Key investment points
Overall: last week (2022.01.10-2022.01.16), CSI 300 fell 1.98%, Shanghai stock index fell 1.63% and gem rose 0.73%. The basic chemical industry fell 0.05%, outperforming the CSI 300 index by 1.93 points, the Shanghai Composite Index by 1.58 points, and the gem index by 0.78 points, ranking seventh in the Shenwan level industry..
Sector: the new materials index rose 0.57%, its market performance was stronger than that of Shanghai and Shenzhen 300, and weaker than the gem index. The sub industries in the new materials index sector had large differences in growth and decline. The top three sub industries were lithium battery (+ 6.48%), lithium electrochemical chemicals (+ 5.97%) and silicone (+ 4.86%), and carbon fiber ranked first (- 12.35%).
Stocks: in the new materials sector, 59 stocks achieved positive returns. The top gainers are: Phichem Corporation(300398) (+ 29.25%), Shenzhen Dynanonic Co.Ltd(300769) (+ 20.98%), Jiangxi Chen Guang New Materials Co.Ltd(605399) (+ 17.72%),; The stocks with the largest decline are: Kbc Corporation Ltd(688598) (- 12.35%), Red Avenue New Materials Group Co.Ltd(603650) (- 8.80%), Zhejiang Mtcn Technology Co.Ltd(003026) (- 7.73%).
Valuation: as of January 16, 2022, the PE (TTM) of the gem index was 51.91 times, and the PE (TTM) of the new materials sector was 41.04 times, with a premium rate of – 39.25% relative to the gem index.
Industry highlights
1. Release of blue book series on China’s industrial and information development from 2020 to 2021
2. The industry coordinated BDO to transfer profits to PBAT, and the industry reminded to pay close attention to cost control
3. The core technology of lactide, the upstream material of degradable material PLA, has been overcome
4. Italy will implement sup decree to completely prohibit the use of non degradable plastic products
Core view
Overall, we believe that new materials are the future growth track of the chemical industry, and we should focus on exploring high-quality growth stocks under the trend of domestic substitution. From the perspective of subdivided industries, degradable materials are still in the period of policy introduction, and the price limits the wide promotion of degradable materials. The policy is the core driving force to promote the development of degradable plastics. The frequency and intensity of policy promulgation are increasing. It is recommended to continue to pay attention to the evolution of relevant policies in the industry in the short term, and to make technological breakthroughs in the long term Growth target with cost advantage; The wave of localization of semiconductor materials has arrived, and localization will be further accelerated,; The downstream demand for lithium battery materials and lithium battery chemical materials continues to grow, and the new energy industry is in a period of rapid development. It is expected to maintain a good trend in the next few years. In conclusion, we continue to be optimistic about the new material industry. Based on the above logic, we suggest paying attention to the following three main lines:
1. Degradable Plastics: in the short term, the development of degradable materials industry depends on the policy implementation, and more importantly, on the cost control ability. It is suggested to focus on Henan Jindan Lactic Acid Technology Co.Ltd(300829) and Cofco Biotechnology Co.Ltd(000930) with lactide core technology and Hengli Petrochemical Co.Ltd(600346) with PBAT integrated construction.
2. Semiconductor sector: it is the general trend to realize localization and substitution of semiconductor materials. Chinese new material enterprises make key breakthroughs in combination with their respective advantages. It is suggested to pay attention to Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) and Red Avenue New Materials Group Co.Ltd(603650) which are the only high-quality enterprises with ARF photoresist production capacity in China; Leading enterprises in the field of electronic gas Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) , Jiangsu Yoke Technology Co.Ltd(002409) , Guangdong Huate Gas Co.Ltd(688268) ; Wet chemical faucet Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) .
3. Lithium battery sector: the wave of new energy vehicles has arrived, and the penetration rate of new energy vehicles has been increasing, driving the demand growth of upstream raw materials such as phosphoric acid and lithium iron phosphate. It is suggested to pay attention to phosphorus chemical related enterprises such as Hubei Xingfa Chemicals Group Co.Ltd(600141) , Chengdu Wintrue Holding Co.Ltd(002539) , Yunnan Yuntianhua Co.Ltd(600096) .
Risk tips
The risk that the epidemic situation may cause significant market fluctuations; The economy fell sharply; Policy risk; The risk that the technological breakthrough is less than expected.
