Plastics Manufacturing Industry: Investment Opportunity Is Presenting

The plastics manufacturing industry has clearly outperformed the market in the past one and a half years, indicating that the industry may have reached a turning point; the plastics industry PE valuation is at a historically reasonable level and has a valuation advantage over other chemical sub-sectors.

Plastics are important raw materials in the national economy and play an important role in modern society. Plastics are collectively referred to as plastic compounds. The current plastics are generally based on synthetic resins or natural resins as base materials, adding various additives, reinforcing materials, and fillers, and molding the resulting solid materials or products at a certain temperature and pressure. Due to the unique properties of plastics, plastic products have been widely used in modern society. Traditional plastic products are mainly used in packaging, agriculture, construction, etc., and with the continuous development of the times and the gradual strengthening of production processes, a variety of high value-added new plastic products emerged.

Benefiting from the recovery of the global economy and the rapid development of the domestic economy, China's plastics industry will continue to grow. The global economy has entered a stage of stable recovery. Manufacturing PMIs in major economies have been on the rise since 2009, indicating that external demand is good. And the domestic economy will also gradually enter the soft landing channel in the first half of 2011 and enter a new round of long-term growth channels in the second half of the year. With the gradual improvement of foreign economic situation and the rapid development of the domestic economy, China's plastics industry has ushered in new opportunities for development. Although the regulation of real estate will not relax, the construction of affordable housing, the “Twelfth Five-Year Plan” for various regions and industries, and the construction of water conservancy infrastructure projects will provide support for the scale of investment, which will benefit the plastic building materials industry; and the consumption caused by residents’ disposable income growth. The upgrade will also benefit the downstream household appliances and automotive industries of plastics; the country’s industrial upgrading policy will also promote the further development of the plastics new materials industry.

High value-added plastic products are the direction of future plastics industry development:

The development trend of China's plastics industry shows that the traditional sub-sectors such as plastic building materials and plastic packaging materials have been growing steadily, while the sub-sectors with high value-added modified plastics, degradable plastics, and special plastic films have grown rapidly. High value-added plastic products belong to the “new materials” industry. The industry has high technical content, high barriers to entry, and high profitability. It belongs to industries encouraged by the national industrial transition process and represents the future direction of China’s plastics industry.