Market Overview - The recent escalation of tensions in the Middle East has led to a decline in A-shares, while Hong Kong stocks showed a slight decrease with the Hang Seng Index down by 0.59% [1] - Israeli airstrikes on Iran involved over 200 aircraft and more than 330 bombs, targeting key facilities related to Iran's nuclear program [1] Oil Market Impact - Brent crude oil futures surged over 13% during Asian trading on June 13, with significant increases in related stocks such as Shandong Molong up over 75% and Sinopec Oilfield Service up 25% [2][3] - In the worst-case scenario, a larger conflict could reduce Iranian oil exports by 2.1 million barrels per day, impacting global oil supply [3] Gold and Defense Sector - Gold prices typically rise during conflicts, with stocks like Chifeng Jilong Gold up over 10% and other jewelry-related companies also seeing gains [3] - The Middle East's military trade, which accounted for 36.87% of global imports from 2013 to 2022, may see increased activity, particularly benefiting domestic defense manufacturers like AVIC [3] Shipping and Utilities - The demand for shipping is strong, with companies like China Shipbuilding Leasing seeing significant stock price increases, indicating a supply-demand imbalance [4] - Utility stocks are favored in the current market environment, with companies like Anhui Expressway and Datang International Power Generation also experiencing gains [4] Pharmaceutical Sector - The pharmaceutical sector is showing signs of weakness, with companies like Junshi Biosciences experiencing a drop of over 10% due to financing activities [4] - Conversely, companies like Innovent Biologics are seeing gains, indicating a mixed performance within the sector [5] Real Estate Policy Changes - Guangzhou's proposed consumption stimulus plan includes easing restrictions on real estate, which may positively impact local developers like Yuexiu Property and China Resources Land [6] Refrigerant Market - Dongyue Group is positioned to benefit from rising refrigerant prices, with significant production capacity and market share in R22 and R32 refrigerants [7][8] - The company is expected to see substantial profit growth as refrigerant prices rise due to increased demand [7]

Market Overview - The Hang Seng Index fell by 0.21%, down 49 points, closing at 23,857 points, while the Hang Seng Tech Index decreased by 0.59% [1] - The early trading volume in the Hong Kong stock market reached HKD 102.1 billion [1] Sector Performance - The non-ferrous metal sector showed strong performance, with institutions optimistic about sustained profitability; Luoyang Molybdenum Co. rose by 4% and Jiangxi Copper Co. increased by 3.11% [1] - The three major telecom operators in Hong Kong experienced gains, with China Unicom, China Mobile, and China Telecom all rising over 2% [1] Notable Stock Movements - China Silver Group surged over 23%, with spot silver prices reaching nearly USD 36, marking a 13-year high [1] - Longpan Technology saw a rise of 3.35% after signing a large order for 150,000 tons of lithium iron phosphate, indicating a boost in solid-state battery production [1] - Dongyue Group increased by 1.54% as prices for third-generation refrigerants continued to rise, positioning the company as a leader in R22 and R32 quotas [1] - Youjia Innovation rose by 7% after securing a key model for a new energy brand under Changan Automobile [1] - Shijiazhuang Pharmaceutical Group increased by 4.27% after obtaining production registration for calcium gluconate and sodium chloride injection [1] - Zhongxu Future surged over 11% as the issuance of domestic game licenses reached a new high, with multiple new titles planned for release within the year [1] Company-Specific Challenges - Dongfeng Group's stock fell over 3% amid clarification from its controlling shareholder that there are no current restructuring plans, with a reported 17.1% year-on-year decline in vehicle sales for the first five months [2] - Alibaba Health dropped by 3.46% as its profits for the fiscal year 2025 fell short of expectations, with UBS suggesting the company may struggle to maintain its current valuation [3] - The automotive sector faced renewed declines, with analysts predicting an unavoidable new round of price wars, leading to a trend of increased revenue without profit growth; XPeng Motors fell by 2.9% and Li Auto decreased by 1.46% [3]

Group 1 - The third-generation refrigerant R32 has seen a price surge, with the domestic average price exceeding 50,000 yuan per ton, representing a 42% year-on-year increase [2] - As of June 5, the gross profit for R32 reached 35,000 yuan per ton, an increase of over 10,000 yuan per ton compared to the same period last year [2] - Several brokerages are optimistic about the third-generation refrigerant's market cycle, anticipating that leading companies will benefit significantly [2] Group 2 - Dongyue Group (00189) is a leading player in China's fluorosilicon industry, holding the fourth domestic quota for HFCs and the first for R22 [3] - The company has integrated advantages across its two main industrial chains: fluorochemical (hydrofluoric acid, refrigerants, and fluorinated polymers) and silicon chemical (monomers, intermediates, and deep-processing products) [3]

数据统计显示，中证港股通回购指数近一个月上涨7.47%，近三个月上涨6.64%，年至今上涨16.06%。 据了解，中证港股通回购指数从港股通范围内选取50只回购比例较高的上市公司证券作为指数样本，以 反映港股通范围内高回购比例上市公司证券的整体表现。该指数以2018年12月28日为基日，以1000.0点 为基点。 从指数持仓来看，中证港股通回购指数十大权重分别为：汇丰控股（10.68%）、友邦保险 （10.64%）、腾讯控股（9.81%）、美团-W（7.89%）、快手-W（7.46%）、东岳集团（5.98%）、石药 集团（5.17%）、恒生银行（5.14%）、太古股份公司Ａ（4.99%）、中远海控（3.59%）。 从中证港股通回购指数持仓的市场板块来看，香港证券交易所占比100.00%。 从中证港股通回购指数持仓样本的行业来看，金融占比26.46%、通信服务占比17.84%、可选消费占比 14.80%、医药卫生占比13.53%、房地产占比8.29%、工业占比6.27%、原材料占比6.13%、能源占比 3.31%、信息技术占比1.93%、主要消费占比1.44%。 资料显示，指数样本每季度调整一次，样本调整实施时 ...

Core Viewpoint - Goldman Sachs economists predict that the RMB/USD exchange rate will reach 7.20, 7.10, and 7.00 in three, six, and twelve months respectively, indicating a potential appreciation of 3% over the next twelve months [1] Group 1: Companies Likely to Benefit from RMB Appreciation - The list of Hong Kong-listed companies that may benefit from RMB appreciation includes: GDS Holdings Limited (09698), Zijin Mining Group (02899), China Jinmao Holdings Group (00817), Dongyue Group (00189), China Southern Airlines (01055), Baidu Group (09888), China Feihe (06186), and Tencent Holdings (00700) [1] - Criteria for selection include: 1) Market capitalization over $2 billion and average daily trading volume (ADVT) exceeding $5 million 2) Industries reliant on USD imports, such as aviation, petrochemicals, construction, staple foods, and tourism, or having over 20% of debt in USD 3) Overseas revenue exposure below 30% 4) No foreign exchange gains during the RMB depreciation period in 2024 5) Low correlation of returns with exchange rate fluctuations [1] Group 2: Companies Likely to Underperform in RMB Appreciation - The list of Hong Kong-listed companies that may underperform during RMB appreciation includes: Haier Smart Home (06690), PetroChina Company Limited (00857), WuXi AppTec (03933), ASMPT Limited (00522), Yue Yuen Industrial Holdings (00551), Sinotruk (Hong Kong) Limited (03808), Shenzhou International Group Holdings Limited (02313), and Minth Group Limited (00425) [2] - Criteria for selection include: 1) Market capitalization over $2 billion and average daily trading volume exceeding $5 million 2) Overseas revenue exposure exceeding 30% 3) USD debt level below 5% 4) No foreign exchange losses during the RMB depreciation period in 2024 5) High correlation of returns with exchange rate fluctuations [2]

Core Viewpoint - The 9th China (Zibo) Chemical Technology Equipment Exhibition aims to leverage Zibo's strong chemical industry base to promote high-quality development and innovation in the sector [3][4]. Industry Overview - Zibo has 482 chemical enterprises with an industrial scale of 374.29 billion, accounting for nearly one-seventh of Shandong province's total [3]. - The city has developed three major industry segments: petrochemicals, fine chemicals, and new chemical materials, along with four key industrial chains including polyolefins and polyurethane [3]. Exhibition Details - The exhibition will cover an area of 80,000 square meters and attract over 1,200 domestic and international enterprises, marking a new high in scale and influence [3]. - The event will feature a forum on "Industrial Internet + AI Technology Empowering Chemical Industry Development," focusing on AI applications and digital transformation paths for the chemical sector [3][4]. Operational Model - The exhibition adopts a collaborative model of "government guidance + association hosting + enterprise undertaking," with a focus on market-oriented operations [4]. - A targeted invitation strategy was employed, reaching out to over 30 chemical parks and 200 industry leaders to ensure effective participation [4]. Innovation and Sustainability - The exhibition emphasizes precision and professionalism, with a scientific layout of exhibition areas based on chemical equipment subfields and supply chain systems [4]. - Local enterprises like Heda Group and Dongyue Group will showcase cutting-edge products, highlighting the strength and innovation of Shandong's high-end chemical industry cluster [5]. Future Goals - The Shandong High-end Chemical Industry Development Promotion Association aims to transform the exhibition into a key hub connecting policies, technologies, and markets, fostering efficient circulation and deep integration of various elements [5].

Investment Rating - The report indicates a positive outlook for the chemical industry, suggesting a new cycle may begin due to improved domestic supply and demand, increased global market share, and declining crude oil prices [3][4]. Core Viewpoints - The chemical industry is expected to enter a new cycle driven by domestic supply-demand improvements and global market share growth, despite potential short-term impacts from overseas demand [3][5]. - The report highlights that the supply side is gradually improving due to reduced fixed asset investment growth and government policies aimed at curbing excessive competition [5][10]. - On the demand side, domestic consumption is anticipated to recover steadily, supported by government initiatives to boost consumption and stabilize the economy [26][33]. - Cost factors are favorable, with significant declines in international crude oil and domestic coal prices, which will support the profitability of chemical products [42][49]. - The report recommends specific companies within various segments of the chemical industry, including refrigerants, amino acids, military and new materials, and fertilizers, indicating potential investment opportunities [5][57]. Summary by Sections Supply Side - The report notes that the chemical industry has faced profitability pressures since 2022, but the current production cycle is nearing its end, which may lead to gradual improvement in profitability as capacity is digested [11][12]. - China's global market share in chemical products has been steadily increasing, with 2023 figures showing a 43.1% share of global sales [25][20]. Demand Side - The report emphasizes that domestic demand is expected to recover, aided by government policies aimed at stimulating consumption and investment [26][33]. - The real estate sector shows signs of stabilization, which could further support demand for chemical products [33]. Cost Side - The report highlights a significant decline in crude oil prices, with Brent crude falling by 14.71% since the beginning of 2025, which is expected to positively impact the cost structure of the chemical industry [42][38]. - Domestic coal and natural gas prices have also shown a downward trend, enhancing the cost competitiveness of chemical products [49][47]. Valuation - The report indicates that the valuation of the basic chemical and petrochemical sectors is at historical lows, suggesting substantial room for recovery as market conditions improve [54][50].

Group 1 - The core viewpoint is that the refrigerant industry is experiencing a price uptrend due to supply constraints and increasing demand driven by seasonal factors and government policies [1][2] - In Q2, the price of R32 long-term contracts rose to 46,600 yuan/ton, an increase of approximately 6,000 yuan/ton compared to the previous quarter [1] - The demand for refrigerants is expected to grow significantly due to government subsidy policies, restocking in Europe and the US, and increasing demand from emerging regions in Southeast Asia [1] Group 2 - The second-generation refrigerants, such as R22, are expected to face a supply-demand gap by 2025 due to rapid supply contraction and support from the air conditioning repair market [1] - The third-generation refrigerant R32 is projected to maintain a tight supply-demand balance in 2025, despite a slight year-on-year increase in supply [1] - The refrigerant industry is characterized by high concentration, with major players showing a strong determination to maintain prices amid low inventory levels [1][2] Group 3 - Dongyue Group (00189) is a leading player in China's fluorosilicon industry, holding the fourth-largest HFCs quota and the largest R22 quota domestically [3] - The company benefits from integrated advantages across both fluorochemical and silicon chemical industries [3]

Investment Rating - The investment rating for Dongyue Group is "Outperform the Market" [5][30][31] Core Views - The refrigerant market is experiencing an upward trend, leading to continuous improvement in the company's performance. In 2024, the company achieved a net profit attributable to shareholders of 811 million yuan, a year-on-year increase of 14.6% [8][30] - The company is a leading producer of R22 and R32 refrigerants in China, with significant production capacity and quotas, which positions it well to benefit from rising refrigerant prices [2][19] - The fluoropolymer segment has a complete industrial chain and cost advantages, contributing to profit growth despite a decrease in revenue [3][23] - The organic silicon segment is seeing improved supply-demand dynamics, with increased sales volume offsetting price declines [4][24] Summary by Sections Financial Performance - In 2024, Dongyue Group reported revenue of 14.181 billion yuan, a decrease of 2.2% year-on-year, while net profit reached 811 million yuan, up 14.6% [8][30] - The gross profit margin was 21.62%, an increase of 4.81 percentage points year-on-year, and the net profit margin was 6.96%, up 2.76 percentage points [8][30] Refrigerant Segment - The refrigerant segment generated revenue of 3.248 billion yuan in 2024, a year-on-year increase of 13.1%, with profits soaring by 159.6% to 806 million yuan [2][19] - The company holds approximately 22,000 tons of R22 production capacity and 6,000 tons of R32 capacity, with significant market share in quotas [2][19] Fluoropolymer Segment - The fluoropolymer segment achieved revenue of 3.825 billion yuan in 2024, a decrease of 16.0%, but profits increased by 50.9% to 508 million yuan [3][23] - The company benefits from a complete industrial chain and cost advantages, positioning it for high-end market breakthroughs [3][23] Organic Silicon Segment - The organic silicon segment reported revenue of 5.213 billion yuan in 2024, a year-on-year increase of 7.2%, with profits turning positive at 102 million yuan [4][24] - Despite price declines, the increase in sales volume has led to improved financial performance [4][24] Future Outlook - The company is expected to maintain a long-term growth trajectory in the refrigerant market, with forecasts for net profits of 2.177 billion yuan in 2025 and 2.953 billion yuan in 2026 [30][31] - The EPS is projected to be 1.26 yuan in 2025 and 1.70 yuan in 2026, reflecting strong growth potential [30][31]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 10.00 [7][8] Core Views - The company reported a revenue of RMB 14.18 billion for 2024, a decrease of 2.2% year-on-year, while the net profit attributable to the parent company was RMB 0.81 billion, an increase of 14.6% year-on-year [1] - The profitability of refrigerants is expected to continue improving, leading to a positive outlook for the company [1][4] - The company’s net profit for 2024 was below expectations due to significant losses from the disposal of real estate business [1] Revenue and Profitability Analysis - The revenue from the polymer materials segment decreased by 16% to RMB 3.83 billion, while the gross profit increased by 51% to RMB 0.51 billion due to cost control measures [2] - The organic silicon segment saw a revenue increase of 7.3% to RMB 5.21 billion, with gross profit turning positive at RMB 0.10 billion [2] - The refrigerant segment benefited from supply-demand dynamics, with revenue increasing by 13% to RMB 3.25 billion and gross profit rising by 160% to RMB 0.81 billion [2] - The overall gross margin improved by 4.8 percentage points to 21.6%, while the expense ratio decreased by 1.1 percentage points to 13.3% [2] Price Trends and Market Conditions - As of April 23, 2024, the prices for refrigerants R22, R32, R125, and R134a increased by 9%, 13%, 7%, and 11% respectively since the beginning of the year, indicating a tight supply and sustained demand from downstream sectors [3] - Prices for PTFE and PVDF materials showed slight increases, while some organic silicon products experienced minor declines [3] Profit Forecast and Valuation - The profit forecast for the company has been slightly adjusted upwards, with expected net profits of RMB 1.62 billion, RMB 2.10 billion, and RMB 2.37 billion for 2025, 2026, and 2027 respectively [4] - The report assigns a price-to-earnings ratio of 10x for 2025, reflecting a discount compared to comparable companies, leading to a target price of HKD 10.00 [4]