Key investment points:
Market review. As of April 15, 2022, CITIC’s basic chemical industry fell by 5.20% this week, underperforming the CSI 300 index by 4.21 percentage points, ranking 25th among CITIC’s 30 industries; CITIC’s basic chemical industry fell 5.11% this month, 4.31 percentage points lower than the CSI 300 index, 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 soda ash (+ 6.15%), daily chemicals (+ 1.02%), civil explosives (+ 0.27%), food and feed additives (- 0.38%) and synthetic resin (- 2.31%); From the performance of the last week, the top five sectors of decline were titanium dioxide (- 14.40%), lithium chemicals (- 10.22%), potassium fertilizer (- 9.08%), rubber additives (- 8.47%) and polyester (- 7.57%).
Among the stocks with the highest gains this week, Shandong Haihua Co.Ltd(000822) , Ningbo Tianlong Electronics Co.Ltd(603266) and Cnsig Inner Mongolia Chemical Industry Co.Ltd(600328) performed best, with gains of 25.40%, 18.24% and 13.58% respectively. Among the stocks with the highest decline this week, Poly Union Chemical Holding Group Co.Ltd(002037) , Hubei Forbon Technology Co.Ltd(300387) and Shanghai Tianyang Hotmelt Adhesives Co.Ltd(603330) performed the worst, with declines of – 33.31%, – 23.08% and – 21.13% respectively.
Rise and fall of chemical products: among the key monitored chemical products, the products with the top five price increases this week are nitric acid (+ 10.64%), coke (+ 6.00%), yellow phosphorus (+ 5.22%), dichloromethane (+ 4.95%), caustic soda (+ 4.82%), and the products with the top five price decreases are DMF (- 11.58%), butadiene (- 10.00%), coal tar (- 9.92%), TDI (- 7.71%) and DMC (- 6.90%).
View of Basic Chemical Industry Week: international crude oil prices rebounded sharply this week, mainly affected by the local escalation of the Russian Ukrainian war. At the same time, the international grain price remains high, and the conflict between Russia and Ukraine has hindered the export of Russian chemical fertilizer. Russia is a major 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, the real estate regulation policies in many places have been relaxed. 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. In addition, the medium and long-term fundamentals of industry leading companies are stable. It is recommended to pay attention to Wanhua Chemical Group Co.Ltd(600309) ( Wanhua Chemical Group Co.Ltd(600309) ), 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.
Risk warning: the fluctuation risk of energy price and international grain 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; Under the background of stable supply and price, the export of some chemical fertilizers in China is limited; 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; Risk of deterioration of supply and demand pattern due to the rapid release of new capacity of some chemical 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.
