Events
On January 12, 2022, Rongsheng Petro Chemical Co.Ltd(002493) announced that the oil refining, aromatics, ethylene and downstream chemicals units of Zhejiang Petrochemical refining and petrochemical integration phase II project have been fully put into commissioning and the whole process has been opened.
Comments
The full operation of Zhejiang Petrochemical phase II project has significantly improved the performance growth certainty of relevant enterprises: Zhejiang Petrochemical phase II project contains 20 million T / a oil refining capacity, 6.6 million T / a aromatics, 1.4 million T / a ethylene and supporting downstream deep processing capacity. We expect that the operation of phase II of Zhejiang Petrochemical will bring about a significantly higher than expected growth in Rongsheng Petro Chemical Co.Ltd(002493) and Tongkun Group Co.Ltd(601233) performance, which is very different from the performance decline caused by the current market worry cycle. This poor expectation mainly comes from the fact that the market pays too much attention to the prosperity of the beta level of the industry and ignores the major changes in the fundamentals of individual stocks at the alpha level.
Large scale deep processing projects are arranged in the downstream of Zhejiang Petrochemical phase II, with high demand growth and new materials expected to weaken the cycle: the downstream of Zhejiang Petrochemical phase II project is generally arranged with new materials deep processing projects, and the scale of chemical plants is larger than that of phase I, including 300000 tons of photovoltaic grade EVA, DMC, PC, ABS and other new materials widely used in photovoltaic, new energy vehicles and so on, Driven by the global “double carbon” policy, the end consumption demand of new energy related materials is high and the growth certainty is strong. The full operation of Zhejiang Petrochemical phase II project is expected to further weaken the performance periodicity of Rongsheng Petro Chemical Co.Ltd(002493) and Tongkun Group Co.Ltd(601233) . At the same time, Zhejiang Petrochemical’s new material production capacity is an integrated planning, which has significant cost and scale advantages compared with single link enterprises.
Investment advice
We maintain the “overweight” rating of the industry, and the portfolio is: Rongsheng Petro Chemical Co.Ltd(002493) , Tongkun Group Co.Ltd(601233) .
Risk tips
(1) the production and production schedule of large-scale refining and chemical units and new energy material units is less than expected, or accidents lead to long-term shutdown; (2) The development of new energy is less than expected or there is overcapacity in the new energy material industry, resulting in a sharp decline in prices; (3) Geopolitics and El Ni ñ o phenomenon greatly interfere with oil prices; (4) The one-way decline of oil price for more than one year resulted in inventory loss for more than one year. (5) Repeated outbreaks have a negative impact on global end demand
