Key investment points:
Plate market this week: this week, the Shanghai Composite Index fell 1.77%, the gem index rose 1.81%, the Shanghai and Shenzhen 300 fell 0.94%, the CITIC basic chemical index fell 1.21%, and the Shenwan chemical index fell 2.83%. Rise and fall of various sub sectors of chemical industry: this week, the top five sub sectors of chemical industry were rubber additives (2.82%), polyester (1.73%), tires (0.75%), electronic chemicals (0.53%) and coatings, inks and pigments (0.02%); The top five sub industries in the chemical sector were synthetic resin (- 9.57%), soda ash (- 5.58%), compound fertilizer (- 5.32%), phosphate fertilizer and phosphate chemical (- 5.15%) and viscose (- 4.44%).
Main trends of the industry this week:
The impact of Russia’s restrictions on fertilizer exports is beginning to show, and the price of potash fertilizer in China remains high. According to TASS, Russia’s state-owned news agency, the Russian Ministry of trade has proposed a comprehensive suspension of fertilizer exports at the beginning of this month. According to USGS data, the output of potash fertilizer in Russia reached 9 million tons in 2021, ranking second in the world. Russia is China’s largest source of potash fertilizer imports. In 2021, China’s potash fertilizer imports reached 7.57 million tons, of which about 30% came from Russia. Russia’s restrictions on fertilizer exports have a great impact on China’s potash fertilizer import price. According to Zhuo Chuang data, since March 8, the daily price of 60% red potassium in Yantai and Jiangsu Lianyungang Port Co.Ltd(601008) markets in China and Russia has been strong, with the average price maintaining 4450 yuan / ton, an increase of about 104.6% over the same period last year. As of March 18, the price of potassium chloride in China was 4958 yuan / ton, an increase of 124.4% over the same period last year; The price of potassium sulfate in China was 4895 yuan / ton, an increase of 71.6% over the same period last year. It is expected that the short-term potash price will remain high, and the impact of geopolitical conflict on Russia’s potash export still needs to be tracked in the future.
Investment suggestions:
After years of competition and expansion, leading enterprises in the chemical industry have continued to consolidate the cost moat, with significant core competitiveness and relatively low current valuation. It is suggested to focus on: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Huafon Chemical Co.Ltd(002064) Shandong Head Co.Ltd(002810) relying on the technical advantages of mitga, accelerate the application of food grade cellulose ether in the field of plant protein artificial meat; The new production capacity of subsidiary Hershey plant capsule is rapidly released, and its scale advantage is continuously enhanced. It is the first brand in Asia. It is suggested to focus on: Shandong Head Co.Ltd(002810) . The global tire market is a trillion level track. The epidemic has accelerated the reshuffle of the industry, and China’s leading enterprises have accelerated their expansion to seize the global market share, which is expected to maintain rapid development. It is suggested to focus on: Shandong Linglong Tyre Co.Ltd(601966) , Sailun Group Co.Ltd(601058) Ningxia Baofeng Energy Group Co.Ltd(600989) is a leading enterprise of coal to olefins in China. It has the advantage of low cost, builds a high-profit moat, and ushers in new development opportunities under the background of carbon neutralization. It is suggested to focus on: Ningxia Baofeng Energy Group Co.Ltd(600989) Sobute New Materials Co.Ltd(603916) continue to launch new products and continuously enhance market competitiveness by relying on product and technical advantages. Sichuan Daying base has been successfully put into operation, and the construction of Guangdong Jiangmen base has been started to continuously expand production capacity, explore the market, improve the national base layout and consolidate the leading position in the industry. It is suggested to focus on: Sobute New Materials Co.Ltd(603916) . China’s soda ash market continues to improve. Inner Mongoliayuan Xing Energy Company Limited(000683) as the leader of China’s natural soda process, it will benefit from the upward prosperity of the industry. Moreover, the newly discovered natural soda ore is expected to reshape China’s soda ash supply pattern, with broad long-term growth space. It is suggested to focus on: Inner Mongoliayuan Xing Energy Company Limited(000683) . The glufosinate industry is booming, and Lier Chemical Co.Ltd(002258) ‘s scale and cost advantages are leading in the world. At the same time, it actively expands new products horizontally, and its performance is expected to continue to grow. It is suggested to focus on: Lier Chemical Co.Ltd(002258) . With the explosion of demand in the downstream new energy vehicle industry, the scarcity attribute of phosphate rock gradually appears. As a Chinese phosphorus chemical giant, Hubei Xingfa Chemicals Group Co.Ltd(600141) has significant advantages in industrial chain integration, and the rapid volume of electronic chemicals in the future will also give the company strong growth attribute. It is suggested to focus on: Hubei Xingfa Chemicals Group Co.Ltd(600141) .
Risk warning: macroeconomic downturn; Large fluctuations in oil prices; Downstream demand was lower than expected.
