.08%, the Shanghai stock index rose or fell by 0.80%, and the gem index rose or fell by 2.93%. The basic chemical industry rose or fell by 3.16%, outperforming the Shanghai and Shenzhen 300 index by 2.08 percentage points, the Shanghai Composite Index by 2.36 percentage points, and the gem by 0.23 percentage points. Its weekly rise and fall ranked sixth among the Shenwan level industries.
Sector: the new material index rose or fell by 4.03% last week, outperforming the CSI 300 index by 2.95%, the gem index by 1.10% and the Shanghai Composite Index by 3.23%. The prices of all sub industries in the new materials index sector generally rose, and the top three sub industries were lithium chemicals (9.48%), carbon fiber (7.37%) and lithium battery (6.34%).
Individual stocks: in the new materials sector, individual stocks with positive returns accounted for 78%. The top gainers were Zhuzhou Times New Material Technology Co.Ltd(600458) (18.25%), Guangzhou Great Power Energy&Technology Co.Ltd(300438) (16.64%), Shenzhen Dynanonic Co.Ltd(300769) (16.48%); The stocks with the largest decline are: Shenzhen Jinjia Group Co.Ltd(002191) (- 6.30%), Ningbo Changhong Polymer Scientific & Technical Inc(605008) (- 4.97%), Pan Asian Microvent Tech (Jiangsu) Corporation(688386) (- 4.15%).
Valuation: as of February 20, 2022, the PE (TTM) of the gem index was 53.35, and the PE (TTM) of the new materials sector was 39.49, with a premium rate of – 25.97% relative to the gem index.
Industry highlights
1. LG chemistry cooperates with Koryo university to develop technologies such as biodegradable plastics and new generation battery materials
200 million yuan, 200 million yuan! Contemporary Amperex Technology Co.Limited(300750) it is proposed to invest in the negative pole project of lithium battery with an annual output of 100000 tons
3. Guangzhou Tinci Materials Technology Co.Ltd(002709) : it has a processing capacity of 20000 tons of lithium iron phosphate battery
Core view
Steady growth is gradually heating up, and new materials are recovering in the spring. With the implementation of easing policies, a new round of “easing cycle” has been opened, and the expectation of steady growth has gradually warmed up. For a long time, China’s backward development of high-end materials and insufficient innovation capacity have led to high dependence on the import of high-end materials and the inability to achieve self-sufficiency of domestic products. In the past two years, with the support of national macroeconomic policies and industrial policies, the domestic substitution process of high-end materials relying on imports is expected to accelerate. In addition, thanks to the improvement of the prosperity of new energy, high-end manufacturing, military industry and other industries downstream of the terminal of the material industry, it helps to drive the technological breakthrough and business expansion of relevant new material enterprises in China. Therefore, we continue to be optimistic about the new material sector. Generally speaking, the new material industry should still focus on three investment logics:
1) import substitution: pay attention to cost performance and market development ability. The current localization substitution trend remains unchanged. In the future, enterprises will obtain competitive advantages at low cost on the basis of narrowing the gap. It is suggested to continue to pay attention to the semiconductor material sector and the only high-quality enterprise Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) and Red Avenue New Materials Group Co.Ltd(603650) with ARF photoresist production capacity in China; Leading enterprises in the field of electronic gas Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) , Jiangsu Yoke Technology Co.Ltd(002409) , Guangdong Huate Gas Co.Ltd(688268) ; Wet chemical faucet Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) and other targets.
2) policy promotion: Based on the industrial foundation, grasp the policy rhythm. Continue to pay attention to the evolution of policies in relevant industries, focus on the introduction of policies, especially the government resources of enterprises. It is suggested to pay attention to the degradable plastics sector still in the period of policy introduction, the industry leader Cathay Biotech Inc(688065) , and the targets such as Henan Jindan Lactic Acid Technology Co.Ltd(300829) and Cofco Biotechnology Co.Ltd(000930) that have achieved the breakthrough of lactide core technology.
3) consumption upgrading: pay equal attention to technological innovation and market development ability. New energy, military industry, high-end manufacturing and other industrial chains will still maintain a high boom under the background of industrial logic, and consumption upgrading is expected to drive the demand of the upstream material market.
Risk tips
The risk that the epidemic situation may cause significant market fluctuations; Policy risk; Risk of technology development falling short of expectations
