Key investment points:
Market review. As of March 18, 2022, CITIC’s basic chemical industry fell by 1.21% this week, underperforming the CSI 300 index by 0.27 percentage points, ranking 11th among CITIC’s 30 industries; CITIC’s basic chemical industry has fallen 8.43% so far this month, 1.54 percentage points lower than the Shanghai and Shenzhen 300 index, ranking 22nd among CITIC’s 30 industries.
Specific to the three-level sub industries of CITIC basic chemical industry, from the performance of the recent week, the top five sectors are carbon fiber (+ 6.53%), lithium chemicals (+ 5.39%), rubber additives (+ 2.82%), polyester (+ 1.73%) and civil explosives (+ 1.61%); From the performance of the last week, the top five sectors of decline were synthetic resin (- 9.57%), soda ash (- 5.58%), compound fertilizer (- 5.32%), phosphate fertilizer and phosphate chemical (- 5.15%) and polyurethane (- 4.69%).
Among the stocks with the highest gains this week, North Chemical Industries Co.Ltd(002246) , Shenzhen Rongda Photosensitive & Technology Co.Ltd(300576) and Hubei Heyuan Gas Co.Ltd(002971) can perform best, with gains of 31.95%, 22.21% and 17.03% respectively. Among the stocks with the highest decline this week, Guangxi Hechi Chemical Co.Ltd(000953) , Jiangsu Yida Chemical Co.Ltd(300721) and Hubei Forbon Technology Co.Ltd(300387) performed the worst, with declines of – 21.54%, – 19.08% and – 15.96% respectively.
Rise and fall of chemical products: among the key monitored chemical products, the products with the top five price increases this week are sulfuric acid (+ 13.92%), ammonium chloride (+ 12.50%), butadiene (+ 11.11%), coke (+ 6.38%), butanone (+ 4.62%), and the products with the top five price decreases are xylene (- 10.7%), PX (- 9.71%), fuel oil (- 9.70%), propylene oxide (- 9.60%) and caprolactam (- 8.97%).
View of Basic Chemical Industry Week: the situation in Russia and Ukraine shows signs of easing, and the international oil price is corrected this week. At present, the situation in Russia and Ukraine and oil price are still important variables affecting the trend of the sector. At this stage, it is recommended to pay attention to the companies whose quarterly performance is expected to achieve rapid growth, Jiangsu Yangnong Chemical Co.Ltd(600486) ( Jiangsu Yangnong Chemical Co.Ltd(600486) ), Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ( Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ), Anhui Jinhe Industrial Co.Ltd(002597) ( Anhui Jinhe Industrial Co.Ltd(002597) ), Hoshine Silicon Industry Co.Ltd(603260) ( Hoshine Silicon Industry Co.Ltd(603260) ), Lecron Industrial Development Group Co.Ltd(300343) ( Lecron Industrial Development Group Co.Ltd(300343) ), etc. At the same time, the recent conflict between Russia and Ukraine has blocked the export of Russian chemical fertilizer. It is reported that Russia has suspended the export of chemical fertilizer. Russia is a major exporter of potassium fertilizer in the world, which will further boost the international price of potassium fertilizer. It is suggested to pay attention to Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ( Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ) and Qinghai Salt Lake Industry Co.Ltd(000792) ( Qinghai Salt Lake Industry Co.Ltd(000792) ); At present, the price difference of phosphate fertilizer outside China is large. If China’s export is liberalized after spring ploughing, the profits of Chinese phosphate fertilizer enterprises may improve. It is suggested to pay attention to Yunnan Yuntianhua Co.Ltd(600096) ( Yunnan Yuntianhua Co.Ltd(600096) ), Hubei Xingfa Chemicals Group Co.Ltd(600141) ( Hubei Xingfa Chemicals Group Co.Ltd(600141) ), Hubei Yihua Chemical Industry Co.Ltd(000422) ( Hubei Yihua Chemical Industry Co.Ltd(000422) ), etc.
Risk warning: the fluctuation risk of energy price caused by the uncertainty of Russia Ukraine conflict; Risk of narrowing the price difference of chemical products due to sharp fluctuations in oil prices; Risk of limited export of some chemical fertilizers; If macroeconomic pressure leads to the risk that the downstream demand of chemical products is lower than expected; The risk of deterioration of supply and demand pattern due to the rapid release of new production capacity of some products; The risk of intensified industry competition; Natural and man-made disasters and other force majeure events.
