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Energy conservation and emission reduction bring development opportunities The chemical sector is destined to explode Shanghai Securities News (Shanghai) Zhang Xue 2008-01-25 In the chemical industry, companies that have achieved circular economy and zero emissions are still in the minority, and most companies have not changed their image of high pollution and high energy consumption. The chemical industry is a key industry for energy conservation and emission reduction. With the surrounding markets generally recovering, the A-share market has also rebounded. This year's hot sector, the chemical sector, followed the agricultural sector and became the vanguard of yesterday's rebound. In fact, chemical stocks have been popular in the market since December last year. This is not unrelated to the optimism of market main players and institutional investors. Industry prosperity is the mainstream view. The chemical industry is a basic industry in my country's macroeconomy. It is an important pillar industry of economic development like steel and energy. Judging from the 2008 chemical industry strategy reports released by various securities research institutes, institutions are generally optimistic about the future development of the industry. Essence Securities and many other securities firms have a relatively optimistic judgment on the chemical industry, giving them a "market leading" or "optimistic" rating. “Destined to explode in silence." Essence Securities predicts that the chemical industry is a valuation depression, containing explosive energy. It is also expected that the chemical industry will continue to maintain a growth trend in 2008, and some sub-sectors will gradually enter the boom stage. Essence Securities believes that the chemical industry will surpass the market index in the first half of 2008. Guotai Junan (Quoting Stock Bar) believes that in 2007, the chemical industry once again showed an upward trend after experiencing the shock and consolidation in 2006. Both the industry and related listed companies' production, sales and profits increased significantly year-on-year. In 2008, the two major factors of export and moderate domestic inflation will continue to exert a positive and important influence on the operation of the industry. Supported by the rapid growth of industry production capacity, the chemical industry as a whole is expected to continue to show rapid growth, while the various sub-sectors will still maintain an uneven situation. The judgments of research institutes such as Centaline Securities and Changjiang Securities (Quote Stock Bar) are bearish. Changjiang Securities is optimistic about the industry market and believes that the industry will continue to maintain prosperity in general, but the prosperity has declined. Changjiang Securities pointed out that international oil prices continue to rise, and fluctuations in crude oil prices affect the overall development of China's chemical industry. The growth rate of economic benefits in the petroleum and chemical industry shows signs of slowing down, and the prosperity has declined. Zhongyuan Securities Research Institute also predicts that industry profit growth will slow down in 2008 due to unfavorable factors such as rising raw material prices, fierce competition, and increased export pressure in the chemical industry. Energy conservation and emission reduction bring development opportunities Energy conservation and emission reduction is one of the important reasons why all securities companies are optimistic about the chemical industry. Because in the chemical industry, companies that have achieved circular economy and zero emissions are still in the minority, and most companies have not changed their image of high pollution and high energy consumption. The chemical industry is a key industry for energy conservation and emission reduction. * * Energy conservation and emission reduction have been given a prominent and important position as a long-term national policy, relevant policies and regulations have been introduced one after another, and energy conservation and emission reduction have been promoted through both administrative and economic means. Securities firms such as Changjiang Securities and Guotai Junan all believe that energy conservation and emission reduction are both challenges and opportunities for the chemical industry. Changjiang Securities predicts that energy conservation and emission reduction will surely lead to the opening of the consolidation of the chemical industry, and advantageous companies will obtain good development opportunities as a result. Guotai Junan predicts that energy conservation and emission reduction will cause some companies to reduce operating rates, increase environmental protection investment, and increase capital expenditures, but it can also help companies reduce energy consumption and save costs. Zhongyuan Securities believes that the energy-saving task was not completed in 2007, and efforts will be intensified in 2008. Guotai Junan explained that the so-called challenges and opportunities coexist, and energy conservation and emission reduction will also bring new investment opportunities to the chemical industry. For 2008, securities firms are generally optimistic about three investment ideas: the long-term opportunities brought by building energy conservation to polyurethane insulation materials, the cost reduction opportunities brought by advanced clean coal gasification (market forum) technology, and the opportunities brought by the closure of highly polluting backward production capacity to the leading dye industry. It is imperative to develop the coal chemical industry. There are many sub-sectors in the chemical industry. In addition to the organic products and fertilizer sub-sectors, the coal chemical sub-sector is unanimously favored by all securities firms. Coal chemical industry is a chemical process that uses coal as raw material to produce chemical products. The sharp rise in international crude oil prices since 2001 is the main reason that directly leads to the current high prosperity of the coal chemical industry. Guodu Securities Research Institute explains that in the domestic market, although the price of coal has increased in recent years, the increase is significantly lower than the increase in oil and gas prices in the international market. However, the corresponding product prices have increased significantly due to international integration factors, which has greatly increased the gross profit margin of coal chemical companies' related products and pushed some projects that were not technically and economically feasible in the past to cross the cost threshold, such as indirect coal liquefaction projects. Guodu Securities recommends investing in listed coal chemical companies that are developing rapidly by taking advantage of the "east wind" of high oil prices, mainly coal chemical listed companies with coal-to-methanol, coal-to-synthetic ammonia, "coal coking + crude benzene refining" and fine chemical products such as BDO, PVA and PTMEG. Centaline Securities also recommends paying close attention to powerful companies that own coal resources or plan to expand to upstream coal resources. ； Possess key technologies ； Provide coal chemical technology, equipment and engineering design ； Coal mining companies with polygeneration capabilities in the field of syngas, such as ST Danke (Quote Stock Bar) and Hualu Hengsheng (Quote Stock Bar), etc. Among more than a hundred stocks in many sub-sectors, Yantai Wanhua (Quoting Stock Bar) has become the "darling" of institutional investors. More than ten brokerage firms have given the stock an "overweight" or "buy" rating, and Salt Lake Potash Fertilizer (Quoting Stock Bar) has also been recommended by most brokerages. In addition, many securities firms are also optimistic about stocks such as Xin'an Shares (Quoting Stock Bar), Hualu Hengsheng, Yuntianhua (Quoting Stock Bar), Shanxi Sanwei (Quoting Stock Bar) and other stocks.