From January 15 to 23, 2022, a total of 67 listed chemical enterprises issued the performance forecast of 2021 annual report. 54 companies recorded an increase in net profit, of which 44 had a year-on-year increase of more than 50% in the lower limit of net profit change; 8 companies recorded a year-on-year decrease in net profit; Three companies recorded turning losses into profits.
Industry trends:
The performance of many chemical enterprises is expected to be good. From January 15 to 23, 2022, a total of 67 listed chemical enterprises issued the performance forecast of 2021 annual report. 54 companies recorded an increase in net profit, of which 34 had a year-on-year increase of more than 100% and 44 had a year-on-year increase of more than 50%. Baoding Lucky Innovative Materials Co.Ltd(300446) , Hubei Dinglong Co.Ltd(300054) , Lecron Industrial Development Group Co.Ltd(300343) turned losses into profits year on year; The net profit of Daoming Optics&Chemical Co.Ltd(002632) , Shanghai Pret Composites Co.Ltd(002324) , Guangzhou Jointas Chemical Co.Ltd(002909) , Shandong Dawn Polymer Co.Ltd(002838) , Jiangsu Jiangnan High Polymer Fiber Co.Ltd(600527) , Hebei Jianxin Chemical Co.Ltd(300107) , Guangdong Silver Age Sci &Tech Co.Ltd(300221) , Zhejiang Unifull Industrial Fibre Co.Ltd(002427) decreased year-on-year.
In terms of molecular industries, among the enterprises that disclosed the performance forecast, the sharp year-on-year increase in net profit was mostly concentrated in the sub industries such as soda ash, pesticide, fluorine chemical industry and refrigerant, phosphorus chemical industry and phosphate, spandex and so on. Among them, the net profit growth of soda ash and spandex enterprises exceeded 100%, and the net profit growth of pesticide enterprises exceeded 50%, mainly because the company’s product price increased significantly during the reporting period. The enterprises whose net profit is expected to decline year-on-year are mostly concentrated in the modified plastics and other chemical products industries. The decline in net profit is mostly related to the rise in the price of raw materials and the high profits brought by the outbreak of the epidemic at the beginning of last year.
With the price increase of chemical products, the net profit of polyurethane and spandex industry increased significantly in 2021. Wanhua Chemical Group Co.Ltd(600309) the expected profit in 2021 is 24-25.2 billion yuan, with a year-on-year increase of 139% ~ 151%. During the reporting period, the global economy recovered, the market demand was boosted, and the price of chemical products increased. The company’s MDI technological transformation, ethylene and other new production capacity and new units were put into operation, and the volume and price of major products such as polyurethane, petrochemical and fine chemicals rose simultaneously, with a significant increase in operating performance year-on-year. Huafon Chemical Co.Ltd(002064) the expected profit in 2021 is 7.85 ~ 8.1 billion yuan, with a year-on-year increase of 244.43% ~ 255.40%. During the reporting period, the global economy gradually recovered, the market demand was boosted, and the price and sales volume of the company’s main products increased compared with the same period of last year: among them, the price of spandex products increased significantly compared with the same period of last year, and the profit level increased significantly year-on-year; Secondly, the price and sales volume of adipic acid and polyurethane stock solution products increased significantly compared with the same period of last year, and the profit level increased year-on-year.
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%; In addition, the price of 15% products was 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 the 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 products 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) large fluctuations in oil prices caused by changes in geopolitical factors; 2) The global epidemic situation has changed.
