Market review in 2021: all sectors of Shanghai and Shenzhen stock markets showed an upward trend in 2021, with the Shanghai index rising by 4.80%, the Shenzhen component index rising by 2.67% and the Shanghai and Shenzhen 300 index falling by 5.20%. In 2021, the rise and fall of CITIC basic chemical industry was + 48.1%, ranking the second in all industries. Compared with the Shanghai and Shenzhen 300 index, the excess return was 53.3%. Looking back on the whole year of 2021, the chemical sector rose rapidly during q2-q3. CITIC basic chemical index and Shenwan basic chemical index reached the highest point in the year on September 22, and then fluctuated steadily in Q4 after a short correction.
In 2021, most of the sub sectors of basic chemical industry showed an upward trend. The leading sub sectors were potassium fertilizer (+ 302%), soda ash (+ 171%), phosphate fertilizer and phosphorus chemical (+ 158%), other chemical raw materials (+ 84%), fluorochemical (+ 84%), rubber products (+ 76%), inorganic salts (+ 74%), lithium chemicals (+ 73%), carbon fiber (+ 64%), and chlor alkali (+ 55%).
Among the leading sub sectors, the price of potassium chloride products in the potash fertilizer industry has increased significantly due to the mismatch between supply and demand. At the same time, core targets such as Qinghai Salt Lake Industry Co.Ltd(000792) and Zangger mining have salt lake lithium extraction business. Lithium carbonate and other products continue to be in short supply, and the price has increased sharply. Relevant targets have benefited significantly under the tide of new energy.
The soda ash industry has a low operating rate and tight supply from July to October due to relevant capacity maintenance in the middle of the year, weather, power restriction and device failure. On the demand side, the demand for flat glass increased steadily, and photovoltaic glass benefited from the significant expansion of industrial policies, which led to the rapid rise of soda ash price from May to November.
The rise of phosphorus chemical industry is driven by two aspects. First, the global supply of phosphate fertilizer is tight, and the demand side has increased significantly due to the increase of Shenzhen Agricultural Products Group Co.Ltd(000061) price and the increase of farmers’ planting willingness, resulting in the obvious rise of the prices of ammonium phosphate, phosphate rock and other products. Second, Guizhou Chanhen Chemical Corporation(002895) and other representative enterprises have successively announced the large-scale expansion of production capacity of iron phosphate and lithium iron phosphate. In the medium and short term, due to the rapid expansion of production capacity in the new energy industry, the production capacity of raw materials such as iron phosphate will still be in short supply, while phosphorus chemical enterprises have the advantages of raw materials and industrial chain integration in the production of phosphorus based new energy materials, It is easier to stand out in the subsequent industry competition.
Weekly rise and fall of plates: in the past five trading days, most of the plates in Shanghai and Shenzhen stock markets showed a rise. This week, the Shanghai stock index rose by 0.60%, the Shenzhen Component Index rose by 1.00%, the Shanghai and Shenzhen 300 index rose by 0.39% and the gem index rose by 0.78%. CITIC basic chemical fell 3.7%, ranking third in all sectors. In the past five trading days, most of the sub sectors of the chemical industry showed an upward trend. The top five sub sectors were potassium fertilizer (+ 16.6%), paint, ink and pigment (+ 7.1%), food and feed additives (+ 7.0%), civil explosives (+ 6.9%) and other plastic products (+ 6.8%).
Investment suggestions: the oil and gas sector pays attention to Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) , CNOOC and Enn Natural Gas Co.Ltd(600803) , others pay attention to Zhejiang Satellite Petrochemical Co.Ltd(002648) and private large-scale refining and chemical sector; Pesticides focus on Jiangsu Yangnong Chemical Co.Ltd(600486) , Adama Ltd(000553) , Jiangsu Changqing Agrochemical Co.Ltd(002391) , Lier Chemical Co.Ltd(002258) , Shandong Cynda Chemical Co.Ltd(603086) and Limin Group Co.Ltd(002734) , coal chemical industry and urea focus on Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Yangmei Chemical Co.Ltd(600691) and Luxi Chemical Group Co.Ltd(000830) , potassium fertilizer focus on Xinjiang Guannong Fruit & Antler Co.Ltd(600251) , phosphate fertilizer and phosphorus chemical industry focus on Guizhou Chanhen Chemical Corporation(002895) , Yunnan Yuntianhua Co.Ltd(600096) , Xinyangfeng Agricultural Technology Co.Ltd(000902) , Sichuan Development Lomon Co.Ltd(002312) , Hubei Xingfa Chemicals Group Co.Ltd(600141) , Chengdu Wintrue Holding Co.Ltd(002539) , dyes focus on Zhejiang Longsheng Group Co.Ltd(600352) , Zhejiang Runtu Co.Ltd(002440) , silicone focus on Zhejiang Xinan Chemical Indusyrial Group Co.Ltd(600596) , Hoshine Silicon Industry Co.Ltd(603260) , Chlor alkali concern Xinjiang Zhongtai Chenical Co.Ltd(002092) ; Fluorine chemical industry pays attention to China Kings Resources Group Co.Ltd(603505) , Dongyue Group, Zhejiang Juhua Co.Ltd(600160) . Vitamin concerns Zhejiang Medicine Co.Ltd(600216) , Zhejiang Nhu Company Ltd(002001) , Yifan Pharmaceutical Co.Ltd(002019) , Brother Enterprises Holding Co.Ltd(002562) . Semiconductor materials focus on Jingrui shares, Red Avenue New Materials Group Co.Ltd(603650) , Guangdong Huate Gas Co.Ltd(688268) , Jiangsu Yoke Technology Co.Ltd(002409) , Haohua Chemical Science & Technology Corp.Ltd(600378) , Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) , Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) , Hubei Dinglong Co.Ltd(300054) . OLED industry chain focuses on Valiant Co.Ltd(002643) , Xi’An Manareco New Materials Co.Ltd(688550) , Jilin Oled Material Tech Co.Ltd(688378) , Puyang Huicheng Electronic Material Co.Ltd(300481) . Lithium battery materials focus on Beijing Easpring Material Technology Co.Ltd(300073) , Guangzhou Tinci Materials Technology Co.Ltd(002709) , Shenzhen Capchem Technology.Ltd(300037) , Shenzhen Senior Technology Material Co.Ltd(300568) , Do-Fluoride New Materials Co.Ltd(002407) , Shandong Shida Shenghua Chemical Group Company Limite(603026) .
Risk analysis: the risk of rapid decline and high oil price; Downstream demand is less than expected risk.
