[industrial gas] investment suggestion: domestic substitution and acceleration, and the growth of electronic special gas is good
Core logic: a) industrial gas has a long slope and thick snow, which is expected to produce a large market value company (path: 1) natural growth of the industry, 2) increase in the proportion of outsourcing, 3) increase in the market share of leading companies, 4) increase in the proportion of high value-added retail, and 5) extension to profitable special gases); b) Optimistic about the market demand for special gases with high barriers and fast growth: there is a large market space and it is expected to produce large market value companies. China’s industrial gas industry has a market of 200 billion yuan, with a compound growth rate of 11% in the past five years, ahead of GDP and overseas markets; The proportion of downstream application fields such as lithium battery, medical treatment, electronics and food continues to increase, and the demand structure is more balanced. According to the historical data of China and foreign countries, the compound annual growth rate of industrial gas is about 1.2-1.5 times of GDP. Referring to wind, it is unanimously expected that the GDP growth rate will be 5.1% / 5.0% from 2022 to 2023, and the growth rate of China’s industrial gas industry is expected to be about 6% – 8% from 2022 to 2023.
Competition pattern: domestic substitution accelerates, and the leading share of national brands increases. Independent and controllable requirements are improved, and the localization of industrial gases, including electronic special gases, is accelerated. In the third-party gas supply market, the ranking of incremental share is different from that of stock operation share. Yingde gas, Xi’An Shaangu Power Co.Ltd(601369) and other medium and long-term shares are expected to increase. Business model: moat can deepen the industry, and the stronger the stronger in the future. Develop high value-added business based on air separation equipment and on-site gas production business. 1) On site gas making business: long-term contract, monthly settlement of expenses, take or pay. (III) stable cash flow and profit; 2) The proportion of outsourced gas supply and retail gas supply has been increasing; 3) Retail gas business: by-products, transportation radius – finally form a regional monopoly.
Special gases: fast demand growth, high barriers and high profitability. China’s special gas market is expected to exceed 40 billion yuan in 2022, with a compound growth rate of 19% in the past four years. It is expected to maintain a growth rate of more than 15% from 2022 to 2025. In 2022, the scale of electronic special gas market is about 20 billion yuan.
Electronic specialty gas: the second largest semiconductor material, which is widely used in various process links of integrated circuits; Rare gases are globally competitive. Rare gas is a golden track for gas investment. The demand is concentrated in emerging fields such as semiconductor and aerospace. It is difficult to expand production, and the product price will remain high in the medium and long term.
Investment suggestion: the stronger the stronger, the better the leader and the electronic gas. Key recommendations: electronic special gas Nova Hunan Kaimeite Gases Co.Ltd(002549) , pioneer of special gas Guangdong Huate Gas Co.Ltd(688268) , promising gas power technology, Xi’An Shaangu Power Co.Ltd(601369) , Haohua Chemical Science & Technology Corp.Ltd(600378) , Jiangsu Yoke Technology Co.Ltd(002409) , Suzhou Jinhong Gas Co.Ltd(688106) , etc.
Risk tips: industry competition risk and market risk; Product price fluctuation risk
