As of January 14, 2022, a total of 71 listed chemical enterprises have issued performance forecasts for 2021. 63 companies recorded an increase in net profit attributable to parent companies, of which 52 companies recorded a year-on-year increase of more than 50% in the lower limit of net profit attributable to parent companies; Five companies recorded a year-on-year decrease in net profit; Three companies turned losses into profits.
Industry trends:
The performance of many chemical enterprises is expected to be good. As of January 14, 2022, a total of 71 listed chemical enterprises have issued performance forecasts for 2021. 63 companies recorded an increase in net profit attributable to their parents, of which 40 companies recorded a year-on-year increase of more than 100% and 52 companies recorded a year-on-year increase of more than 50%. Beijing Sanju Environmental Protection & New Materials Co.Ltd(300072) , Shenzhen Dynanonic Co.Ltd(300769) , Henan Qingshuiyuan Technology Co.Ltd(300437) turned losses into profits year-on-year; The net profit of Fengguang shares, Liao Ning Oxiranchem Inc(300082) , Zhejiang Zhengguang Industrial Co.Ltd(301092) , Beijing Comens New Materials Co.Ltd(300200) , Zhejiang Double Arrow Rubber Co.Ltd(002381) decreased year-on-year.
In terms of molecular industries, among the enterprises that disclosed the performance forecast, the significant year-on-year increase in the net profit attributable to the parent is mostly concentrated in the sub industries such as soda ash, pesticide and chemical fertilizer. Among them, the growth rate of net profit attributable to parent enterprises of soda ash and chemical fertilizer enterprises exceeded 100%, and the growth rate of net profit attributable to parent enterprises of pesticide enterprises exceeded 50%, mainly because the company’s product price increased significantly during the reporting period. Most of the enterprises whose net profit attributable to the parent company is expected to decline year-on-year are concentrated in other chemical industries. The decline of net profit is related to the rise of raw material prices and the limited capacity utilization under the dual control of energy consumption.
With the gradual increase of new capacity, the net profit attributable to the parent company of many chemical enterprises with new materials increased significantly in 2021. Jiangsu Eastern Shenghong Co.Ltd(000301) the expected profit in 2021 is 4.1-5 billion yuan, with a year-on-year increase of 435.0% ~ 552.44%. During the reporting period, the production capacity of EVA photovoltaic resin produced in Sri Lanka was stable at more than 200000 tons / year, the differentiated functional chemical fiber project with an annual output of 200000 tons of ganghong fiber and the pet regenerated fiber project with an annual output of 60000 tons of China perch technology were completed and put into operation in the second half of 2020, increasing the profit contribution year-on-year. Phichem Corporation(300398) the profit in 2021 is expected to be 345-402 million yuan, with a year-on-year increase of 50-75%. During the reporting period, the new product negative photoresist began to be sold on a large scale in the second half of 2021, resulting in a rapid growth in the operating revenue of screen display materials; Secondly, due to the improvement of downstream demand for semiconductor materials, the company’s semiconductor material revenue also continued to maintain a good growth rate; In addition, due to the strong demand of downstream customers and surge in sales of some products of pharmaceutical intermediates, the operating revenue of pharmaceutical intermediates increased significantly during the reporting period, especially in the second half of 2021.
Investment suggestions:
This month’s view:
Cyclical industries: the price fluctuation of subdivided products increases. As of December 31, the prices of only 14% of the tracked products had increased month on month; 71% of product prices fell month on month, accounting for 11% with a decline of more than 20%; Another 15% of the product prices were flat. As of December 31, WTI crude oil price fell 7.8% month on month and Brent crude oil price fell 7.6% month on month. Industry data: the PPI index of the chemical industry in November was 119.1, down 0.6% from October. Since December, the overall price of raw materials has continued to decline, and the operating rate of some enterprises in Zhejiang has been limited by the epidemic. The central economic work conference was held in Beijing from December 8 to 10. The conference pointed out that raw material energy consumption is not included in the total energy consumption control, and some coal chemical enterprises usher in development opportunities. Long term optimistic about the development of leading companies in the context of carbon neutrality.
Growth companies: the price of new material products remains high. Compared with the general correction of the price of bulk chemicals, the price of new materials such as EVA / DMC / NMP / PVDF / metal silicon / metal lithium remained high in December. For example, the price of battery grade lithium carbonate has exceeded 280000 yuan / ton, and the average monthly price has increased by 19%. On the other hand, China’s semiconductor material industry is in a period of rapid development, localization and substitution are continuously promoted, and China’s new production capacity can not meet the demand. Benefiting from the rapid development of downstream new energy vehicles, photovoltaic, semiconductor and other industries, the supply of some new materials in the upstream is tight or will become the norm.
Investment suggestion: looking forward to January, most chemical prices are still facing correction pressure due to the impact of oil price and demand. From the perspective of sub industry prosperity, pesticides, infrastructure related chemicals, semiconductor materials and new energy materials are expected to maintain a high prosperity. From the perspective of valuation, after full adjustment, the valuation of private refining, industry leaders and other related chemical enterprises has returned to a low level again. In the medium and long term, with the sustainability of profits exceeding expectations, high-quality chemical assets are expected to usher in value revaluation. Recommended stocks: Wanhua Chemical Group Co.Ltd(600309) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Rongsheng Petro Chemical Co.Ltd(002493) , Zhejiang Nhu Company Ltd(002001) , Zhejiang Huangma Technology Co.Ltd(603181) , Jiangsu Yoke Technology Co.Ltd(002409) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Lianhe Chemical Technology Co.Ltd(002250) , Lier Chemical Co.Ltd(002258) , Crystal Clear Electronic Material Co.Ltd(300655) , Valiant Co.Ltd(002643) , Sobute New Materials Co.Ltd(603916) , Shandong Sinocera Functional Material Co.Ltd(300285) etc.
January gold shares: Valiant Co.Ltd(002643)
Risk tips
1) the oil price fluctuates sharply due to the change of geopolitical factors; 2) The global epidemic situation has changed.
