This week’s Chemical Market Overview
This week, the market experienced wide fluctuations. First, the growth stocks rebounded on Wednesday, then the market was under great pressure on Thursday due to the Russia Ukraine incident, and then the market sentiment was repaired on Friday. Among them, Shenwan chemical rose 147%, outperforming the Shanghai and Shenzhen 300 index by 314%. In terms of targets, lithium electrochemical materials, phosphorus chemicals, potassium fertilizer and lithium related targets performed strongly. At present, it is suggested to pay attention to two points in the chemical sector: first, what do growth stocks think? We still hold the previous view – although it is difficult to judge the short-term trend, from the medium-term perspective, the cost performance of some high-quality growth stocks has begun to highlight, and it is suggested to start the layout; Second, the impact of the Russia Ukraine incident on the chemical sector? We think it is difficult to judge how to deduce after the event. If it is implemented in investment, it will be partial to game.
Portfolio recommendation
\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 426 Shenzhen Wote Advanced Materials Co.Ltd(002886) Sichuan Em Technology Co.Ltd(601208) Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) Jiangsu Flag Chemical Industry Co.Ltd(300575)
Major events of this week
Zhejiang Huayou Cobalt Co.Ltd(603799) raise funds to build lithium battery material project Zhejiang Huayou Cobalt Co.Ltd(603799) announced that the company’s public issuance of convertible corporate bonds has been approved by the China Securities Regulatory Commission. The total amount of funds to be raised is 7.6 billion yuan. After deducting the issuance expenses, it will be used for the annual output of 50000 tons of ternary cathode materials of high nickel power batteries The 100000 ton ternary precursor material integration project and the 50000 ton / a ternary cathode material precursor project of high-performance power batteries, as well as the supplementary working capital. It is understood that since 2021, Zhejiang Huayou Cobalt Co.Ltd(603799) has continuously expanded the production capacity of ternary precursors, increased the control of upstream raw materials such as nickel and cobalt, cut into the field of lithium iron phosphate, and accelerated its integrated industrial layout of lithium battery materials.
The crisis in Ukraine has escalated, and the oil price has soared to $100! How much will the chemical industry be affected? Russian President Vladimir Putin said in a televised speech on the morning of the 24th that he decided to launch special military operations in the Donbas region. After Putin’s speech, the London Brent crude oil futures price for April delivery once rose to US $10004 per barrel, and the light crude oil futures price for April delivery on the New York Mercantile Exchange rose to US $9554 per barrel. This is the first time Brent crude oil has soared above $100 a barrel since 2014. Market analysts believe that the outside world is worried that the outbreak of conflict between Russia and Ukraine will impact the global energy supply and stimulate the soaring price of crude oil. Russia is the world’s major energy supplier, and Europe depends on it for about a quarter of its oil supply and a third of its natural gas.
Investment advice
After the recent roadshow, the market is concerned about the follow-up of the sector. Our understanding is that although it is difficult to judge the short-term trend of the sector, we can better judge the bottom of market value or valuation of high-quality stocks from the medium-term dimension, especially in the market environment of negative feedback. In terms of investment, we suggest to select individual stocks, especially the targets with gradually prominent cost performance, such as Sichuan Em Technology Co.Ltd(601208) , Shenzhen Wote Advanced Materials Co.Ltd(002886) .
Risk tips
The epidemic affects the demand outside China, the crude oil price fluctuates violently, and the change of trade policy affects the industrial layout.
