Key investment points:
Market review. As of April 29, 2022, CITIC's basic chemical industry fell by 1.71% this week, underperforming the CSI 300 index by 1.78 percentage points and ranking 15th 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 carbon fiber (+ 8.53%), lithium chemicals (+ 5.13%), electronic chemicals (+ 0.93%), potassium fertilizer (+ 0.77%) and pesticides (+ 0.39%); From the performance of the last week, the top five sectors of decline were viscose (- 12.10%), rubber additives (- 10.51%), other plastic products (- 10.37%), polyester (- 9.10%), paint, ink and pigment (- 6.51%).
Rise and fall of chemical products: among the key monitored chemical products, the products with the top five price increases this week are potassium chloride (+ 12.31%), coal tar (+ 4.45%), light soda (+ 3.67%), carbon black (+ 3.37%), urea (+ 3.07%), and the products with the top five price decreases are acetic acid (- 17.78%), aniline (- 10.24%), butanone (- 9.52%), xylene (- 4.55%) and ethylene (- 4.44%).
View of Basic Chemical Industry Week: the meeting of the Political Bureau of the CPC Central Committee showed that "minimize the impact of the epidemic on economic and social development"; At the same time, in terms of real estate, it is proposed to "support all localities to improve real estate policies from local realities, support rigid and improved housing demand, and optimize the supervision of commercial housing pre-sale funds"; In terms of infrastructure construction, it is proposed to "fully expand China's demand, give play to the key role of effective investment, strengthen the guarantee of land, energy use and environmental assessment, and comprehensively strengthen infrastructure construction". We believe that with the gradual improvement of national epidemic prevention and control situation, infrastructure and real estate are expected to promote the rapid operation of macro-economy, so as to promote the recovery of downstream demand for chemical industry. Recently, the real estate regulation policies in many places have been relaxed, and the demand for photovoltaic glass is relatively strong. 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. 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. The Russian Ukrainian war is short-term or difficult to end, the price of crude oil and international grain fluctuates at a high level, the price of international chemical fertilizer remains at a high level, and China's potash fertilizer is highly dependent on foreign countries. It is suggested to pay attention to Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ( Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) ); 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. In addition, it is suggested to pay attention to the tire enterprises Qingdao Sentury Tire Co.Ltd(002984) ( Qingdao Sentury Tire Co.Ltd(002984) ) that have increased the transmission cost pressure and are mainly in overseas replacement demand.
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.
