Key investment points
Performance of the sector this week: the overall market composite index fell this week (March 7-march 11). The Shanghai Composite Index closed at 330975, down – 4.00% this week, the Shenzhen cost index fell – 4.40%, the small and medium-sized board 100 index fell – 4.64%, and the basic chemical sector fell – 4.29%. Performance of individual chemical stocks this week: the chemical sector fell broadly this week, slightly higher than the big market. The stocks with the highest growth rate include Yunnan Energy Investment Co.Ltd(002053) , Zhejiang Dayang Biotech Group Co.Ltd(003017) , Elion Clean Energy Company Limited(600277) , ST Rongtai, Yunnan Yuntianhua Co.Ltd(600096) , Hebei shares, North Chemical Industries Co.Ltd(002246) , Jiangyin Haida Rubber And Plastic Co.Ltd(300320) , Suzhou Longjie Special Fiber Co.Ltd(603332) , Tangshan Sunfar Silicon Industry Co.Ltd(603938) According to the “green salt production” strategy of Yunnan Province, Pu’er is the only enterprise authorized by the state to enhance the competitiveness of salt production; The green power sector rose strongly, Yunnan Energy Investment Co.Ltd(002053) covering clean energy, and the construction of wind farm projects of subsidiaries started, helping enterprises to put on the ceiling of price limit Zhejiang Dayang Biotech Group Co.Ltd(003017) raised investment project product 4,4-difluoro benzophenone is a key intermediate of new special engineering plastic peek, which is widely used in many fields; The company’s main business includes the production and sales of veterinary APIs. The recent rise in the concept of animal health care led to the rise of the stock limit for two reasons.
Crude oil market dynamics this week: OPEC + production increased and crude oil prices fluctuated and fell. Ice oil distribution closed at US $112.67/barrel (Mom – 4.61%); WTI crude oil closed at US $109.33/barrel (Mom – 5.49%). Tracking of key chemicals: among the chemicals we focus on this week, acetic acid (+ 31.43%), dichloromethane (+ 19.83%), sulfur (+ 17.11%), acetic anhydride (+ 15.44%) and fuel oil (+ 11.51%) led the price increase. This week, downstream traders in the acetic acid market concentrated on taking goods, and the methanol period is now resonating upward, with a large increase in the cost side. Superimposed on the maintenance plans of many suppliers at the end of March, the market price of acetic acid rose sharply. On Tuesday, the enthusiasm of the downstream refrigerant in the oxymethane market was good, the inventory of the upstream supplier fell significantly, and the market price of oxymethane continued to rise. This week, the procurement demand in the downstream of the sulfur market was stable, and the price of domestic sulfur was low in the early stage, which was quite different from the spot price of the port. Sinopec refinery and other refineries raised their prices one after another to follow up and make up the rise, and the price of sulfur market increased significantly. This week, the enthusiasm of downstream inquiry in acetic anhydride market increased, the price of raw material acetic acid continued to rise, the cost side support was good, and the market price of acetic anhydride increased. This week, the downstream ship fuel in the fuel oil market prepared goods on demand, and the deep-processing enterprises just needed to buy. The supply side was affected by the epidemic, the transportation vehicles were tight, and the supply side was insufficient, which provided power for the price increase.
Main lines of Chemical Investment: (1) cyclical growth stocks are expected to improve marginally: since the turning point of Q2 chemical boom in 2020, the prices of some chemicals have risen to historic highs. As the mismatch between supply and demand moves towards balance and superimposes the downward pressure of the economy, the traditional chemical cyclical stocks have made a sharp correction. We believe that we should focus on the industry leaders with continuous production expansion capacity in the 14th five year plan, supplement the price with quantity, especially the high-quality companies that embrace change and look for the second growth curve, which are expected to cross the cycle in the medium and long term. Key recommendations: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , satellite chemistry, China National Chemical Engineering Co.Ltd(601117) , Ningxia Baofeng Energy Group Co.Ltd(600989) , lithium iron phosphate industry chain and soda ash industry chain. (2) Focus on high-end manufacturing and supporting materials for high-tech industries, including biosynthesis, electronic materials, degradability, tail gas treatment, carbon fiber, etc. Key recommendations: Haohua Chemical Science & Technology Corp.Ltd(600378) , Valiant Co.Ltd(002643) . (3) For the pesticide industry chain entering the business cycle, it is recommended to: Jiangsu Yangnong Chemical Co.Ltd(600486) , Anhui Guangxin Agrochemical Co.Ltd(603599) .
Risk warning: crude oil supply fluctuates sharply; The situation of trade war worsened; Risk of large exchange rate fluctuations
