工业化学品-中国会关闭老旧化工产能吗？Industrial Chemicals-China To Close Old Chemical Capacity

Summary of Key Points from the Conference Call Industry Overview - Industry: Industrial Chemicals in Europe [1] - Key Focus: The call discusses the potential closure of old chemical capacity in China and its implications for the global chemical industry, particularly in Europe [2][3]. Core Insights - China's Regulatory Actions: The National Development and Reform Commission (NDRC) and other authorities in China are gathering data on petrochemical facilities over 20 years old, with plans to phase out 30-year-old capacity by 2030. This aims to alleviate overcapacity and promote industry consolidation [2]. - Impact on Sentiment: The prohibition of new capacity additions is viewed as a significant step to address oversupply, which is expected to positively influence market sentiment towards European chemical companies such as BASF, Wacker, Solvay, and Arkema [3]. - Capacity Affected: Approximately 25% of refining capacity and 14% of chemical capacity in China is expected to be impacted by the proposed regulations [4]. Company-Specific Insights - BASF: Upgraded to Overweight with a target price of €54, based on a DCF valuation and peer trading comparables [11]. The company is expected to benefit from improved market conditions due to regulatory changes in China [3]. - Arkema: Target price set at €97, indicating a favorable valuation with a 7% free cash flow yield based on 2025 estimates [8]. - Solvay: Target price of €30, with risks including a negative terminal growth rate and high costs for decarbonization [12]. - Wacker Chemie: Target price of €99, with significant upside potential if earnings expectations are met [15]. Risks and Considerations - Upside Risks: Include the maintenance of acrylic spreads, recovery in technical polymers, and favorable foreign exchange movements [9][13]. - Downside Risks: Potential liabilities related to PFAS in the US and failure to replace lost sales to Evonik [10][14]. - Market Dynamics: Geopolitical risks and fluctuations in commodity prices could impact feedstock costs and overall demand [14][17]. Conclusion - The regulatory changes in China are expected to have a ripple effect on the global chemical industry, particularly benefiting European companies by addressing overcapacity issues. The sentiment towards companies like BASF, Arkema, and Wacker Chemie is likely to improve as a result of these developments.