Core Viewpoint - The bio-based 1,3-propanediol (PDO) industry in China is transitioning from "technology validation" to "scale production" by 2025, driven by the demand for green transformation in downstream markets such as textiles and cosmetics [2]. Group 1: PDO Production Capacity and Technological Advances - By 2025, multiple companies are accelerating the construction of large-scale production bases for bio-based PDO, with significant investments and technological breakthroughs [4][5]. - Companies like Qingda Zhixing and Heng Carbon Technology have successfully developed fermentation methods for PDO production, breaking the technological monopoly of foreign firms [5][6]. - Heng Carbon Technology has established a unique production base with an annual capacity of 15,000 tons, utilizing a revolutionary "three non-four no" technology that is highly environmentally friendly [6][7]. Group 2: Market Expansion and Applications - PDO is widely applicable in various industries, including polyester, cosmetics, polyurethane, pharmaceuticals, and coatings [10]. - The global bio-based PTT market, which utilizes PDO as a core monomer, is projected to grow from approximately 3.4 billion yuan in 2023 to 8.3 billion yuan by 2030, with a compound annual growth rate of 13.1% [13]. - Companies are forming strategic partnerships to create integrated industrial bases that enhance competitiveness in the bio-based PTT market [13][14]. Group 3: Emerging Companies and Innovations - New companies are emerging with innovative production techniques, such as Shandong Xiangchi Jianyuan Biotechnology, which is implementing advanced fermentation methods to enhance production efficiency [9]. - Zhongke Baiyijin has successfully produced bio-based PDO with a purity of 99.9% using biomass as a raw material [9]. - The industry is witnessing a structural expansion in downstream markets, particularly in textiles and cosmetics, benefiting from reduced raw material costs and increased production capacity [14].

Group 1 - The core view of the report indicates that the chemical industry in China is expected to see a bottoming out and improvement in supply-demand dynamics, with a marginal recovery in industry prosperity anticipated for 2026 [4][5][45] - In 2025, the chemical price index is projected to decline slightly, remaining in a low prosperity phase, but global energy costs have retreated from their highs, leading to positive changes in supply, demand, and inventory [4][15][45] - The report highlights that supply-side investment growth in the chemical industry is slowing, driven by anti-competitive policies and the exit of outdated overseas production capacities, which alleviates supply-side pressure [4][30][37] Group 2 - The report identifies three key investment directions for 2026: sub-industries with improving supply-demand dynamics, leading companies driven by capital expenditure and R&D, and high-end chemical new materials benefiting from increased demand or domestic substitution [5][46][57] - Sub-industries expected to see recovery include titanium dioxide, certain pesticide varieties, chemical fibers, and refrigerants, as traditional demand stabilizes and new industries emerge [5][49][57] - Leading companies are expected to concentrate capital expenditure on capacity expansion and high-value downstream products, with significant capital expenditures noted for companies like China Petroleum and Wanhua Chemical [6][51][52] Group 3 - The report emphasizes the ongoing domestic substitution in high-end chemical new materials, particularly in electronic chemical materials and ceramics, driven by the growth of emerging industries such as AI and biomedical applications [7][54][56] - The demand for electronic chemical materials is anticipated to increase as domestic companies make technological advancements and penetrate supply chains for semiconductor and display panel materials [55] - The ceramic materials market is expected to grow significantly due to new applications in biomedical fields, providing a new growth engine for high-end ceramic materials [56]

Core Insights - The liquid cooling server industry is experiencing significant growth, driven by increased demand for high-density servers and efficient cooling solutions [1][2] - Major companies are actively investing in liquid cooling technologies, with substantial market opportunities projected in the coming years [2][3] Industry Developments - Xiechuang Data plans to invest up to 9 billion yuan to purchase servers from multiple suppliers, indicating accelerated infrastructure development in cloud computing [1] - The 5th International AIDC Liquid Cooling Supply Chain Summit will be held on December 18-19, focusing on technology exchange and market trends [1] Market Projections - UBS forecasts that the global direct liquid cooling market for data centers will grow from $1.138 billion in 2024 to $31.191 billion by 2030, with a compound annual growth rate of 51% [2] - The AI server liquid cooling market is expected to reach $23.746 billion, while the non-AI server liquid cooling market will grow to $7.446 billion [2] Company Highlights - Yingweike (002837) holds over 35% market share in liquid cooling technology and is a designated temperature control supplier for major clients like Tencent and Alibaba [2] - Shenling Environment (301018) is a core supplier for Huawei's data centers, with 63 liquid cooling patents and a PUE as low as 1.15 [2] - Highlan (300499) uniquely supplies both server and energy storage solutions, with a client base including ByteDance and Alibaba [3] Key Component Suppliers - Juhua (600160) is a leading domestic supplier of electronic-grade fluorinated liquids, aiming for a 15% global market share by 2025 [4] - Feirongda (300602) specializes in integrated cooling solutions and is a core supplier for Huawei servers [5] - Zhongshi Technology (300684) provides unique nano-carbon material cooling plates, with over 90% of its business in liquid cooling modules [5] System Integration Leaders - Inspur (000977) is a leading global liquid cooling server provider, with a projected market share of over 45% in 2024 [6] - Zhongke Shuguang (603019) collaborates on liquid cooling server development, introducing a high-density cooling solution for complex computing scenarios [6] - Unisplendour (000938) has a significant market presence with over 35% share in the operator market and expects liquid cooling orders to exceed 5 billion yuan in 2024 [6] Other Relevant Companies - Guangxun Technology (002281) is the only domestic company to achieve mass production of liquid cooling optical modules, holding a 15% global market share [7] - Changfei Optical Fiber (601869) applies optical fiber technology to liquid cooling, enhancing data transmission efficiency [8] - Ruijie Network (301165) offers a full range of liquid cooling products and has launched a new immersion liquid cooling switch [8]

Investment Strategy Overview - The report emphasizes two main investment themes for the chemical industry: anti-involution policies and domestic substitution, which are expected to drive recovery and growth in the sector [4][5][6] Anti-Involution and Cycle Recovery - The report suggests that the chemical industry is at a turning point, with anti-involution measures leading to a recovery in the cycle. Key areas include the peak of new capacity in organic silicon, the end of PTA capacity expansion, and a rebound in prices for certain chemicals due to supply chain disruptions [4][5] - The China Chemical Product Price Index (CCPI) has decreased significantly, dropping to 3865 points by November 30, 2025, down 16.37% from early 2024 and 10.71% from the beginning of 2025 [4][20] Domestic Substitution as a Growth Driver - Domestic substitution is highlighted as a key growth driver, with significant support from national policies for bio-based materials and advancements in technology leading to a more robust domestic supply chain [4][6] - The report identifies several companies positioned to benefit from these trends, including KaiSai Bio and RuiFeng New Materials, which are making strides in bio-based materials and lubricant additives, respectively [5][6] Market Dynamics and Price Recovery - The report notes that while the chemical market is experiencing a downturn, certain segments are expected to see price recovery due to improved supply-demand dynamics and reduced capacity expansion [4][22] - Specific chemical products have shown varied price movements, with some experiencing significant declines while others are stabilizing or recovering [22] Manufacturing Sector Recovery - The manufacturing sector is showing signs of recovery, which is anticipated to support the chemical industry. The report mentions that the real estate market is stabilizing, and automotive production has increased, indicating a potential uptick in demand for chemical products [25][33] Capital Expenditure Trends - Capital expenditure growth in the chemical industry is slowing, with a notable decline in new projects. The report indicates that the total construction in progress for the chemical sector was 327.57 billion yuan in Q3 2025, down 17.64% year-on-year [34][39] Inventory and Consumption Trends - High inventory levels in the chemical sector are being addressed as consumer demand begins to recover. The report suggests that the inventory-to-revenue ratio for the basic chemical industry was 0.62 in Q3 2025, indicating a slight increase from the previous year [41][42] Profitability and Financial Performance - The report highlights a recovery in profitability for the chemical industry, with gross margins and return on equity (ROE) showing improvement in Q3 2025 compared to previous periods [56][60] - Specific sub-sectors, such as agrochemicals and fluorochemicals, have demonstrated significant profit growth, with some exceeding 100% year-on-year increases [55][56]

Group 1 - The PVDF concept sector experienced a decline of 3.09%, ranking among the top losers in the market, with companies like Zhongchuang Environmental Protection, Jinming Precision Machinery, and Huitian New Materials showing significant losses [1] - The top gainers in the market included the duty-free shop sector with a rise of 1.44%, while the superconducting concept saw a decline of 3.32% [2] - The PVDF concept sector faced a net outflow of 516 million yuan from major funds, with 16 stocks experiencing net outflows, and 12 stocks seeing outflows exceeding 10 million yuan [3] Group 2 - The stock with the highest net outflow was Duofluor, which saw a net outflow of 264 million yuan and a decline of 3.73% in its stock price [3] - Other notable companies with significant net outflows included Dongyangguang with 37.43 million yuan, Juhua Co. with 34.51 million yuan, and Putailai with 24.95 million yuan [3] - Zhongchuang Environmental Protection had a notable decline of 7.44% with a net outflow of 22.13 million yuan [4]

Core Viewpoint - The refrigerant quota for 2026 will be issued, with limited changes compared to 2025, indicating a continuation of the fluorochemical market trend. The current low inventory levels are expected to support price stability and market confidence [1][4]. Group 1: Refrigerant Market Dynamics - The 2026 quota plan confirms that the supply of third-generation refrigerants will return to the baseline level of early 2025, providing companies with some flexibility in allocation [1][4]. - Major manufacturers have raised prices for refrigerants, with R32, R125, R134a, and R410A experiencing price increases, laying a solid foundation for the upcoming market [1][3]. - The transition ratio from 10% to 30% is being managed in a restrained and orderly manner by various companies [1]. Group 2: PVDF Market Impact - The shutdown of a leading PVDF manufacturer, which holds over 65% of the domestic market share, is expected to significantly impact the market, with prices reaching up to 56,000 yuan/ton [2]. - Several companies have already increased their quotes for PVDF, indicating a potential upward trend in pricing [2]. Group 3: Price Trends and Forecasts - As of December 12, the average price of R32 is 63,000 yuan/ton, while R134a has surpassed 60,000 yuan/ton, supported by long-term contracts from automotive companies [3][4]. - The external trade market shows stable pricing for R32 and R134a, with slight increases for R125 [3]. Group 4: Recommended Stocks - Recommended stocks include Jinshi Resources, Juhua Co., Sanmei Co., and Haohua Technology, with other beneficiaries such as Dongyangguang, Yonghe Co., Dongyue Group, and Xinjubang also highlighted [5].

Group 1 - The total production quota for third-generation refrigerants in 2026 is set at 797,844 tons, with an internal quota of 394,082 tons, reflecting an increase of 5,962 tons and 4,502 tons respectively compared to 2025 [1] - The increase in production quotas for 2026 is primarily driven by R32 (up 1,171 tons), R134a (up 3,242 tons), and R245fa (up 2,918 tons), while reductions are noted for R143a (down 1,255 tons), R227ea (down 517 tons), and R152a (down 63 tons) [1] - The demand for refrigerants is expected to grow due to the increasing ownership of air conditioning and automotive cooling systems, which will continue to drive the demand for refrigerants [1][3] Group 2 - The prices of mainstream third-generation refrigerants have shown an upward trend, with annual increases of 43.75% for R134a, 19.74% for R125, 56.25% for R32, and 42.11% for R410 [2] - The domestic production of air conditioners from January to October 2025 reached 23,034 million units, a year-on-year increase of 3.00%, while automotive production during the same period totaled 27.325 million units, reflecting an 11.00% year-on-year increase [3] - The supply of third-generation refrigerants is expected to remain rigid due to quota constraints, while the demand from downstream sectors is anticipated to grow, indicating a positive outlook for the refrigerant market cycle [3] Group 3 - Key companies in the refrigerant sector include Juhua Co., Ltd. (600160.SH), Sanmei Co., Ltd. (603379.SH), Haohua Technology (600378.SH), and Yonghe Co., Ltd. (605020.SH) [4]

Group 1 - The fluorochemical index increased by 0.12% this week, outperforming the Shanghai Composite Index by 0.47% [1][2] - The fluorochemical index closed at 4922.45 points, with a performance that surpassed the CSI 300 Index by 0.20% and the basic chemical index by 2.63%, but lagged behind the new materials index by 0.54% [2] - The 2026 refrigerant quota is expected to be issued, with limited changes compared to the 2025 quota, indicating a stable market outlook [2] Group 2 - The shutdown of a major PVDF producer, Wanhao Company, is anticipated to catalyze market changes, with current prices for PVDF reaching up to 56,000 yuan/ton [3] - The price of fluorite has shown downward pressure, with the average market price for wet fluorite at 3,290 yuan/ton, down 0.87% from last week [4] - Refrigerant prices have shown an upward trend, with R134a prices exceeding 60,000 yuan/ton, supported by long-term contracts from automotive companies [5] Group 3 - Recommended stocks benefiting from the fluorochemical sector include Jinshi Resources, Juhua Co., Sanmei Co., and Haohua Technology [6] - Other stocks that may benefit include Dongyangguang, Yonghe Co., Dongyue Group, and Xinzhoubang [6]

Core Insights - The chemical industry report indicates a mixed performance in chemical product prices, with 42 products increasing in price, 37 decreasing, and 21 remaining stable during the week of December 8-14 [1][2] - The report suggests focusing on undervalued leading companies, the impact of "anti-involution" on supply in related sub-industries, and the importance of self-sufficiency in electronic materials and certain new energy materials amid price increases [1][6] Industry Dynamics - In the week of December 8-14, 47% of tracked chemical products saw a month-on-month price increase, while 44% experienced a decrease, and 9% remained unchanged [2] - The top price increases were noted in nitric acid, sulfuric acid, raw salt, bisphenol A, and TDI, while the largest declines were in PVA, LLDPE, trichloroethylene, and NYMEX natural gas [2] Oil Market Overview - International oil prices fell, with WTI crude oil futures closing at $57.44 per barrel (down 2.45%) and Brent crude at $61.12 per barrel (down 2.19%) [3] - The U.S. oil production averaged 13.853 million barrels per day, an increase of 38,000 barrels from the previous week and 222,000 barrels from the same period last year [3] - U.S. oil demand rose to an average of 21.082 million barrels per day, with gasoline demand increasing to 8.456 million barrels per day [3] TDI Market Analysis - TDI prices increased to an average of 14,713 yuan/ton, up 2.49% week-on-week and 5.51% month-on-month [4] - TDI production decreased, with an overall operating rate of approximately 58.55%, and various factories experiencing operational issues [4] - Average costs for TDI were 11,819 yuan/ton, down 0.92% week-on-week, while average gross profit rose by 31.79% week-on-week [4] Methionine Market Analysis - Methionine prices decreased to an average of 17,900 yuan/ton, down 2.45% week-on-week and 9.14% month-on-month [5] - The production remained stable at 18,350 tons, with an operating rate of 89.42% [5] - The cost of methionine was 13,853.73 yuan/ton, with a gross profit margin of 23.67% [5] Valuation Metrics - As of December 12, the TTM price-to-earnings ratio for the SW basic chemical sector was 24.14, and the price-to-book ratio was 2.19 [6] - The SW oil and petrochemical sector had a TTM price-to-earnings ratio of 12.85 and a price-to-book ratio of 1.24 [6] Investment Recommendations - The report recommends focusing on undervalued leading companies, sectors benefiting from policy support, and emerging fields such as semiconductor materials and new energy materials [6] - Specific companies highlighted for investment include Wanhua Chemical, Hualu Hengsheng, and others [6][7]

Investment Rating - The industry investment rating is "Positive (Maintain)" [5] Core Viewpoints - The production quota for third-generation refrigerants in 2026 is expected to remain relatively stable compared to 2025, with a total production quota of 797,844 tons, an increase of 5,962 tons from 2025. The internal use quota will increase by 4,502 tons [8] - The prices of third-generation refrigerants continue to rise, with significant annual increases observed, such as R134a increasing by 43.75% year-on-year [8] - The supply of refrigerants is expected to remain rigid due to quota constraints, while demand continues to grow, driven by increasing production of air conditioning units and automobiles [8] Summary by Sections Production Quota - The total production quota for third-generation refrigerants in 2026 is 797,844 tons, with internal use quota at 394,082 tons. The main increases are in R134a (3,242 tons) and R245fa (2,918 tons), while R143a, R227ea, and R152a see reductions [8] Price Trends - As of December 12, 2025, the prices for major third-generation refrigerants are as follows: R134a at 57,500 CNY/ton, R125 at 45,500 CNY/ton, R32 at 62,500 CNY/ton, and R410 at 54,000 CNY/ton, with notable monthly and annual growth rates [8] Demand and Supply Dynamics - Domestic air conditioning production from January to October 2025 reached 23,034 million units, a year-on-year increase of 3.00%. The automotive sector also saw a production increase of 11.00% during the same period, indicating a robust demand for refrigerants [8]