Key investment points
Overall: last week (2022.01.17-2022.01.23), the CSI 300 rose 1.11%, the Shanghai stock index rose 0.04%, and the gem index fell 2.72%. The basic chemical industry fell by 4.32%, underperforming the CSI 300 index by 5.43 points, the Shanghai Composite Index by 4.36 points and the gem by 1.60 points. Its weekly rise and fall ranked 29th among the Shenwan level industries.
Sector: the new materials index fell 4.73% and the market performance was poor. The prices of all sub industries in the new materials sector fell to varying degrees. The top three sub industries were silicone (- 6.56%), membrane materials (- 6.10%) and semiconductor materials (- 5.29%).
Individual stocks: in the new materials sector, only 7 stocks achieved positive returns. The top gainers are: Shenzhen Jinjia Group Co.Ltd(002191) (+ 5.66%), Yunnan Energy New Material Co.Ltd(002812) (+ 4.16%), Shantou Wanshun New Material Group Co.Ltd(300057) (+ 3.92%); The stocks with the largest decline are Yongtai shares (- 24.25%), Phichem Corporation(300398) (- 18.94%), Aoyuan Beauty Valley Technology Co.Ltd(000615) (- 17.95%).
Valuation: as of January 23, 2022, the PE (TTM) of gem index is 38.77, the PE (TTM) of new materials sector is 39.51, and the premium rate relative to gem index is 1.9%.
Industry highlights
1. National development and Reform Commission: by 2025, about 60 cities will take the lead in building a basically perfect recycling system of waste materials
2. Concerning adiponitrile / PA66, NVIDIA signed a strategic cooperation agreement with China Pingmei Shenma Group
3. Kostron acquires the remaining 30% shares of JFC Co., Ltd
4. Shandong Fengyuan Chemical Co.Ltd(002805) proposed 200000 ton lithium battery high energy cathode material project
Core view
The short-term correction of the new material sector will not affect the industry fundamentals of “steady growth”. At the beginning of last week, the central bank held a press conference on financial statistics and said that this year, it will focus on maintaining the stable growth of the total amount of money and credit, the steady optimization of the credit structure, the steady decline of the comprehensive financing cost of enterprises and the basic stability of the RMB exchange rate at a reasonable and balanced level. Last week, the performance of “steady growth” related fields was stronger than that of the market, and banks, real estate and household appliances all performed better; The performance of basic chemical industry is weak. The new material sector had a large callback last week. Under the expectation of “stable growth” at this stage, the downstream demand is expected to drive the demand of the upstream material market to float. In the long run, the industry policy support is increasing, the localization substitution trend remains unchanged, and the short-term correction does not affect the expectation of “seeking progress while maintaining stability”. In conclusion, we continue to be optimistic about the new material industry.
Generally speaking, the new material industry should focus on three investment logics:
1) import substitution: pay attention to cost performance and market development ability. The current localization substitution trend remains unchanged. In the future, enterprises will obtain competitive advantages at low cost on the basis of narrowing the gap. It is suggested to continue to pay attention to the semiconductor material sector and the only high-quality enterprise Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) and Red Avenue New Materials Group Co.Ltd(603650) 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) and other targets.
2) policy promotion: Based on the industrial foundation, grasp the policy rhythm. Continue to pay attention to the evolution of policies in relevant industries, focus on the introduction of policies, especially the government resources of enterprises. It is suggested to pay attention to the degradable plastics sector still in the period of policy introduction, the industry leader Cathay Biotech Inc(688065) , and the targets such as Henan Jindan Lactic Acid Technology Co.Ltd(300829) and Cofco Biotechnology Co.Ltd(000930) that have achieved the breakthrough of lactide core technology.
3) consumption upgrading: pay equal attention to technological innovation and market development ability. Under the background of industrial logic, the new energy industry chain will still maintain a high boom, and consumption upgrading is expected to drive the demand of the upstream material market. However, at the same time, it should be noted that after the growth track of new energy vehicles and new energy has maintained the heat for a long time, the valuation has reached a high level, and faces the risk of adjustment in the short term.
Risk tips
The risk that the epidemic situation may cause significant market fluctuations; Policy risk; The risk of technology development falling short of expectations.
