Chemical industry value analysis

Chapter I industry overview

As an important basic industry of the national economy, the chemical industry contains tens of thousands of product types, each with different physical and chemical characteristics. The consumption of chemical products is closely related to the state of the national economy, mainly distributed in infrastructure, real estate, agriculture, automobiles, clothing and other fields of the national economy. As the space for economic growth driven by investment in fixed assets is gradually limited, the development of the domestic economy has entered a new stage, and the growth of demand for chemical products, mainly industrial products, has also been correspondingly affected. However, the demand for chemicals related to emerging industries and consumption upgrading will maintain rapid growth. Chemical products are widely used in various areas of the national economy, and the classification according to downstream application areas helps to better view the chemical industry from the perspective of demand. According to the application field, there can be dozens of typical chemical sub-industries, such as agricultural chemicals, electronic chemicals, new energy chemicals, textile chemicals, etc., the production process and raw material sources vary widely, but the change in downstream demand drives the boom of the corresponding upstream chemicals, and may even lead to significant changes in the demand and price of the products in the entire application field.

As of the end of December 2019, there were 26,271 enterprises above designated size in the petroleum and chemical industries, with an operating income of 12.27 trillion yuan and a total profit of 668.37 billion yuan, accounting for 11.6% and 10.8% of the operating income of large-scale industries in the country respectively. In 2019, the total import and export volume of the petroleum and chemical industry was 722.21 billion US dollars. Total assets totaled 13.40 trillion yuan, with an asset-liability ratio of 55.92%. The loss of loss-making enterprises was 132.08 billion yuan, up 9.7% year on year. The industry lost 17.6%. In 2019, the industry-wide operating income profit margin was 5.45%, and the cost per 100 yuan of operating income was 82.67 yuan.

Due to the resource characteristics of rich coal, poor oil and little gas in China, compared with the ethylene method commonly used abroad, calcium carbide method has more cost advantages. As the two main products, caustic soda and PVC are symbiotic, but the downstream of the two are different, and the gross profit margin is different. There are often cases of chlorine (loss) with alkali (profit), but due to the influence of domestic overcapacity, the operation mode of chlorine with alkali is also constantly challenged.

Compared with the production scale of mass chemicals with a total of tens of millions of tons, the production scale of fine chemicals is generally small, and has its own application fields. This makes it more difficult for enterprises to use the short-term business cycle to achieve rapid expansion of profits, and the research and development costs of a single variety may also be higher. But on the other hand, the difficulty of research and development of fine chemicals can help enterprises build competitive barriers and maintain relatively stable prices and gross margins. At the same time, fine chemical enterprises with advantages in specific product fields can also achieve product line expansion with low research and development costs through different products of similar processes, and achieve long-term sustained and stable growth. From the perspective of Fortune 500 companies in the chemical industry, most of them realize a broad product line and have their advantages in some areas.

The full name of chemical fiber chemical fiber refers to natural or artificial synthetic polymer compounds as raw materials, through the preparation of spinning stock, spinning and post-processing and other processes produced with textile properties of fiber, is widely used in people's clothing, food, housing and transportation aspects. In terms of raw materials, chemical fibers can be divided into man-made fibers and synthetic fibers. Artificial fiber is made of wood, bamboo, pulp, waste cotton yarn and other natural cellulose materials as raw materials, after polycondensation or polycondensation reaction to synthesize organic polymer compounds, products include viscose staple fiber, viscose filament and acetic acid filament; Synthetic fiber with oil, natural gas and coal as raw materials, through complex chemical reaction synthesis of polymer, commonly used products include polyester, nylon, acrylic, spandex and so on. Generally speaking, the study of chemical fiber industry chain is based on the polyester industry chain, and the future investment opportunities are judged by analyzing the upstream and downstream supply and demand relationship.

Upstream: The main participants in the upstream of China's chemical fiber industry chain are chemical fiber production raw materials and equipment providers, and the development of both is as follows:

1) Raw material supplier Upstream raw materials of chemical fiber mainly include PTA (refined terephthalic acid), MEG (ethylene glycol) required for the production of polyester and caprolactam required for the production of nylon.

2) The upstream equipment of chemical fiber mainly includes key process equipment such as polymerization, spinning, drawing, winding and post-processing, as well as equipment group accessories such as nozzles, spinnerets and winding. At present, China's chemical fiber equipment market shows the coexistence of local and international brands.

Middle reaches: The bargaining position of chemical fiber producers in the middle reaches is differentiated according to different product varieties, and producers of varieties with larger production scale (represented by polyester) and differentiated varieties have stronger bargaining power.

Downstream: The direct downstream of chemical fiber products for textile manufacturers, this link is in a weak bargaining position as a whole, mainly including warp knitting, knitting, wool spinning, industrial silk and other weaving industries.

Chemical fertilizer and pesticide

Upstream: China has scarce potash mineral resources, potash raw materials and products have been imported for a long time, and potash production enterprises are concentrated in Qinghai, Xinjiang, Sichuan and other potassium-rich areas.

Middle reaches: In the urea production process, the gas fluidized bed coal head process can choose anthracite, bituminous coal and lignite as raw materials, and the production cost is low and the environmental pressure is moderate.

Downstream fertilizer sales are highly dependent on offline channels, and the contribution rate of agricultural distribution stores to the sales of fertilizer products is as high as 90%, and the proportion of online channel sales is not more than 5%