Zhitong Financial APP learned that Soochow Securities released a research report saying that supported by the increase in downstream demand, all kinds of gas prices bottomed out and rebounded, while PMI rebounded sharply back above the rise and fall line, the economy rebounded strongly, and the industrial gas industry was booming. In addition, the wafer factory expansion is clear, driving the growing demand for upstream electronic special gas. Electronic special gas is the second largest consumption material in wafer manufacturing, accounting for 13% of the wafer manufacturing material cost. In 2020, the localization rate of electronic special gas in China is only 15%. Driven by the vigorous development of downstream industries and national policies, China's special gas enterprises are speeding up to overcome the bottleneck and break the monopoly of foreign manufacturers.
Key recommendations:002549.SZ filling special gas category-accelerating breakthrough customer certification order is expected to release, Baling 90,000 Nm3 rare gas extraction plant 2023Q2 put into production to achieve rare gas raw material self-sufficiency; recommended attention: Walter Gas (688268.SH), and far Gas (002971.SZ), Silane Technology (838402.BJ), overseas Chinese Source (301286.SZ), Jacques Technology (002409.SZ), Zhengfan Technology (688596.SH).
The main points of Soochow Securities are as follows:
Supported by the incremental demand downstream, all kinds of gas prices have bottomed out and rebounded:
As of February 28, 2023, 1) Helium: the price of high-purity helium in 40L bottles was 2237.5 yuan per bottle, up 2.45% from the same period last year, recovering from a slight decline in January (- 3.70% in January). 2) Xenon: the month-end price of 5N xenon is 225000 yuan / cubic meter, up 36.4% from the beginning of the month, and the price trend is reversed from January (January decline-35.29%). 3) Krypton: the month-end price of 5N krypton is 2750 yuan / cubic meter, up 161.90% from the beginning of the month, and a reversal from the huge decline in January (- 68.66% in January). 4) Neon gas: the month-end price of 5N neon gas is 550 yuan / cubic meter, which is the same as that at the beginning of the month, and the decline is smaller than that in January (- 15.38% in January). Market demand is expected to continue to rise, pushing up all kinds of gas prices.
PMI rebounded sharply back above the rise and fall line, the economy is picking up strongly, and the industrial gas industry is booming.
According to the data of the National Bureau of Statistics, in January 2023, the purchasing managers' index (PMI) of China's manufacturing industry was 50.1%, up 3.1% from the previous month, returning to the range of expansion. The economic level of the manufacturing industry rebounded significantly, and the recovery of production and operation activities was strong. The main downstream of air separation and industrial gases are iron and steel and petrochemical industry. With the recovery of the domestic economy, it will further boost the demand for industrial gases and support the continued upward price of industrial gases, including bulk gases and special gases.
The wafer factory's production expansion is clear, driving the growing demand for upstream electronic special gas.
According to JWInsights statistics, 25 12-inch wafer factories will be added in mainland China from 2022 to 2026. By the end of 2026, the total monthly production capacity of China's 12-inch wafer factories is expected to exceed 2.763 million, an increase of 165.1% compared with 2022, with a CAGR of 28.8% in four years. Domestic mainstream panel manufacturers have invested heavily in projects to expand production in order to seize the opportunity in the future semiconductor market. In February 2023, BOE began to build a new semiconductor display device production line of the sixth generation. Huike HKC launched the fund-raising project at the end of June 2022 to prepare funds for the company's OLED semiconductor display device project, MiniLED project and Oxide industry-research integration project. Semiconductor materials are associated with fabs. With the accelerated expansion of fabs and the continuous expansion of production capacity, local material manufacturers will directly benefit from Chinese mainland wafer production capacity expansion.
Risk Tips:The downstream demand is not as expected, the project research and development is not as expected, and the risk of market price fluctuation.