Core conclusion
Seek medium-term certainty in the short-term sharp fluctuations. Under the influence of geopolitics, the market follows the sharp fluctuations of oil prices, and we tend to seek medium-term certainty: 1) the view that the price center of medium and long-term resources is upward remains unchanged, and the profit is close to the upstream resources; 2) The view on the prosperity of agrochemical industry throughout the year remains unchanged, and consumption must be selected; 3) With regard to the rise of overseas energy prices, China's view of controlling coal remains unchanged and seeks electricity price arbitrage.
Trading stagflation. The market trading stagflation environment needs to constantly switch between inflation and recession. Inflation should buy upstream resources and recession should buy mandatory consumption. What can give consideration to both is chemical fertilizer, especially phosphorus fertilizer and potassium fertilizer. Phosphate fertilizer and potassium fertilizer have strong resource attributes at the mining end, while the demand end is closely related to grain prices, both offensive and defensive. It is suggested to pay attention to Yunnan Yuntianhua Co.Ltd(600096) , Hubei Yihua Chemical Industry Co.Ltd(000422) , Hubei Xingfa Chemicals Group Co.Ltd(600141) , and Qinghai Salt Lake Industry Co.Ltd(000792) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , Qingdao East Steel Tower Stock Co.Ltd(002545) .
Electricity price arbitrage: oil and gas prices have risen sharply, and overseas electricity prices have continued to rise to 2-3 yuan / kWh. In contrast, the electricity price of enterprises in eastern China is 6-8 gross / kWh, while the self generation cost of low-cost coal in Western China is only 1-2 gross / kWh. We pay attention to the arbitrage opportunity of electricity price difference of high power consumption products per unit output value. According to our screening, the chemicals with high to low power consumption per unit output value are calcium carbide, yellow phosphorus, caustic soda, industrial silicon, synthetic ammonia, etc. It is suggested to pay attention to the enterprises with self owned coal, self owned power plants and high power consumption chemicals in the west, Guanghui Energy Co.Ltd(600256) , Hoshine Silicon Industry Co.Ltd(603260) , Hubei Yihua Chemical Industry Co.Ltd(000422) , Xinjiang Zhongtai Chenical Co.Ltd(002092) , Xinjiang Tianye Co.Ltd(600075) , etc.
Repricing resources is a directional choice. Take 2020 as the starting point of the first year. Looking forward to the next 5-10 years, we need to make a directional judgment: the advantages of the resource side will be highlighted and amplified. With the combined restrictions of carbon neutralization, dual control of energy consumption and various supply side control measures of production capacity indicators, we will see that some enterprises with leading resource endowment layout, especially local state-owned enterprises, will show stronger competitive advantages in traditional industries such as coal chemical industry, salt chemical industry and phosphorus chemical industry, or industries with gradually resource attribute of industrial silicon and calcium carbide. The state-owned enterprises relying on better resource endowment are also expected to glow with stronger vitality in the gradual deepening of the reform of state-owned enterprises in recent years.
In terms of investment suggestions, we divide traditional chemical cycle companies into two categories, focusing on upstream resource-based companies and midstream processing companies. In H1 of 2022, we believe that the profits of the industry will be more inclined to the upstream, so we recommend resource advantage companies, including 1) agrochemical resource products companies represented by phosphate fertilizer and potassium fertilizer, Yunnan Yuntianhua Co.Ltd(600096) , Hubei Yihua Chemical Industry Co.Ltd(000422) , Hubei Xingfa Chemicals Group Co.Ltd(600141) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) , etc; 2) Integrated companies in high power consumption industries represented by calcium carbide, caustic soda, BDO, industrial silicon and yellow phosphorus, Xinjiang Zhongtai Chenical Co.Ltd(002092) , Xinjiang Tianye Co.Ltd(600075) , Hoshine Silicon Industry Co.Ltd(603260) , Yunnan Yuntianhua Co.Ltd(600096) , etc; 3) Companies enjoying low-cost resource arbitrage in the West and companies with their own power plants, Xinjiang Zhongtai Chenical Co.Ltd(002092) , Guanghui Energy Co.Ltd(600256) , Hoshine Silicon Industry Co.Ltd(603260) , Hubei Yihua Chemical Industry Co.Ltd(000422) , etc.
Risk warning: safety accidents affect the commencement; Rapid iteration of technical route; Changes in environmental protection policies.
