The prosperity of the chemical industry has declined. It is suggested to look for deterministic growth opportunities in 2022
Since this year, benefiting from the double positive superposition of the Chinese market and overseas exports, commodity prices have continued to rise, bringing systematic improvement to the profits of chemical enterprises. According to wind information data, among 418 enterprises in the chemical industry (Shenwan) sector (excluding st, B-Shares and undisclosed new shares in the interim report), 290 enterprises achieved positive year-on-year growth in the net profit attributable to the parent in the first three quarters of this year, of which 43 enterprises achieved a year-on-year growth of more than 500%. From the perspective of long-term logic, as the overseas epidemic is effectively controlled, the overseas production capacity will gradually recover, and the commodity prices may fall from the current high to a reasonable range. The recent PPI and domestic demand data continue to decline month on month, which also supports our view to a certain extent. Therefore, at the current time point, we believe that the prosperity of the chemical industry has shown a downward trend. It is suggested to embrace the track and target of deterministic growth in 2022.
Looking for investment opportunities from the perspective of Valuation: focus on the segments of undervalued and high profit in 2022
Based on the analysis of the valuation and profit growth of each chemical sub section, we find that the chemical sub sections with low valuation mainly include viscose, spandex, nitrogen fertilizer, soda ash, chlor alkali and vinylon; Sub sections with good profit growth include carbon black, soda ash, other chemical raw materials, phosphate fertilizer, nitrogen fertilizer, etc. On the whole, the key sectors with underestimated value and good growth performance can be summarized as chemical fiber (viscose, spandex and vinylon), agrochemical (nitrogen fertilizer and phosphorus fertilizer), soda ash, chlor alkali and polyurethane. We believe that under the complex and changeable internal and external environment this year, the chemical sub field with good profitability and low valuation will also have more attractive investment opportunities in 2022.
Looking for investment opportunities from the perspective of commodity prices: focus on crude oil industry chain, coal chemical industry and soda ash in 2022
Among the 119 chemical products tracked by us, 101 prices have risen and 18 prices have fallen since the beginning of the year. Among them, international urea, glyphosate, international potassium chloride, yellow phosphorus, phosphoric acid and other products have ranked among the top five, with an increase of 290.22%, 203.77%, 178.31%, 170.97% and 170.83% respectively. The bulk products with the lowest increase mainly include butadiene international, acetone, raw rubber, DMC The prices of soft foam polyether have fallen by 48.78%, 38.01%, 20.59%, 19.70% and 18.64% respectively since this year. Based on the analysis of commodity prices, we believe that at present, commodity prices are generally at a historical high. At the current time point, it is recommended to screen from the perspective of commodity boom sustainability and bottom reversal. For boom sustainability, it is recommended to pay attention to petrochemical industry chain, coal chemical industry and soda ash, and for bottom reversal, it is recommended to pay attention to fluorine chemical industry and vitamins.
Look for investment opportunities from the perspective of industrial trend: embrace new energy and pay attention to wind power, photovoltaic and new energy vehicles
As an intermediate link to undertake upstream production and downstream consumption, on the one hand, the chemical industry will usher in the reconstruction of the upstream production end brought about by the energy reform, on the other hand, it will benefit from the demand end growth brought about by the development of downstream new energy fields (such as photovoltaic, wind power and new energy vehicles). We believe that the proposal of the “double carbon” policy will accelerate the upgrading and adjustment of China’s energy structure, the proportion of clean energy in total energy consumption is expected to increase significantly in the future, and the industrial chains related to photovoltaic, wind power and new energy vehicles will usher in major development opportunities.
Looking for investment opportunities from the perspective of material application: pay attention to the development prospect of biomass raw materials and unexplored environment-friendly materials
Under the background of the current “double carbon” policy + new energy, from the perspective of material application, degradable plastics, biomass, carbon capture and other materials are expected to usher in a period of development opportunities. We believe that the development of green and environmentally friendly degradable materials is conducive to reducing carbon emissions and the retention of nature, promoting carbon cycle and protecting the environment. It is suggested to pay attention to: investment opportunities in PVA, biodiesel, tail gas treatment materials and other sectors.
Looking for investment opportunities from the perspective of corporate profitability: embrace in 2022 α， Layout cycle growth target
We believe that the continuous epidemic in the past two years is both an opportunity and a challenge to the whole chemical industry. To a certain extent, enterprises that can deliver excellent performance in the market environment of the past two years deserve key investment and attention. Therefore, from the perspective of corporate profitability, we propose to embrace in 2022 α， Actively lay out periodic growth targets. Relevant targets include: polyurethane ( Wanhua Chemical Group Co.Ltd(600309) ), coal chemical ( Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Ningxia Baofeng Energy Group Co.Ltd(600989) ), vitamins ( Zhejiang Nhu Company Ltd(002001) ), pesticides ( Jiangsu Yangnong Chemical Co.Ltd(600486) , Lier Chemical Co.Ltd(002258) ), tires ( Shandong Linglong Tyre Co.Ltd(601966) , Sailun Group Co.Ltd(601058) , Qingdao Sentury Tire Co.Ltd(002984) ), new fine chemical materials ( Valiant Co.Ltd(002643) , Shenzhen Capchem Technology.Ltd(300037) , Chengdu Guibao Science & Technology Co.Ltd(300019) , Red Avenue New Materials Group Co.Ltd(603650) , Weihai Guangwei Composites Co.Ltd(300699) , Zhejiang Juhua Co.Ltd(600160) , Yantai Tayho Advanced Materials Co.Ltd(002254) ) Chemical fiber ( Anhui Wanwei Updated High-Tech Material Industry Co.Ltd(600063) , Tangshan Sanyou Chemical Industries Co.Ltd(600409) , Huafon Chemical Co.Ltd(002064) , Ningbo Solartron Technology Co.Ltd(688299) , Sichuan Em Technology Co.Ltd(601208) ), phosphorus chemical ( Yunnan Yuntianhua Co.Ltd(600096) , Hubei Xingfa Chemicals Group Co.Ltd(600141) ), petrochemical ( Rongsheng Petro Chemical Co.Ltd(002493) , Hengli Petrochemical Co.Ltd(600346) ).
Risk statement
Macroeconomic risk, raw material price fluctuation risk, technical route iteration risk, environmental protection policy risk and safety accident risk.
