Key investment points
Performance of the sector this week: the overall market composite index rose slightly this week (February 21-february 25, the same below). The Shanghai Composite Index closed at 345141, up 0.63% this week, the Shenzhen cost index rose 1.21% and the basic chemical sector rose 0.66%. Performance of individual chemical stocks this week: the chemical sector rose steadily this week, and the increase was weaker than the market. The stocks with the highest gains include ST Lok material, Hubei Forbon Technology Co.Ltd(300387) , Sichuan Yahua Industrial Group Co.Ltd(002497) , Guofeng new material, Sanwei Holding Group Co.Ltd(603033) , Jiangsu Lopal Tech.Co.Ltd(603906) , Zhuzhou Feilu High-Tech Materials Co.Ltd(300665) , Qingdao East Steel Tower Stock Co.Ltd(002545) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) and Ningbo Henghe Precision Industry Co.Ltd(300539) . In February 22nd, No. 1 central document pointed out that vigorously promoting the construction of digital villages, implementing the subsidy policy for agricultural machinery purchase and application, and vigorously promoting the research of agricultural core technology. Hubei Forbon Technology Co.Ltd(300387) , as a fertilizer related enterprise, serves the new type of agriculture, and the stock price is rising rapidly. Overall, the share of agricultural stocks has been increasing very recently.
Crude oil market dynamics this week: the situation in Russia and Ukraine continues to heat up, and the international crude oil price fluctuates and rises. Ice oil distribution closed at US $97.93/barrel (mom + 4.69%); WTI crude oil closed at US $91.59/barrel (mom + 0.57%). Tracking of key chemicals: among the chemicals we focus on this week, liquid chlorine (+ 26.12%), yellow phosphorus (+ 15.63%), potassium chloride (+ 11.75%), naphtha (+ 10.53%) and fuel oil (+ 10.31%) led the price increase. In the liquid chlorine market this week, enterprises in Central China controlled the shipment of liquid chlorine, and the supply decreased slightly. After the Winter Olympic Games, the starting demand of downstream enterprises increased, the transaction focus increased, and the price of liquid chlorine increased. This week, the snowfall in the southwest of the yellow phosphorus market led to supply difficulties. Superimposed on the early inventory consumption, some downstream enterprises have just needed procurement plans, and the price of yellow phosphorus pushed up.
The market prospect of biopesticides is broad, and multinational pesticide giants are competing for layout: with the increasing awareness of ecological environment protection and food safety in human society, the international community puts forward more stringent requirements for chemical pesticides. Environmental friendly biopesticides with low toxicity, low residue, high biological activity and high selectivity will become the development direction of pesticides in the world in the future. According to the report "current situation and development trend of global biopesticide development" of the national biopesticide engineering technology research center and the data of transparency market research, the biopesticide market is expected to reach US $9.5 billion in 2025, and the CAGR will reach 13.91% from 2017 to 2025. The market space is large and the growth rate is fast, attracting pesticide giants to compete for layout.
Main lines of Chemical Investment: (1) cyclical growth stocks are expected to improve marginally: since the turning point of Q2 chemical boom in 2020, the prices of some chemicals have risen to historic highs. As the mismatch between supply and demand moves towards balance and superimposes the downward pressure of the economy, the traditional chemical cyclical stocks have made a sharp correction. We believe that we should focus on the industry leaders with continuous production expansion capacity in the 14th five year plan, supplement the price with quantity, especially the high-quality companies that embrace change and look for the second growth curve, which are expected to cross the cycle in the medium and long term. Key recommendations: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , satellite chemistry, China National Chemical Engineering Co.Ltd(601117) , Ningxia Baofeng Energy Group Co.Ltd(600989) , lithium iron phosphate industry chain and soda ash industry chain. (2) Focus on high-end manufacturing and supporting materials for high-tech industries, including biosynthesis, electronic materials, degradability, tail gas treatment, carbon fiber, etc. Key recommendations: Haohua Chemical Science & Technology Corp.Ltd(600378) , Valiant Co.Ltd(002643) . (3) For the pesticide industry chain entering the business cycle, it is recommended to: Jiangsu Yangnong Chemical Co.Ltd(600486) , Anhui Guangxin Agrochemical Co.Ltd(603599) .
Risk warning: crude oil supply fluctuates sharply; The situation of trade war worsened; Risk of large exchange rate fluctuations
