The RRR cut will boost the cyclical stocks

1, industry trends and perspectives

Crude Oil: Last week, WTI and Brent’s oil prices rose sharply and they were close to 8% and 10%, respectively, of which WTI oil prices broke through 55 US dollars/barrel again. On the supply side, 1) Iran calls for OPEC production cuts; 2) US oil drilling numbers decreased by 26 to 734 last week and fell for the 19th week in a row; 3) EIA data show that the previous week's US crude oil inventories increase sharply shrank by more than 80 %. On the demand side, OPEC said crude oil demand will rise more than expected this year. As of the weekend, the spread between Brent and WTI crude oil increased from $6.23 per barrel in the previous week to $7.71 per barrel. The downstream major petrochemical products, except for international propylene, declined slightly. The rest basically received red, among which international naphtha, international pure benzene, styrene, and toluene rose a lot.

PTA: Driven by the Gulei PX explosion (causing 4.5 million tons of PTA equipment from Xianglu Petrochemical), and the application of Far East Petrochemicals for bankruptcy in mid-March caused a shutdown of 3.2 million tons of PTA plant and a large rebound in international oil prices. PTA market prices continue to rise about 300 yuan / ton. (Note: On April 6th, the Qureideng Aromatic PX Project in Zhangzhou, Fujian Province, exploded. According to the duration of the fire and the impact, the maintenance work is expected to last at least six months.)

Polyester Filament: Last week, prices continued to rise, and the mainstream market prices of polyester FDY 150D/96F and POY 150D/48F rose from 7600-7750 yuan/ton last week to current 8100-8200 yuan/ton. On the supply side, the overall inventory has decreased; on the demand side, the downstream weaving manufacturers have started one after another, and the transaction volume in the terminal fabric market has increased; the raw material end, upstream due to rising oil prices and Gu Lei PX project explosion led to price increases.

Printing and dyeing: Last week, the Chinese government website formally issued the “Notice of the State Council on Printing and Distributing Water Pollution Prevention and Control Action Plan.” The document requires that all small-scale papermaking, tanning, printing, dyeing, and pesticides that do not meet the national industrial policy be severely banned by the end of 2016. Contaminated water environment production projects. The tremendous pressure of environmental protection and pollution control is expected to bring about improvement in the supply and demand of chemical sub-sectors such as printing, dyeing and leather.

Titanium Dioxide: Sichuan Longjing began to increase the price of rutile titanium dioxide by 600 yuan/ton from April 10th. At present, the market price of its entire series of products has exceeded the 12,000 yuan/ton mark. On the 15th, the price of all types of titanium dioxide was increased by RMB 500/t (the last time it was increased by RMB 300/t on March 16th), and Jiangxi Tianguang, Ananda, and Jiangsu Titanium etc. were all raised by RMB 300/t. A total of more than 10 companies collectively increased their prices.

Viscose Staple Fiber: Viscose Staple Fiber: The mid-end mainstream market price rose from 11300-11400 yuan/ton in February to the current 11900-12200 yuan/ton (last week was 11700-11800 yuan/ton), and the high-end mainstream market The price rose from 11400-11500 yuan/ton in February to the current 12200-12300 yuan/ton (last week was 12,000 yuan/ton). Industry inventory decreased from 25 days in February to the current 15 days (17 days last week). In the industry self-enhancement, the supply and demand pattern of the viscose staple fiber industry is expected to improve.

2, stocks view

The RRR cut will release liquidity, which will lead to expectations of pushing up commodity prices, and will also promote the rise of cyclical stock prices.

From a cyclical point of view, our weekly dynamic tracking of chemical prices shows that the prices of PTA-polyester filaments and titanium dioxide have been rising recently. This also validates our continuous emphasis on the “cyclical product” pattern of supply and demand. "Improved polyester and titanium dioxide" point of view. Polyester silk highlights the leading leaders: Tongkun (601233), Hengyi Petrochemical (000703), and Hailide (002206). The highlights include a good supply and demand pattern, a rebound in oil prices, and an industry chain financial service worth the wait. In addition, the oligopoly in the MDI industry is expected to maintain a balance between supply and demand in the coming years. It is recommended to focus on the domestic leader: Wanhua Chemical (600309), whose octagonal project is expected to be fully operational mid-year, and the large-cap value of blue-chip stocks the company possesses will be “when the wind comes”. Or will be sought after. In addition, titanium dioxide continued to look good: 佰 Lien (002601), the logic lies in the industry integration, the new process of its own chlorination method is also the point of view.

In addition, from the bottom-up perspective, it is still recommended that the bargaining layout transformation, the decisiveness of the performance inflection point and other criteria. We continue to be optimistic about the transitional varieties: Mida shares (000782) and Stanley (002588). The market of glucose meter developed by Mida Co., Ltd. has transformed into a broad market. From the perspective of orders, it is also a good trend. Stanley's logic lies in the transformation of the agricultural industry business model is the future trend, the company's strategic layout ushered in the first year of reform! Performance inflection point continues to be optimistic: Yongtai Technology (002326), Huachang Chemical (002274), Amway shares (300218), Lee Chemicals (002258). Among them, Yongtai Technology Management's inflection point is basically determined and integrated into the network to realize the endogenous growth and outreach development and coordination. Huachang Chemical's new project and new technology basically ensures the inflection point of performance, and the new material field is worth looking forward to!

We also propose to focus on benefiting from the integration of the printing and dyeing industry, the trend of good airline shares (600,987); "Internet +" field of Nobison (002215), Xishao Chemical (002584), Xinyangfeng (000902), etc.; Aeolus shares (600469) (tire), Huitianxincao (300041), Eastwood Science and Technology (601208), etc.

3. The price rise and fall of major chemical products

Top 10 gains last week: butadiene (East China) (14.71%), international naphtha (12.24%), butadiene rubber (12.09%), international gasoline (12.08%), GPPS (10.79%), Brent Crude oil (9.64%), international pure benzene (9.17%), FOB styrene (9.11%), CFR styrene (8.93%), toluene (8.65%) fell by the top ten last week: butyl acrylate (-10%), Ethyl acrylate (-8.04%), isooctyl acrylate (-7.55%), domestic ** (-6.5%), 1,4-butanediol (-4.92%), phenol (-4.79%), coal tar (-4.55%), soft foam polyether (-3.17%), LDPE (-2.93%), domestic urea (-2.53%)

4. Earnings forecast and investment rating adjustment: