Since the beginning of the year, the oil price has risen sharply, affecting the overall profit space of the industry. Since 2022, stimulated by factors such as the actual output increase of OPEC + is lower than expected, the tension between Russia and Ukraine and the fear of supply interruption caused by the escalation of sanctions against Russia by European and American countries, the international oil price has risen sharply, not only exceeding US $100 / barrel, but also repeatedly hitting a new high since 2008. The rising cost of raw materials caused by high oil prices will suppress the profit space of the industry. On the one hand, it is necessary to continue to pay attention to the impact of geopolitical factors on the supply side, such as the situation between Russia and Ukraine and the negotiation of the Iranian nuclear agreement; On the other hand, high oil prices will give birth to the impetus to increase production. OPEC has the possibility to increase crude oil production. It is expected that the output of shale oil in the United States will also increase gradually. We expect that the oil price will show a trend of “high before low” in 2022. It is suggested to flexibly adjust the allocation strategy.
The profit performance of main products is differentiated, and the non oil route has better performance. High oil prices stimulate the sharp rise of chemical product prices. Among the 182 product prices we focused on tracking, 135 product prices have increased since the beginning of the year, with an increase rate of more than 70%; From the average price of 22q1, the year-on-year increase ratio was more than 78%. The products with more increase are mainly due to the rising cost of raw materials caused by the sharp rise of crude oil price. Among the 140 product price differentials we focused on tracking, since the beginning of the year, 60 product price differentials have expanded and 80 product price differentials have narrowed, with a decline rate of nearly 60%; Judging from the average price of 22q1, the decline ratio is more than 50%. On the whole, the non oil route has a good profit performance under high oil prices.
With the continuous improvement of the “double carbon” policy, the profit center of high energy consuming industries is expected to move upward. Under the background of the “double carbon” goal, China continues to improve policies and regulations, promote the transformation from “double control” of energy consumption to “double control” of total carbon emission and intensity, and continue to resolutely curb the blind development of “two high” projects and promote the green transformation of energy conservation and carbon reduction. On the one hand, the new production capacity of urea, ammonium phosphate, calcium carbide, caustic soda and yellow phosphorus shall be strictly controlled, and the new projects shall be replaced with the same or reduced production capacity; On the other hand, higher requirements are put forward for the energy efficiency level of oil refining, ethylene, p-xylene, modern coal chemical industry, synthetic ammonia, calcium carbide, caustic soda, soda ash, ammonium phosphate and yellow phosphorus. The units whose energy efficiency level is below the benchmark value and cannot reach above the benchmark value through energy-saving transformation will be eliminated and withdrawn at an accelerated pace. We believe that the supply side of “two highs” products is limited and difficult to increase, while the demand side continues to improve, and the profit center moves upward in the medium and long term.
Large scale expansion enables growth. It is optimistic about the performance of growing enterprises. Ethane to olefin has a cost moat. It is encouraged by policies due to low emission. Non oil route leading enterprises are enabled to grow through large-scale layout. The demand for textile and clothing at home and abroad continued to improve, and China’s chemical fiber industry chain fully benefited. We judge that spandex has basically reached the bottom, and there is little room for the boom to continue to decline; The supply and demand of viscose staple fiber improved and the profit center moved upward; Due to the high oil price, the popularity of polyester filament has decreased, but it is expected to be repaired under the background of good demand. Aramid fiber has high technical barriers, the market was once monopolized by foreign countries, and Chinese enterprises have achieved technical breakthrough. The demand for aramid fiber in the fields of industrial tooling, bulletproof protection, 5g construction and new energy will continue to grow. The import substitution and export volume of para aramid fiber will also increase, and the market space will be broad in the future. We are optimistic about the growth performance of relevant leading enterprises, which are mostly underestimated at present.
Key recommended targets include Xinjiang Zhongtai Chenical Co.Ltd(002092) ( Xinjiang Zhongtai Chenical Co.Ltd(002092) . SZ), satellite Chemistry ( Zhejiang Satellite Petrochemical Co.Ltd(002648) . SZ), Ningxia Baofeng Energy Group Co.Ltd(600989) ( Ningxia Baofeng Energy Group Co.Ltd(600989) . SH), Huafon Chemical Co.Ltd(002064) ( Huafon Chemical Co.Ltd(002064) . SZ), Xinfengming Group Co.Ltd(603225) ( Xinfengming Group Co.Ltd(603225) . SH), Yantai Tayho Advanced Materials Co.Ltd(002254) ( Yantai Tayho Advanced Materials Co.Ltd(002254) . SZ).
The risk indicates the risk of sharp rise in the price of raw materials, the risk that the downstream demand is less than expected, the risk of decline in the prosperity of main products, and the risk that the project is less than expected.
