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The chemical industry is still in the stage to production and inventory, maintain the industry “neutral” rating. Recommended by industry capacity contraction caused prices expected to tire, viscose and fluorine chemical industry, as well as by the downstream demand driven by the explosive growth of lithium battery materials and electronic chemicals industry.

Industry profitability improved slightly, to production capacity and inventory continues to go

2016 1-2 months, chemical raw materials and products industry revenue grew 2.5%, close to the bottom of history; the sales profit rate rose by 0.35%, earnings improved slightly; the growth rate of fixed asset investment is -2%, for the first time in twelve years of negative growth; industry initiative to inventory for 18 months, or more than half of Ku Cunzhou. Overall, the main downstream demand weak recovery in the short term, the industry is still in the bottom of operation, capacity to arduous task, will continue to inventory;

The two quarter of the investment strategy:

Grasp the “capacity expansion” and “demand rise” two main lines. Production capacity: contraction of the industry caused by tight supply and demand capacity in the two quarter contraction cycle industry, tire, viscose and fluorine chemical products prices are expected to have greater performance flexibility, focus on investment targets.

Demand: the rise of new chemical materials and high-end specialty chemicals market demand, especially in China’s market supply gap. Around the idea of investment demand, research foundation, breakthrough is possible, we are optimistic about the low-end products has achieved import substitution, and is expected to realize the industrialization of lithium battery materials industry electronic chemicals industry and benefit from the new energy vehicle market the explosive growth of high-end technology breakthrough;

Lithium materials share the new energy vehicle market growth feast, diaphragm and three yuan materials enter the golden period of development. 1-2 month growth of 81% new energy automobile production increased to 16 years, the off-season, is expected to 18 annual production exceeded 1 million, the corresponding power battery demand of 81Gwh, compared with 15 annual growth of nearly 400%. Three yuan battery with its energy density advantage has become the mainstream of the domestic and foreign new energy passenger car battery with three yuan, the corresponding cathode material and wet membrane demand in the future is expected to maintain rapid growth.

Electronic chemicals by the rise of the trend of rapid development of electronics industry

With the rapid growth of China electronics industry, supporting the localization trend of electronic chemicals is irreversible. China needs a huge market space, the domestic electronic chemicals enterprise technology crucial way to continue to move forward, gradually reduce the dependence on foreign. We favor with continuous innovation, at the forefront of the industry in China, and is expected to break through the high-end electronic chemicals market quality enterprises.