Market review. As of December 24, 2021, Shenwan basic chemical industry fell by 2.96% this week, 2.28 percentage points lower than Shanghai and Shenzhen 300 index, and ranked 25th among Shenwan 28 industries.
For the seven sub sectors of Shenwan basic chemical industry, from the performance of the last week, Non metallic materials (- 0.34%), rubber (- 0.77%), chemicals (- 2.58%), agrochemical products (- 3.09%), plastics (- 3.22%), chemical raw materials (- 3.56%) and chemical fiber (- 4.58%) in order of increase. From the performance since the beginning of the month, rubber has the largest increase (+ 2.05%), followed by agrochemical products (+ 0.33%), chemical raw materials (- 2.75%) and chemical products (- 3.63%), chemical fiber (- 3.93%), plastics (- 4.60%) and non-metallic materials (- 9.11%).
Among the top gainers this week, Aba Chemicals Corporation(300261) , Sichuan Lutianhua Company Limited(000912) and Guangzhou Jet Bio-Filtration Co.Ltd(688026) performed best, with increases of 80.35%, 18.68% and 17.43% respectively. Among the stocks with the highest decline this week, scenery shares, Jilin Carbon Valley and Hubei Kailong Chemical Group Co.Ltd(002783) performed the worst, with declines of – 32.43%, – 17.21% and – 16.63% respectively.
Weekly view of basic chemical industry: the increase of production capacity in subsequent industries may further put pressure on the price and price difference of chemical products. It is expected that the product outlook may weaken next year, and the middle and lower reaches of the industry are expected to benefit from the downward cost, It is suggested to pay attention to (1) the tire industry whose fundamentals are expected to improve gradually; (2) the tackling of air pollution control in autumn and winter and the Winter Olympic Games will put pressure on the pesticide supply side, and the prices of some pesticide products are expected to remain strong; (3) the modified plastic industry whose profitability is expected to improve if the upstream prices continue to decline; (4) the leading sweetener industry whose prices rise and current valuation is reasonable Anhui Jinhe Industrial Co.Ltd(002597) 。 In addition, under the dual carbon target, it is recommended to continue to pay attention to the upstream chemical materials of new energy with high demand certainty, such as PVDF, photovoltaic EVA particles, etc. Key target concerns:
Tires: Shandong Linglong Tyre Co.Ltd(601966) (601966), Qingdao Sentury Tire Co.Ltd(002984) (002984), and Sailun Group Co.Ltd(601058) (601058)
Pesticide: Jiangsu Yangnong Chemical Co.Ltd(600486) (600486)
Modified plastics: Kingfa Sci.& Tech.Co.Ltd(600143) (600143), Shanghai Pret Composites Co.Ltd(002324) (002324)
Sweetener: Anhui Jinhe Industrial Co.Ltd(002597) (002597)
PVDF： Lecron Industrial Development Group Co.Ltd(300343) （300343）
PV EVA: Jiangsu Eastern Shenghong Co.Ltd(000301) (000301), Levima Advanced Materials Corporation(003022) (003022)
Risk warning: downstream demand is less than expected; Product price and price difference fall; Intensified industry competition, etc.
