Industry core view:
Last week, the basic chemical industry index fell 3.83%, the Shanghai and Shenzhen 300 index rose 1.11% in the same period, and the basic chemical industry index lost 4.94 percentage points in the same period. The petroleum and petrochemical index fell 3.22%, underperforming the market by 4.33 percentage points in the same period. Among them, Shandongsino-Agriunitedbiotechnologyco.Ltd(003042) (31.80%), Shanxi Huhua Group Co.Ltd(003002) (28.07%), Shenzhen King Explorer Science And Technology Corporation(002917) (23.67%), Hubei Forbon Technology Co.Ltd(300387) (15.15%), Shanghai Jahwa United Co.Ltd(600315) (13.42%) ranked among the top five; The companies with the top five declines were: Zhejiang Yongtai Technology Co .Ltd(002326) (- 24.25%), Xilong Scientific Co.Ltd(002584) (- 23.21%), * ST Mingke (- 22.48%), Phichem Corporation(300398) (- 18.94%) and Yanan Bicon Pharmaceutical Listed Company(002411) (- 17.47%).
Key investment points:
BDO: last week Xinjiang Zhongtai Chenical Co.Ltd(002092) issued a suspension notice on planning major asset restructuring. The company has been suspended since the opening of the market on January 17. It plans to issue shares and convertible corporate bonds to buy some or all of the shares of MEC chemical held by shareholders such as Zhongtai group (no less than 29.9%), and issue shares to qualified specific investors to raise matching funds. MEC chemical has a BDO (1,4-butanediol) capacity of 260000 tons / year, and another 100000 tons / year BDO capacity is expected to be put into operation in 2022. It is the largest BDO professional supplier in China and the third largest in the world. Xinjiang Zhongtai Chenical Co.Ltd(002092) there is a planned production capacity of 120000 tons / year of PBAT, and BDO is one of the main raw materials for the production of PBAT. The completion of this restructuring will not only positively boost the company’s performance, but also extend the industrial chain planning of the company’s products, highlighting the advantages of upstream and downstream integration and cost scale.
Adiponitrile: Recently, China National Chemical Engineering Co.Ltd(601117) publicly said that Tianchen Qixiang Zibo phase I 200000 t / a adiponitrile project has entered the staggered period of intermediate delivery and trial production. After process optimization, the maximum design capacity can reach 300000 t / A. Adiponitrile is the main raw material of nylon 66. Due to high technical barriers, China’s adiponitrile has been subject to overseas for a long time, and almost all products need to be imported. In recent years, Tianchen Qixiang, Shenma Industry Co.Ltd(600810) , Huafon Chemical Co.Ltd(002064) and other enterprises have begun to independently produce adiponitrile. Tianchen Qixiang is an enterprise invested in the construction of new nylon material project jointly established by Tianchen company, a subsidiary of China National Chemical Engineering Co.Ltd(601117) and strategic investor Zibo Qixiang Tengda Chemical Co.Ltd(002408) . The first phase of the project includes 200000 t / a adiponitrile plant, which was started in May 2020, It will start preparing for production in the near future. As the adiponitrile units under construction are put into production one after another, China will gradually get rid of its dependence on adiponitrile imports, thereby reducing the production and application costs of nylon 66.
Investment suggestion: in 2022, we will mainly recommend three main investment lines: 1 Under the background of policy control, production and supply are becoming more stringent, while the demand side is still supportive in various sub sectors, such as pesticides, fertilizers and refrigerants; 2. Resource based chemical industry segments that rely on new energy and seek industrial transformation and upgrading from upstream materials, lengthen their business cycle and improve valuation, such as phosphorus chemical industry; 3. High value-added new materials with significant domestic substitution trend, such as semiconductor materials and display materials, which are key planning during the 14th Five Year Plan period.
Risk factors: the risk of continuous fluctuation of international crude oil price, the risk of repeated impact of epidemic situation in some parts of China on enterprise operation, and the risk of sharp fluctuation of chemical product price.
