Strategy of chemical industry in 2022: under the background of double carbon, the chemical business cycle continues, and new chemical materials boost the transformation of old and new kinetic energy

Review of chemical industry trend in 2021: the chemical industry sector outperformed the CSI 300 index by 53.04pct. It ranks third among the 28 industries, and the sub industries potassium fertilizer, phosphorus fertilizer and phosphorus chemical industry rank first. The P / E ratio of the chemical industry is 19.85 times, which is continuously downward compared with the beginning of the year, 23.33 times lower than the average value of the past year, and the premium rate is 17.04% compared with the P / E ratio of A-Shares (16.74 times). With the control of the epidemic situation, the downstream demand gradually recovers, and the year-on-year growth rate of PPI in the chemical industry continues to rise.

Crude oil market outlook in 2022: Brent crude oil price may fluctuate in the range of USD 60 ~ 85 / barrel. In the first three quarters of 2021, the crude oil price showed an overall upward trend, the prospect of global crude oil demand was optimistic, and the crude oil inventory also continued to decline sharply. The market was worried that the increase of energy demand would lead to a tight supply situation in the oil market, and the crude oil price rose to a high level in the year in the third quarter. In 2022, the demand for crude oil may continue to recover, and the uncertainty still develops around the changes of the epidemic. It is expected that in the first quarter, affected by seasonal factors, the growth of crude oil demand is weak month on month, but the demand has increased steadily again since the second quarter. In terms of supply, OPEC + will gradually increase production. We still need to pay attention to the rise of Iran’s production and the growth of shale oil production in the United States. Macroscopically, the monetary and fiscal policies of major economies may be tightened next year, and economic growth will gradually slow down. Overall, we expect Brent’s annual fluctuation range to be USD 60 ~ 85 / barrel.

It is suggested to pay attention to four main lines: under the background of double carbon, the chemical industry with high energy consumption will face a new round of supply side reform, and the industry concentration will be further improved. Meanwhile, China’s home appliances, new energy vehicles and other markets are expected to maintain growth. With the recovery of overseas orders in the textile and garment industry, the downstream terminal demand of chemical industry is expected to continue to improve. With the continuous recovery of the global economy, the price of chemical products and industry profits are expected to continue to rise in 2022. We suggest focusing on the following four main lines:

1) Curb the blind development of high energy consumption and high emission projects in the petrochemical industry and promote the transformation and upgrading of industrial structure. The implementation of the policy of “double carbon” and dual control of energy consumption will optimize the production capacity scale and layout of the petrochemical industry, strengthen the adjustment, optimization and upgrading of the petrochemical industry structure, and the leading enterprises with scale advantages, technical advantages and environmental protection advantages are expected to fully benefit. Individual stocks suggest paying attention to Hengli Petrochemical Co.Ltd(600346) (600346. SH) and satellite Chemistry (002648. SZ).

2) Polyester enterprises with the advantages of the whole industrial chain under the background of double carbon may continue to benefit. With the gradual release of new production capacity such as PTA and polyester, the decline of sea freight next year and the recovery of overseas textile and clothing orders will increase the demand for polyester, which will drive a round of polyester market. In the context of double carbon, we are optimistic that polyester leading enterprises with the advantages of the whole industrial chain may continue to earn profits. Individual stocks are recommended to pay attention to Tongkun Group Co.Ltd(601233) (601233. SH).

3) It is suggested to pay attention to the organic silicon and phosphorus chemical industry with rigid demand characteristics. The compound growth rate of silicone apparent consumption from 2014 to 2020 is 44.95%. Assuming that the growth rates in 2021 and 2022 are 15% and 20% respectively, it is estimated that the silicone apparent consumption is 760000 tons and 910000 tons respectively. With the gradual promotion of China’s economic transformation, China’s Silicone apparent consumption is expected to maintain medium and high-speed growth. Phosphate rock and yellow phosphorus will strictly control the new construction and expansion of new production capacity. The tight supply situation continues. Under the goal of carbon neutralization and carbon peak, the transformation of renewable energy is imperative. There is a strong demand for lithium iron phosphate batteries in the power battery market and energy storage market of new energy vehicles. According to our calculation, from 2021 to 2025 The compound growth rate of the demand for lithium iron phosphate batteries in the energy storage market was 41.4% and 17.35% respectively. At the same time, considering the demand for power batteries in the overseas market, lithium iron phosphate batteries are still in short supply. Individual stocks are recommended to pay attention to Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) (600596. SH), Hubei Xingfa Chemicals Group Co.Ltd(600141) (600141. SH), Gotion High-Tech Co.Ltd(002074) (002074. SZ).

4) Bio based materials usher in development opportunities. Bio based materials use renewable crops as raw materials to produce bio based products through biotransformation, which is expected to achieve zero carbon or even negative carbon, play a significant role in reducing carbon emissions, and will also help China achieve the goal of carbon neutralization and carbon peak. In the long run, the conversion of new and old kinetic energy between bio based industry and petrochemical industry with high energy consumption and high emission will be the general trend, and bio based materials will usher in major development opportunities. Individual stocks are recommended to pay attention to Cathay Biotech Inc(688065) (688065. SH).

Risk tips: macroeconomic risk is less than expected, crude oil price risk fluctuates sharply, global epidemic risk continues to expand on a large scale, downstream demand risk is less than expected, and other force majeure risks

 

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