Key investment points:
Market review. As of March 4, 2022, CITIC’s basic chemical industry fell by 3.21% this week, underperforming the CSI 300 index by 1.53 percentage points, ranking 27th among CITIC’s 30 industries; CITIC’s basic chemical industry has fallen 4.11% so far this month, 2.25 percentage points lower than the Shanghai and Shenzhen 300 index, ranking 28th among CITIC’s 30 industries.
Specific to the three-level sub industries of CITIC basic chemical industry, from the performance of the recent week, the top five sectors are viscose (+ 5.17%), inorganic salt (+ 3.62%), soda (+ 3.48%), nitrogen fertilizer (+ 2.16%) and chlor alkali (+ 1.41%); From the performance of the last week, the top five sectors of decline were carbon fiber (- 11.44%), lithium chemicals (- 10.02%), tires (- 6.37%), other chemicals III (- 5.22%) and membrane materials (- 4.67%).
Among the stocks with the highest gains this week, Guangxi Hechi Chemical Co.Ltd(000953) , North Chemical Industries Co.Ltd(002246) and Anhui Annada Titanium Industry Co.Ltd(002136) performed best, with gains of 44.79%, 20.65% and 16.80% respectively. Among the stocks with the highest decline this week, Jiangsu Shuangxing Color Plastic New Materials Co.Ltd(002585) , Shenzhen Dynanonic Co.Ltd(300769) and Shanghai Kinlita Chemical Co.Ltd(300225) performed the worst, with declines of – 14.95%, – 14.50% and – 14.34% respectively.
Rise and fall of chemical products: among the key monitored chemical products, the products with the top five price increases this week are fuel oil (+ 16.46%), xylene (+ 16.09%), PS (+ 15.23%), pure benzene (+ 14.55%), toluene (+ 14.35%), and the products with the top five price decreases are DMC (- 11.76%), acetic acid (- 10.26%), dichloromethane (- 7.27%), aniline (- 7.25%) Bisphenol A (- 4.01%).
View of Basic Chemical Industry Week: on March 5, Premier Li Keqiang made a government work report, pointing out that the energy consumption intensity target should be comprehensively assessed within the 14th Five Year Plan period, with appropriate flexibility; Orderly promote carbon peak and carbon neutralization, and resolutely curb the blind development of high energy consumption, high emission and low-level projects; We will strengthen pollution control, ecological protection and restoration, and properly handle the relationship between development and emission reduction. This year’s government work report proposes to realize the transformation from “dual control” of energy consumption to “dual control” of total carbon emission and intensity, resolutely curb the blind development of “two high” projects, benefit the leading enterprises Wanhua Chemical Group Co.Ltd(600309) ( Wanhua Chemical Group Co.Ltd(600309) ), Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ( Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ), which have the advantages of environmental protection technology and cost efficiency. In addition, the government work report proposes to strengthen pollution control and ecological protection and restoration to benefit the development of degradable plastics industry. We can pay attention to Red Avenue New Materials Group Co.Ltd(603650) ( Red Avenue New Materials Group Co.Ltd(603650) ) and Henan Jindan Lactic Acid Technology Co.Ltd(300829) ( Henan Jindan Lactic Acid Technology Co.Ltd(300829) ).
Risk warning: the fluctuation risk of energy price caused by the uncertainty of Russia Ukraine conflict; Risk of narrowing the price difference of chemical products due to sharp fluctuations in oil prices; If macroeconomic pressure leads to the risk that the downstream demand of chemical products is lower than expected; The risk of deterioration of supply and demand pattern due to the rapid release of new production capacity of some products; The risk of intensified industry competition; Natural and man-made disasters and other force majeure events.
