Key investment points:
Market review. As of April 1, 2022, CITIC’s basic chemical industry rose 0.42% this week, underperforming the CSI 300 index by 2.01 percentage points, ranking 20th 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 polyurethane (+ 8.59%), nitrogen fertilizer (+ 4.16%), carbon fiber (+ 4.05%), paint, ink and pigment (+ 2.96%) and soda ash (+ 2.89%); From the performance of the last week, the top five sectors of decline were membrane materials (- 5.61%), potassium fertilizer (- 4.44%), fluorochemical (- 3.32%), other chemical raw materials (- 2.64%) and modified plastics (- 2.14%). Among the stocks with the highest gains this week, Gpro Titanium Industry Co.Ltd(000545) , Jiangsu Flag Chemical Industry Co.Ltd(300575) and Kunming Chuan Jin Nuo Chemical Co.Ltd(300505) performed best, with gains of 36.88%, 28.25% and 23.55% respectively. Among the stocks with the highest decline this week, Star Lake Bioscience Co.Inc.Zhaoqing Guangdong(600866) , Zhejiang Zhongxin Fluoride Materials Co.Ltd(002915) and Jiangsu Shuangxing Color Plastic New Materials Co.Ltd(002585) performed the worst, with declines of – 24.20%, – 18.23% and – 17.76% respectively.
Rise and fall of chemical products: among the key monitored chemical products, the products with the top five price increases this week are liquid chlorine (+ 22.22%), nitric acid (+ 15.00%), ammonium chloride (+ 8.33%), coal tar (+ 6.20%), ethylene (+ 4.38%), and the products with the top five price decreases are dichloromethane (- 11.06%), international naphtha (- 7.90%), Chinese gasoline (- 7.25%), xylene (- 6.80%) and international diesel (- 6.75%).
View of Basic Chemical Industry Week: the situation in Russia and Ukraine has eased this week. At the same time, the United States announced the large-scale release of crude oil reserves, making the oil price significantly callback. At this stage, it is suggested to pay attention to the good performance of the newspaper industry in the first quarter, 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) ), etc. At the same time, the international grain price has remained high recently. The conflict between Russia and Ukraine has blocked the export of Russian chemical fertilizer. Russia is a large exporter of potash fertilizer in the world. The international potash price may remain high. 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. Recently, due to the force majeure of BASF American device, Wanhua Chemical Group Co.Ltd(600309) as the world’s largest MDI supplier is expected to benefit. At the same time, as the industry leader, the company has orderly expansion of production capacity and is optimistic about its long-term sustainable development. It is recommended to pay attention to it. In addition, the real estate regulation policies in many places have been relaxed recently. We can pay attention to the company Inner Mongoliayuan Xing Energy Company Limited(000683) ( Inner Mongoliayuan Xing Energy Company Limited(000683) ) in the field of soda ash, the raw material upstream of glass.
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; The policy of ensuring supply and stabilizing price of chemical fertilizer leads to the risk that the price of chemical fertilizer drops more than expected; 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; The relaxation of real estate policy is less than the expected risk; Natural and man-made disasters and other force majeure events.
