Review in 2021: the profit center of large cycle in the post epidemic stage is improved
From April 2020 to June 2021, the covid-19 epidemic prompted countries to implement loose fiscal and monetary policies, China’s epidemic prevention and control was effective, the global competitive advantage of the manufacturing industry was enhanced, and the export demand continued to grow faster than expected; China’s real estate sales and completed area still maintained a high growth, and the superposition of multiple factors led to the increase of upstream raw material prices. From July to October 2021, under the dual control of energy consumption and power and production restriction, the operating rate of some subdivided industries decreased, aggravating the contradiction between supply and demand. The profitability of the chemical sector generally improved significantly, and the share price rose the most in the whole year. With the upward inflationary pressure, the orderly decline expectation of stimulus policies, and the mismatch between supply and demand moving towards balance (sometimes repeated), the chemical investment strategy has shifted from price driven performance fluctuation to grasping the pulse of the times, improving core competitiveness and crossing the cycle.
Double carbon policy, from traditional cycle to green cycle
With the gradual establishment of the “1 + n” carbon neutralization and carbon peak policy system, various industries have issued implementation plans, and the growth path of chemical enterprises is clear. Demand side: the proportion of non fossil energy consumption has accelerated, driving the rapid development of new energy industry chains such as photovoltaic, wind power and hydrogen energy. Supply side: it is strictly prohibited to increase investment in high energy consuming industries, eliminate backward production capacity, further improve the leading concentration, and the strong will be strong. At the same time, the traditional real estate credit and its investment pull the center downward, green credit has gradually become the starting point of wide credit, and the anchor determining the change of chemical prosperity has also shifted from the traditional cycle to the green cycle. The supply and demand of the traditional plate are weak or become the norm, while the green plate is in the growth stage, the shortage of supply can not be alleviated temporarily, and there is a large growth space for new energy and new materials.
Embracing change, the leader opens the second growth curve
Combing the development history of overseas chemical leaders, BASF continued to consolidate the barriers to integrated competition, orderly adjusted its business portfolio, built a carbon neutral production base, and took new energy vehicle materials as an important growth pole. DSM has continuously stripped off its original resource dependent business for 15 years and transformed its high value-added nutrition and materials business with biotechnology as the core. The market value of the company continues to rise through the cycle. China’s leading chemical enterprises embrace the changes of the times and open up the second growth curve one after another.
(1) Wanhua Chemical Group Co.Ltd(600309) : the polyurethane leader has a diversified layout, including degradable plastics, lithium battery materials and semiconductor materials, covering the whole industrial chain from bio based materials to key monomers. (2) Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) : the coal chemical leader is expanded in different places, with the elastic advantages of front-line and multi heads fully displayed, and the ethylene glycol carbon ester upgrading project extends the lithium electrolyte additive materials. Racing together bridle to bridle the chemical industry: (3) satellite chemistry: light hydrocarbon route has obvious competitive advantages and diversified material layout. (4) China National Chemical Engineering Co.Ltd(601117) : transformation from engineering to construction, design, research, development, industry and new materials. Nylon new materials, aerogels and degradable plastics will be put into operation in three major projects. (5) Ningxia Baofeng Energy Group Co.Ltd(600989) : Coal olefin head, green hydrogen project to build carbon neutral scheme. (6) As the leader of refining and chemical integration, the olefin industry chain extends to photovoltaic EVA and lithium diaphragm, and the targets include Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengli Petrochemical Co.Ltd(600346) . (7) lithium iron phosphate industry chain: phosphorus chemical industry and titanium dioxide leaders have entered the iron phosphate and lithium iron phosphate industry chain by relying on their own resource advantages. The targets include: Lb Group Co.Ltd(002601) , Cnnc Hua Yuan Titanium Dioxide Co.Ltd(002145) , Guizhou Chanhen Chemical Corporation(002895) , Xinyangfeng Agricultural Technology Co.Ltd(000902) , Sichuan Development Lomon Co.Ltd(002312) .
Changpo, heavy snow, industry trend evolution in subdivided fields
The structural demand in many subdivided areas of the chemical sector maintained rapid growth, and technological breakthroughs achieved import substitution, It is suggested to focus on the following areas: (1) synthetic biology: the technological revolution of low carbon and low energy consumption, and the penetration rate of bio based products is expected to increase rapidly. The targets include: Anhui Huaheng Biotechnology Co.Ltd(688639) (2) electronic and semiconductor materials: independent and controllable domestic substitution, with prominent advantages of R & D companies. The targets include: Haohua Chemical Science & Technology Corp.Ltd(600378) , Valiant Co.Ltd(002643) , Sichuan Em Technology Co.Ltd(601208) , Ningbo Solartron Technology Co.Ltd(688299) . (3) Pesticides: Star generic drugs have expired one after another, and the growth ceiling has been opened. China’s invented pesticides are in the ascendant, and the commercialization promotion is in progress. The targets include: Jiangsu Yangnong Chemical Co.Ltd(600486) , Anhui Guangxin Agrochemical Co.Ltd(603599) , Limin Group Co.Ltd(002734) . (4) tires: overseas factories contribute profits stably, and fuel saving drives technological change. The targets include: Sailun Group Co.Ltd(601058) , Shandong Linglong Tyre Co.Ltd(601966) , Qingdao Sentury Tire Co.Ltd(002984) . (5) other directions: Jinan Shengquan Group Share Holding Co.Ltd(605589) (phenolic resin faucet), Quakesafe Technologies Co.Ltd(300767) (vibration reduction and isolation faucet), Hangzhou Juheshun New Material Co.Ltd(605166) (nylon faucet), Zhejiang Runyang New Material Technology Co.Ltd(300920) (IXPE faucet).
Risk tip: oil price fluctuates sharply, inflation, liquidity, projects under construction are put into operation and profits are less than expected, and policies are less than expected.
