Metallurgy / Chemicals / Rubber & Plastics

In the first half of the year, the revenue and profit of the chemical industry increased significantly. With the arrival of the "Golden Nine and Silver Ten", many downstream applications also usher in strong demand, and the chemical industry is expected to maintain an upward trend. Wind data shows that as of the close of the market on September 17, the Shenwan chemical sector rose more than 55% during the year. In the conceptual sector, the phosphorus chemical index has risen by more than 188% this year, the fluorine chemical index has risen by more than 128%, and the petrochemical index has risen by nearly 60%.

At the performance level, from the performance of the first half of 2021, the overall revenue and profits of listed companies in the chemical industry have increased significantly during the reporting period. The research report of Tianfeng Securities pointed out that in the first half of the year, listed companies in the basic chemical industry achieved operating income of 1351.6 billion yuan, an increase of 41.1% year-on-year, operating profit of 191.8 billion yuan, an increase of 142.6% year-on-year, and a net profit of 1407 attributable to shareholders of the listed company. 100 million yuan, a year-on-year increase of 147.0%. As of September 18, 10 listed companies in the chemical industry have disclosed their performance forecasts for the third quarter of 2021, 8 companies have forecasted positive year-on-year growth in net profit, and 6 companies have more than doubled year-on-year growth.

The analysis of Wanlian Securities pointed out that in the first half of the year, the revenue and net profit of many secondary sectors of the chemical industry maintained a growth trend. Among them, the four major sectors of agricultural chemicals, chemical fibers, chemical raw materials, and other chemical products had the most outstanding performance in the first half of the year. The net profit of the parent company has more than doubled; the third-level sub-sectors such as carbon fiber, other chemical raw materials, lithium battery chemicals, coatings, inks and pigments also performed strongly in the second quarter of this year. Bank of China Securities Research pointed out that in the first half of 2021, fixed asset investment in the chemical industry has rebounded compared with the same period in 2020. In the first half of 2021, fixed assets were 1700.748 billion yuan, an increase of 6.14% year-on-year.

It is worth mentioning that under the background of the policy of “carbon peak and carbon neutrality”, the new energy field represented by the lithium battery and photovoltaic industry chain has ushered in a broad space for development. The front end of the industry chain is mostly based on traditional chemical products. Raw materials have been given high-quality growth due to the demand for new energy and the blessing of high-speed tracks. The value of the corresponding products and the supply and demand pattern have been reshaped, and the economy is expected to continue to reach a new level.

According to the analysis of CITIC Construction Investment, the booming development of the photovoltaic industry has promoted the application of silicon materials and photovoltaic modules, thereby driving the upstream demand for chemical products such as trichlorosilane and EVA resin (ethylene-vinyl acetate copolymer). In addition, 2021 is the year of the outbreak of the new energy vehicle industry chain, and it is expected that sales of new energy vehicles will continue to maintain a relatively high growth rate by 2025. The growth of end applications is expected to continue to drive the demand for upstream chemical products such as lithium battery electrolyte solutes, solvents, cathode materials, and lithium battery binders.

Bank of China Securities believes that the overall performance of the chemical industry in the first half of 2021 will be good, and corporate revenue and profitability will be greatly improved. In the second half of the year, domestic and foreign demand will continue to recover. In particular, the "dual carbon" strategy is expected to enter a period of intensive implementation of policies such as the implementation plan. Increased concentration will be the main tone of the future development of the chemical industry. The agency expects that subsequent chemical product price trends will diverge, and they are optimistic about the chemical fiber and pesticide industry chains that benefit from external demand, as well as new material companies that are determined to grow under the background of accelerated domestic substitution and leading companies in lithium battery materials whose performance exceeds expectations.