Annual Report Forecast, Chemical Enterprises Come Out on Top

In 2021, under the background of rising international bulk raw material prices, the chemical industry as a whole will show a high prosperity. As of January 21, 2022, a total of 712 A-share listed companies have disclosed their 2021 performance forecasts. The first batch of companies with good performance forecasts are mainly in the chemical industry, pharmaceutical biology, machinery and equipment industries. According to the Shanghai and Shenzhen A-share listed companies in the first-class chemical industry of the Shenwan industry, 98 companies have disclosed their performance forecasts, and 91 have achieved results. Preliminary performance increase. Among the top 10 companies in the two cities, chemical companies accounted for 6, namely Hebang Co., Ltd., Xinlitai, Yuntianhua, Yuanxing Energy, Tianji Co., Ltd. and Huayi Group.

The lithium battery track has become a "sweet pastry"

In terms of industries, among the pre-added companies, the most prominent performance is the lithium battery industry.

In recent years, new energy vehicles have achieved unprecedented development, which has also driven the growth of lithium battery demand. The expected increase in performance comes from the lithium battery industry. The latest data from the Automotive Power Battery Industry Innovation Alliance: In 2021, the cumulative output of power batteries for the whole year was 219.7GWh, a year-on-year increase of 163.4%; the cumulative sales volume reached 186.0GWh, an increase of 182.3% over the previous year. Among them, the sales of ternary batteries were 79.6GWh, an increase of 128.9%; the sales of lithium iron phosphate batteries were 106.0GWh, an increase of 245.0%.

The pre-added lithium battery companies include Defang Nano, which produces lithium iron phosphate, Shi Dashenghua and Yanan Bikang, which produce electrolytes, and Rongbai Technology, which produces ternary cathode materials. Dofluoroduo Company estimates that the net profit attributable to shareholders of listed companies in 2021 is 1.23 billion to 1.33 billion yuan, an increase of 2429.7% to 2635.37% over the previous year; Shi Dashenghua expects to achieve a net profit of 1.17 billion to 1.25 billion yuan in 2021, an increase of 350.36% ～381.15%; Rongbai Technology expects to achieve a net profit of 890 million to 920 million yuan in 2021, an increase of 317.71% to 331.79%. Yan'an Bikang expects to turn losses into profits in 2021, and the net profit attributable to shareholders of listed companies is 950 million to 1 billion yuan, an increase of 188.72% to 193.39%; Yonghe shares are expected to increase in net profit attributable to shareholders of listed companies in 2021 146.61%～194.73%.

Crude oil rises, companies benefit

The rise and fall of crude oil prices directly affects the profitability of the chemical industry. On the whole, international crude oil prices will rise significantly in 2021, with a recovery that exceeds expectations. Data show that in 2021, U.S. WTI crude oil rose by more than 55%, the largest annual increase in 12 years, and Brent crude oil rose by 54.29% for the year. In addition, the loose fiscal and monetary policies of various countries, the strengthening of domestic manufacturing competitiveness, and the mismatch between supply and demand under the "dual control" of energy consumption have resulted in the continued high prices of some chemical products, which have led to a substantial increase in the performance of related companies.

Xinfengming expects that the net profit attributable to shareholders of listed companies in 2021 will increase by 1.547 billion to 1.747 billion yuan, an increase of 256.52% to 289.69% over the previous year. The company said that during the reporting period, the volume and price of the company's products rose, and the upstream raw material prices showed an upward trend, supporting the overall increase in the company's product prices. The downstream textile demand continued to grow steadily, and the company's products maintained a good profit; The annual profit is 68 million to 86 million yuan, an increase of 939.72% to 1214.94%. The company said that the curtain canvas industry market, where the holding subsidiary Shandong Hailong Bright Chemical Fiber Co., Ltd. is located, is in short supply, production and sales are booming, and the growth rate of sales revenue exceeds that of sales. The growth rate of cost; Guanghui Energy is expected to achieve a net profit of 5 billion yuan, an increase of 267%~278%, a new high since listing; the net profit of chlor-alkali chemical industry is expected to increase by 171.97%~204.93%, etc. When Phosphate Chemicals made a lot of money, they also "cross-border" the lithium battery industry in order to lock in future profits.

Qi Haishen, President of Beijing Teyi Sunshine New Energy, said that, driven by the strong demand of the lithium battery industry for new energy vehicles, the layout of the phosphate link is a good industrial chain extension and application direction for phosphorus chemical companies. The phosphate rock-phosphoric acid-phosphorus salt-phosphorus fertilizer "vertical industry chain integration" phosphorus chemical industry chain layout constructed by Xingfa Group has improved the comprehensive competitiveness of products, higher industrial concentration, and better overall profits. At the same time, Chuanjinnuo also took the lead in the "cross-border" lithium battery industry. In 2017, it deployed a phosphoric acid purification project in Fangchenggang, Guangxi. In the first half of this year, it planned an iron phosphate project with an annual output of 5,000 tons. At present, the construction of the two major projects has basically been completed.

Cyclical drive performance improvement

The trend of cyclical stocks is closely related to the trend of commodity prices. Chemical stocks belong to the commodity raw material industry and also change with the changes of the market economic cycle.

"In 2021, the entire industry will be in a state of overall prosperity, and the demand for almost all important industrial products will be relatively good. With the rise in commodity prices, industrial products will show a double rise in volume and price." Wang Meiting, a researcher at the Bank of China Research Institute, said.

The 2021 annual report predicts that 4 of the top 10 companies with the largest net profit growth are Sinochem, namely Yuntianhua, Yuanxing Energy, Yida, and Defang Nano. Yuanxing Energy's net profit in 2021 is expected to increase by more than 70 times, Yida's net profit in 2021 is expected to increase by more than 32 times, and the net profit of Defang Nano, Yuntianhua and Dongfang Shenghong in 2021 is expected to increase by more than 11 times. From the perspective of chemical industry segments, companies with larger profit growth are mainly concentrated in the cyclical titanium dioxide, silicone, glyphosate and other fields, such as Hesheng Silicon Industry, Xinan, Xinyaqiang, and titanium dioxide in the silicone industry China Nuclear Titanium Dioxide, Longbai Group, Huiyun Titanium Industry in the industry, and Hebang Bio, Jiangshan Co., Ltd., Xin'an Co., Ltd., etc. in the glyphosate industry.

However, there are also some chemical companies whose performance has declined compared to 2020, namely Zhengguang, Fengguang, Gaomeng, Aoke, Jitai, Dawn, and Jianxin, but these companies are also profitable in 2021. . Zhengguang Co., Ltd. said that the rise in oil prices caused the cost of main raw materials to rise in this period, but due to factors such as market competition and sluggish price transmission, the company's product prices failed to rise synchronously.

Regarding the performance of chemical stocks in the future, Shanxi Securities Research Report believes that under the background of carbon neutrality, the traditional chemical industry is ushering in a new round of supply-side reform. In the case of slowing downstream demand growth, future competition is mainly reflected in integrated construction, cost And efficiency is the main point of competition.