Boom degree differentiation, the rise of new energy

The synthetic biology project has been strongly supported by the government, and the scientific research achievements of the industry have been continuously promoted. Recently, the Ministry of Science and Technology issued the national key research and development plan "synthetic biology" key special 2022 annual project declaration guide notice, according to the introduction of the 2022 annual declaration guide, this "synthetic biology" key special, It will be deployed around the three tasks of "combining artificial factors into high-version chassis cells", "artificial components and gene circuits", and "functional synthetic biology system", and intends to support 8 projects, including 2 linkage projects of the ministry and city, and intends to arrange the budget estimate of 146 million yuan from the state. At the same time, the special project also intends to support 10 young scientists projects, including 4 linkage projects of ministries and cities, and plans to allocate 40 million yuan of state funding estimates, 4 million yuan for each project. That is, a total of 18 projects, the state appropriated 186 million yuan. The scope of the synthetic biology key project covers research systems (single cell, multicellular, cell-free), technical dimensions (functional elements, gene circuits, life systems) and application scenarios (manufacturing, medical, food, agriculture, etc.), with a view to realizing major scientific problems for the creation of synthetic organisms. Focusing on the major needs of material transformation, ecological environmental protection, medical level improvement, and agricultural production increase, we will break through the basic scientific problems of synthetic biology, build several practical major artificial biological systems, innovate cutting-edge synthetic biological technologies, and make major scientific and technological support for the overall goal of promoting the innovative development of the biological industry and the green growth of the economy.

In the first half of 2022, the revenue growth rate of synthetic biology industry was maintained. There are few listed companies in the synthetic biology industry in China, mainly including Kesai Biology, Huashengwu, Angel Yeast, Novozan, BGI, Oriental Shenghong, etc. In 2021, the synthetic biology sector achieved a operating income of 74.184 billion yuan, an increase of 69.93% over the same period last year, and achieved a net profit of 8.768 billion yuan. With a year-on-year growth of 69.31%, the gross profit margin was 24.51%, a decrease of 2.59 percentage points. 2022H1 achieved operating income of 43,031 billion yuan, an increase of 60.62%, achieved net profit of 3.989 billion yuan, an increase of 3.84%, and achieved gross profit margin

Demand is at a boom low, and subsequent polyurethane prices are expected to recover. Due to the deterioration of the situation in Russia and Ukraine, the price of crude oil rose significantly in the first half of 2022, and the upstream raw materials of the polyurethane sector rose significantly. In the first half of 2022, the average price of pure benzene was 8,461 yuan/ton, up 30.15% year-on-year, and the average price of 5,000 kcal coal was 1,090 yuan/ton, up 52.23% year-on-year, and crude oil was currently at a high and volatile level. The downstream polyurethane demand is in the off-season, as of the beginning of September, the price spread of pure MDI reached 11.72% historical quantile, the polymer MDI reached 8.42% historical quantile, and the TDI reached 16.72% historical quantile. TDI is affected by the supply shortage, and the price has rebounded from the bottom, and the prosperity of TDI is expected to improve. Unlike traditional commodities, MDI has obvious technical barriers and monopoly attributes. We believe that there is little room for the MDI spread to fall, and the MDI price is expected to be repaired with the marginal improvement of domestic demand.

In 2021, the overall performance of the polyurethane sector was brilliant, the overall sector achieved operating income of 157.958 billion yuan, an increase of 93.32%, and achieved a net profit of 25.362 billion yuan, an increase of 135.08%. The entire polyurethane sector achieved positive growth in operating income, but the profit differentiation was serious. The net profit of polyurethane upstream to mother represented by Wanhua Chemical and Cangzhou Dahua increased by 145.47% and 496.39%, respectively, while the performance of polyurethane downstream companies was average. In the first half of 2022, due to the double impact of rising crude oil and the epidemic on demand, the overall revenue growth of the polyurethane sector slowed down, gross margin declined year-on-year, the overall operating income of the sector was 96.116 billion yuan, an increase of 30.82%, and the net profit of the mother was 10.750 billion yuan, a decrease of 23.19%. From the point of view of specific companies, the net profit of the mother, the polyurethane plate has declined to different degrees, of which Wanhua Chemical fell 23.26% year-on-year, and Cangzhou Dahua fell 8.9% year-on-year.