Special topics of this week: (1) the market scale is relatively stable, and ethylene equipment has large growth space. China’s oil refining and chemical equipment production and sales have declined, but the market scale is relatively stable. The sales volume of special refining and chemical equipment in China decreased from 2044000 tons in 2014 to 1499000 tons in 2018, with a year-on-year decrease of 10.72% in 2018. The market scale decreased from 98.785 billion yuan in 2016 to 73.62 billion yuan in 2018. It rebounded in 2019, and the sales revenue of refining and chemical equipment industry reached 79.9 billion yuan, with a year-on-year increase of 8.53%. According to Suzhou Thvow Technology Co.Ltd(002564) data, the investment in Petrochina Company Limited(601857) chemical non-standard container equipment during the “14th five year plan” period will exceed 300 billion yuan. Most of China’s downstream ethylene products rely on imports. In 2017, China imported nearly 18 million tons of ethylene in the form of downstream products, and imported about 2.16 million tons of ethylene. China’s ethylene equivalent gap exceeded 20 million tons, and the actual external dependence was close to 55%. China’s ethylene production capacity still has huge room for improvement, and the gap between supply and demand of ethylene will lay the foundation for the long-term growth of ethylene equipment. According to the planning of China’s new ethylene production capacity, it is planned to add 7.4 million tons of ethylene production capacity in 2025, the cumulative new ethylene production capacity can reach 38.32 million tons in 20222025, and the total ethylene production capacity of China will reach 73.5 million tons in 2025. According to the data of Huajing Industrial Research Institute, the market scale of China’s ethylene cracking furnace was about 3.42 billion yuan in 2020, with a year-on-year increase of 77%. In 2020, the market scale of high-temperature furnace tube replacement in ethylene industry is about 800 million yuan. According to the data of China Petroleum & Chemical Corporation(600028) magazine, it can reach 2.11 billion yuan in 2025, with a compound growth rate of about 22.7%. (2) Asia is the largest market, and the concentration in China is low. The global refining and chemical equipment is mainly distributed in Asia, Europe and North America, with market share of 53.63%, 20.05% and 20.94% respectively. The Asian market accounts for more than half of the world. As a result, the global oil refining and chemical equipment market has formed a market pattern with Europe, America, Japan and other countries. The main enterprises include ABB rumas of the United States, Sauer of the United States, Lurgi of Germany, Japan Steel Institute and so on. China’s refining and chemical equipment industry has developed rapidly, but there is still a certain gap between China and foreign countries in the overall technical level, and there is still room to improve the ability of independent innovation. The scale of enterprises in China’s oil refining and chemical equipment industry is generally small, lacking absolute large-scale leading enterprises, and the current industrial concentration is generally low. In 2019, the largest proportion of refining and chemical equipment revenue was China First Heavy Industries(601106) and Suzhou Thvow Technology Co.Ltd(002564) , accounting for 16.48% and 13.49% of the market share respectively. In addition, the scale of other businesses was relatively small, and the total market share of the top ten enterprises was about 30%. There are numerous manufacturers of Chinese refining enterprises. Companies with a certain scale and technological advantage include 601 China First Heavy Industries(601106) ningboliantong, etc.
Risk factors: accelerating the spread of the global epidemic; After overseas resumption of work and production, the demand boost was lower than expected; China’s economic growth is weak.
