全球化工业：化工商品步入上升通道.docx
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1、16 August 2019/卜 HSBCGlobal ResearchGlobal ChemicalsEquitiesChemicalsGlobalSriharsha Pappu*Global Head of Chemicals ResearchHSBC Bank plcsriharsha.pappuhsbc +44 20 7991 9243Prateek Bhatnagar*, CFAAnalystHSBC Securities and Capital Markets (India) PrivateLimitedprateekbhatnagarhsbc.co.in+91 80 4555 2
2、757Martin Evans*Head of European Chemicals ResearchHSBC Bank plcmartini .j.evanshsbc +44 20 7991 2814Thomas C. Hilboldt*, CFAHead of Resources & Energy Research, Asia PacificThe Hongkong and Shanghai Banking Corporation Limited thomaschilboldthsbc .hk +852 2822 2922Dennis Yoo*, CFAAnalyst, Asia-Paci
3、fic Oil & Gas, and ChemicalsThe Hongkong and Shanghai Banking Corporation Limited dennishcyoohsbc .hk +852 2996 6917Nikita Makhija*AssociateBangalore* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulationsIssuer of report: HSBC Bank
4、 plcView HSBC Global Research at: s :/ research, hsbc. comCommodity chemicals - upside skewIn hindsight, we werent bearish enough on commodity chemicals; when demand is weak everything is oversupplied That said, the valuation difference between commodity and defensive names in chemicals is at an ext
5、remeIfs not clear what might cause the turn but there remains meaningful upside skew to commodity chemical returnsNot bearish enough: With the benefit of hindsight, we have clearly not been bearish enough on commodity chemicals over the last couple of years. Our primary error, we think, has been to
6、try to identify the best positioned chains, either from a supply perspective (chloralkali) or those with raw material tailwinds (PET) or those close to an inflection point (TiO2), instead of recognizing that in a weak demand environment everything is oversupplied - and every single major commodity c
7、hemical chain has generated negative returns since the start of 2018.The difference between commodity chemicals and defensives is at an extreme, both in terms of performance and valuation. Industrial gases and specialities stocks with reasonably certain high single-digit earnings growth are trading
8、at 13-14x EBITDA for FY2019e, while there is an unwillingness in the market to play guess the trough* on commodity stocks such as in TiO2 (trading at 5-6x trough EBITDA), which can fall further still, especially if macro issues continue to worsen.We expect this to turn, even if ifs not clear what mi
9、ght catalyse the turn. Demand remains weak and investors are concerned about recessionary risks. That said, with commodity space earnings levels now 25% below normalised levels (a sharp contrast from 12 months ago, when earnings were 25% above normalised) and multiple chains at troughs, we think the
10、 upside skew from here is much more meaningful than the downside.We remain positive on the TiO2 names Chemours, Venator and Tronox. TiO2 was the first to signal the downturn and we expect it (at some point) to be one of the first chains to recover. We also reiterate our Buy rating on LyondellBasell
11、and Hold on Dow. We adjust our target prices to reflect the recent Q2 2019 earnings and lower our estimates.Changes to target pricesCurrent TPUpside/ Market capCompanyTicker CurrencypriceOldNewRatingdownside(USDm)Chemourscc USUSD12.6045.0043.00Buy241.3%2,060TronoxTROX USUSD8.1421.0020.00Buy145.7%1,1
12、55VenatorVNTR USUSD2.1015.0013.00Buy519.0%224LyondellBasellLYB USUSD75.61121.00125.00Buy65.3%25,348Dow IncDOW USUSD46.8553.0051.00Hold8.9%34,819Source: Refinitiv Datastream, HSBC estimates. Priced as of close at 13 August 2019Disclosures & DisclaimerThis report must be read with the disclosures and
13、the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it.ValuationWe value Dow based on a combination of PE, EV/EBITDA and DCF.On a normalised PE basis, we use an 11.5x multiple (in line with the historical average of its closest peers) on normalised EPS
14、 of USD4.6 (down from USD4.7 on lower estimates), implying fair value of USD53 per share (USD54 previously).On a normalised EV/EBITDA basis, we use a 6x multiple (unchanged, in line with the peers long-term average) on our normalised EBITDA of USD8.2bn (lower than LISD8.3bn earlier on lower estimate
15、s), implying fair value of USD47 per share (down from USD48 earlier). In our DCF, we use a 9.5% cost of equity, comprising a 3.0% risk-free rate, a 5.0% equity risk premium and a beta of 1.3. We use a 4.2% cost of debt assumption and a 70/30 target equity to debt ratio, which leads us to a weighted
16、average cost of capital of 7.9%. Our terminal value uses our estimate of normalised EBITDA and a terminal growth rate of 1 % to reflect long-term energy price inflation and little else (all unchanged).Our DCF implies USD53 per share fair value (from USD56 earlier on our reduced earnings estimates).O
17、ur rounded target price of USD51 (down from USD53 earlier) is based on the average of the three valuation methodologies. Our target price implies upside of 9%; we maintain our Hold rating, given the challenging outlook for plastics, MEG, polyurethanes and silicones in 2019-20.Key downside risks incl
18、ude:Extended cyclical downturns in both the polyethylene and polyurethanes businesses, driven by weaker-than-expected demand growth and higher-than-expected supplyPressure on ethane prices in North America due to fractionation and pipeline constraintsWeaker-than-expected MEG pricesNew capacity expan
19、sions and increased competition in the Silicones business.Dow: Valuation summaryValue per share (USD)475351Value per share (USD)475351Valuation methodologyNormalised PENormalised EV/EBITDADCFAverageSource: HSBC estimatesKey upside risks include:Stronger-than-expected demand growth, delays to expansi
20、ons, leading to a faster-than expected recovery in PE marginsShutdowns in Chinese polyurethane capacity, resulting in a margin recovery Better-than-expected realisation of cost savings and synergiesHigher-than-expected oil prices.Valuation dataBuyFinancials & valuation: Chemours CoFinancial statemen
21、tsYear to12/2018a12/2019e12/2020e12/2021 eYear to12/2018a12/2019e12/2020e12/2021 eProfit & loss summary (USDm)EV/sales0.60.90.70.6Revenue6,6385t5406,9067,460EV/EBITDA2.44.63.32.7EBITDA1,7401,0791,5081,679EV/IC1.11.21.11.0Depreciation & amortisation-284-304-301-316PE*2.24.42.52.1Operating profit/EBIT
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