Under the new economy, the chemical industry has a broad space and significant advantages

1. The chemical industry has a broad space and significant advantages, and has great potential in the new economy

1.1. Chemical industry introduction

Chemical industry is the pillar industry of modern civilization. Behind the demand for food, clothing, housing, transportation and other aspects are inseparable from a variety of chemical raw materials, chemical products, plastics, rubber, chemical fibers and other chemical industry products. The industrial chain of the chemical industry consists of raw materials - chemicals - terminal consumption. The chemical industry occupies an important position in China's industry. In all industrial industries, the main business income of the chemical industry accounts for about 9-11%, and the total profit accounts for about 8-10%, ranking first in all industrial industries. Among them, after experiencing the disturbance of the new coronavirus epidemic in 2020, with the rapid resumption of work and production in China, the income and profit of the main business in 2021 increased significantly.

1.2. The chemical industry has a broad prospect with both fluctuations and opportunities

In the long run, the chemical industry belongs to a very wide range of application fields of the industry, the continuous growth of GDP for China's chemical industry space has laid a good development environment and the basis for continuous expansion. From the demand side, China's total retail sales of social consumer goods continue to grow, China's current consumption scale is now close to the United States, the downstream consumer market has brought huge demand, laying a solid foundation for the development of the chemical industry.

With the development and progress of The Times, the development of human society from the Stone Age - Bronze Age - iron Age - iron Age - silicon age - carbon age, the chemical industry is the basis and premise to support various industrial technological innovation. In the "carbon era", the emerging high-end equipment manufacturing industry, the new generation of information technology industry and the new energy industry all contain the huge demand potential for chemical materials. Countries around the world have also taken the development of various types of new materials as an important part of international strategic competition. At present, Chinese enterprises occupy a large market share in relatively low-end industrial applications such as rare earth functional materials and glass fiber materials.

China has two main advantages in the chemical industry: the first is the talent advantage. With the economic development and transformation, the demographic dividend has gradually given way to the talent dividend. In the past 20 years, the number of graduates and the enrollment of master and doctoral students in China's ordinary colleges and universities has steadily increased, and by 2021, more than 8 million graduate students have been trained. China's total scientific and technological human resources maintain the world's first, the future is expected to continue to enjoy the talent dividend.

The second is the technological advantage, the current domestic chemical enterprises are in the "introduction, absorption" to "invention, creation" gradually changed time node. The chemical industry relies on independent research and development to break through technical barriers, constantly improve process technology, and finally play a manufacturing and cost advantage to occupy market share. China's R & D accounted for a steady increase in GDP, with the rapid growth of GDP, China's scientific research spending has been the world's second only to the United States, which provides a solid foundation for the chemical industry to stabilize and long-term guarantee.

The chemical industry is a typical cyclical industry, and the investment in the chemical industry should grasp the opportunities brought by fluctuations. When the prosperity of the chemical industry is up, the price of products is up, and the profit is increased, which often brings the increase of the profit level and the enterprise valuation. On the contrary, the downward prosperity of the chemical industry, the downward price of products, and the decline of profits often lead to the decline of profit level and enterprise valuation, and the P/E ratio and valuation level show highly cyclical characteristics. Benefiting from supply-side reform and demand, the chemical industry has entered a new upward cycle since 2016. With the fall in demand and capacity expansion, the chemical industry entered a downward cycle in the second half of 2018. With the improvement of the epidemic situation and the rapid resumption of production and work in China, although there are still large disturbances, the chemical industry prosperity index is still gradually rising on the whole. At present, the chemical industry price-earnings ratio is generally low, and the opening of a new cycle may bring potential investment opportunities.

1.3. "Dual carbon" strategy and new energy support, the chemical industry or welcome comprehensive value revaluation