Core Viewpoint - The chemical industry is currently experiencing a dual bottom in valuation and profitability, with signs of recovery in profit margins and a potential upward trend in the economic cycle driven by demand recovery and resource supply contraction [1][2]. Group 1: Industry Performance - As of December 3, 2025, the chemical sector index rose by 0.87%, with notable gains from stocks such as Hangzhou Oxygen Plant (up 4.48%) and Yara International (up 4.42%) [1]. - The basic chemical sector's net profit increased by 7.45% year-on-year for the first three quarters of 2025, indicating a recovery trend despite mixed performance across sub-sectors [1]. - The overall chemical industry remains at a low level of prosperity, but a gradual improvement in profit margins is becoming evident [1]. Group 2: Market Dynamics - The industry is expected to benefit from reduced supply-side pressures and a global monetary easing environment, particularly with the anticipated interest rate cuts by the Federal Reserve, which could stimulate downstream demand [1]. - The focus on "anti-involution" policies is crucial as multiple sub-industries face competitive pressures, and the industry is likely to accelerate the release of high-performance new materials driven by AI demand [1][2]. Group 3: Investment Opportunities - Investors can track the chemical sector through the Jia Shi Chemical ETF (159129), which closely follows the China Securities Index for the chemical industry [2]. - There are also opportunities for off-market investors to engage with the chemical sector via the Chemical ETF Connect Fund (013527) [3].

Group 1 - The chemical sector has regained momentum, with the chemical ETF (516020) experiencing a maximum intraday increase of 1.39% and closing up 1.01% [1] - Key stocks in the sector include Hangzhou Oxygen Plant, which surged over 5%, and other companies like Yara International and Zangge Mining, which rose over 4% [1] - The overall market sentiment is positive, driven by strong performances in potassium fertilizers, lithium batteries, and polyurethane segments [1] Group 2 - Investment enthusiasm in energy storage is high, supported by continuous capacity compensation policies and the ongoing development of renewable energy, which will sustain demand for energy storage [3] - The chemical ETF (516020) is currently at a relatively low price-to-book ratio of 2.33, indicating good long-term investment potential [3] - The chemical industry is expected to face negative growth in capital expenditure starting in 2024, with supply-side contractions anticipated due to the "anti-involution" trend and the clearing of outdated overseas capacities [3] Group 3 - The chemical ETF (516020) tracks the CSI segmented chemical industry index, covering various sub-sectors and concentrating nearly 50% of its holdings in large-cap leading stocks [4] - Investors can also access the chemical ETF through linked funds, enhancing investment efficiency in the chemical sector [4]

Core Insights - The China Petroleum Industry Index rose by 0.16% as of December 2, 2025, with significant gains from stocks like Hengyi Petrochemical and Tongcheng New Materials [1] - The Petrochemical ETF (159731) experienced a slight decline of 0.12%, priced at 0.83 yuan [1] - Over the past week, the Petrochemical ETF attracted a net inflow of 21.32 million yuan, reaching a new one-year high in both share count and scale [1] Fund Performance - The Petrochemical ETF's net value increased by 28.05% over the past two years, with a maximum monthly return of 15.86% since inception [1] - The longest consecutive monthly gain for the ETF was 7 months, with a total increase of 27.01%, and an average monthly return of 4.96% during rising months [1] - As of December 1, 2025, the ETF outperformed its benchmark with an annualized excess return of 4.62% over the last six months [1] Index Composition - The top ten weighted stocks in the China Petroleum Industry Index account for 56.67% of the index, including Wanhua Chemical, China Petroleum, and Yilong Lake [1] - The individual weightings of these stocks vary, with Wanhua Chemical at 10.47% and China Petroleum at 7.63% [3]

Core Insights - The manufacturing PMI index for November is at 49.2%, showing a slight month-on-month increase of 0.2 percentage points, indicating a minor recovery within the contraction zone [6][7] - The new orders index for November is also at 49.2%, with a month-on-month increase of 0.4 percentage points, while the new export orders index rose by 1.7 percentage points to 47.6%, likely driven by the upcoming holiday shopping season [6][7] - The production index stands at 50.0%, reflecting a month-on-month increase of 0.3 percentage points, indicating stability at the threshold level [6][7] Macroeconomic Overview - Manufacturing purchasing and inventory intentions are still in the contraction zone, suggesting a need for further improvement in procurement sentiment [6][7] - Fixed asset investment projects, particularly in infrastructure and affordable housing, are expected to gain momentum towards the end of the year and the beginning of the next [6][7] Market Performance - The Shanghai Composite Index closed at 3914.01, up by 0.65%, while the Shenzhen Component Index rose by 1.25% to 13146.72 [3] - The performance of various industry indices shows that non-ferrous metals and telecommunications sectors led with increases of 2.85% and 2.81%, respectively, while agriculture and forestry sectors saw declines [4] Sector Analysis - The manufacturing sector's price index showed a recovery in November, with the main raw material purchase price index rising by 1.1 percentage points to 53.6%, indicating a high level of activity [7] - The equipment manufacturing and raw materials industries are sensitive to downstream fixed asset investments, with some signs of demand recovery in November [8]

Core Insights - The report indicates that the market is expected to experience an early "spring rally" due to easing external pressures and improving internal conditions [2][3] - The focus for December should be on growth sectors, particularly those aligned with the "14th Five-Year Plan" and new productive forces [3] Group 1: Market Environment - In November, market momentum was limited due to seasonal effects and external pressures, including tightening global liquidity and concerns over AI industry bubbles [1] - As of December, the pressure on the A-share market is gradually easing, with an 80% probability of a short-term interest rate cut by the Federal Reserve, creating a warmer overall atmosphere [2] - The sentiment around AI stocks has stabilized, reducing the emotional pressure on related A-share sectors [2] Group 2: Investment Recommendations - The report suggests focusing on two main directions for investment in December: the AI industry chain and sectors related to the "14th Five-Year Plan" [3] - Specific sectors to watch include chip design, semiconductor equipment, and platform companies with full-stack technical capabilities [4] - High-growth areas such as energy storage and innovative pharmaceuticals are highlighted as potential investment opportunities [4] Group 3: Top Stock Picks - The report lists ten recommended stocks, including: - BeiGene (688235.SH) in the pharmaceutical sector, with a projected EPS growth from 3.66 in 2026 to 6.73 in 2027 [5] - Haisco (002653.SZ), also in pharmaceuticals, with a projected EPS of 0.70 in 2026 and 0.81 in 2027 [5] - Longking (600388.SH) in environmental services, with a projected EPS of 1.20 in 2026 and 1.37 in 2027 [5] - Maiwei (300751.SZ) in machinery, with a projected EPS of 3.14 in 2026 and 3.93 in 2027 [5] - Yutong Bus (600066.SH) in the automotive sector, with a projected EPS of 2.67 in 2026 and 3.18 in 2027 [5] - Cambricon (688256.SH) in electronics, with a projected EPS of 11.64 in 2026 and 20.88 in 2027 [5] - CATL (300750.SZ) in new energy, with a projected EPS of 18.90 in 2026 and 23.35 in 2027 [5] - Alibaba (9988.HK) in media and internet, with a projected EPS of 4.33 in 2026 and 6.44 in 2027 [5] - Xianle Health (300791.SZ) in food and beverage, with a projected EPS of 1.37 in 2026 and 1.64 in 2027 [5] - Wanhua Chemical (600309.SH) in energy and chemicals, with a projected EPS of 5.13 in 2026 and 5.79 in 2027 [5] Group 4: Financial Data - The report provides financial forecasts for the top stock picks, indicating expected revenue and net profit growth across various sectors [62][63] - For example, BeiGene is projected to achieve a revenue of 370.27 billion in 2025, increasing to 462.80 billion in 2026 [63] - CATL is expected to see significant growth, with projected revenues of 4226.04 billion in 2025 and 5349.47 billion in 2026 [63]

Group 1 - The chemical sector continues to rise, with the Chemical ETF (516020) showing a maximum intraday increase of 1.89% and closing up 0.76% as of the report [1][2] - Key stocks in the sector include phosphorous chemicals, rubber additives, lithium batteries, and coatings, with notable gains from companies like Hebang Biological, Tongcheng New Materials, and Tinci Materials [1][2] - The Chemical ETF has outperformed major indices this year, with a year-to-date increase of 27.76%, compared to the Shanghai Composite Index's 16.02% and the CSI 300 Index's 15.04% [1][3] Group 2 - The lithium battery sector is expected to see a threefold increase in shipments from 2025 to 2035, leading to price increases for lithium hexafluorophosphate, projected to exceed 250,000 yuan per ton by 2026 [4] - The current price-to-book ratio of the Chemical ETF is 2.32, indicating a relatively low valuation compared to the past decade, suggesting a favorable long-term investment opportunity [4] - The Chemical ETF (516020) tracks the CSI Sub-Industry Chemical Theme Index, with nearly 50% of its holdings in large-cap stocks, providing exposure to leading companies in various chemical sub-sectors [5] Group 3 - The chemical industry is currently at a valuation and profit bottom, with net profits of 116 billion yuan in the first three quarters of 2025, reflecting a year-on-year increase of 7.45% [9] - Demand is expected to improve due to the Federal Reserve's potential interest rate cuts and stabilization of global political conditions, while cost pressures from oil and coal prices are anticipated to weaken [9] - The chemical sector is poised for a turning point driven by anti-involution policies, with a significant decrease in construction projects expected in the first half of 2025 [9]

Investment Rating - The report maintains an investment rating of "Outperform the Market - A" for the chemical industry [4]. Core Insights - The global chemical competition landscape is being reshaped, with European and Japanese companies facing capacity exits due to high energy costs and environmental pressures, while Chinese companies are rapidly gaining market share due to significant cost advantages [1][15]. - The EU chemical capacity utilization rate has decreased from 75.6% in Q2 2025 to 74.6% in Q3 2025, significantly below the long-term average of 81.3% [2][31]. - China's chemical industry is characterized by high capital investment and R&D, leading to a strong cost advantage and enhanced global competitiveness [3][36]. Summary by Sections 1. Europe: Dual Dilemma of High Energy Costs and Environmental Pressure - European chemical companies are heavily reliant on natural gas, with over 40% of raw materials sourced from it, leading to increased production costs [20]. - The average wholesale electricity price in the EU rose by 30% year-on-year to $90 per megawatt-hour in H1 2025, expected to be twice that of the US and 1.5 times that of China [2][20]. - The EU's carbon emissions trading system (ETS) and the Carbon Border Adjustment Mechanism (CBAM) are tightening regulations, further squeezing the competitiveness of European chemical products [23][29]. 2. China: Scale Effects and Cost Advantages of Super Factories - China leads globally in chemical capital expenditure and R&D, accounting for 47% and 32% of the global total, respectively [36][38]. - The production capacity of ethylene in China has doubled from 26.69 million tons in 2019 to 54.49 million tons in 2024, with import dependency decreasing from 8.8% to 5.0% [10]. - Major Chinese companies like Wanhua Chemical are expected to further reduce costs through technological upgrades and capacity expansions, enhancing their competitive edge [9][12]. 3. Domestic Chemical Core Assets Exhibit Strong Competitive Strength - The report highlights the increasing global influence of Chinese chemical companies, which are leveraging cost, scale, and technological advantages to expand their market presence [12]. - Key players in the industry include Wanhua Chemical, Hualu Hengsheng, and others, which are positioned to benefit from the ongoing industry consolidation and optimization [12].

Investment Rating - The industry investment rating is maintained as "Positive" [6] Core Insights - The unexpected shutdown of Huntsman’s MDI facility in Europe is expected to drive a rebound in MDI prices, with European and Middle Eastern prices already increasing [9] - The report highlights a recovery in the chemical industry, particularly in MDI, PVC, and phosphate chemicals, driven by high growth expectations in energy storage [8] - The report suggests that the supply contraction in MDI could lead to a price rebound, despite current demand not being at its peak [9] Summary by Sections MDI Market - Huntsman's MDI production facility in the Netherlands, with a capacity of 280,000 tons/year, is undergoing unexpected maintenance, which is likely to last at least a month, leading to price increases in MDI [9] - The report notes that MDI prices have already returned to last year's high points, and the supply situation is more favorable compared to TDI [9] Chemical Industry Outlook - The report identifies several companies with potential for recovery in the PVC sector, including Zhongtai Chemical, Xinjiang Tianye, Chlor-alkali Chemical, and Tianyuan Co., with Wanhua Chemical being highlighted as a leading MDI player [3] - The report also emphasizes the potential for price increases in oxalic acid, driven by demand from the new energy sector, with prices rising to 3,180 yuan/ton [9]

行 业 及 产 业 行 业 研 究 / 行 业 点 评 相关研究 证券分析师 马昕晔 A0230511090002 maxy@swsresearch.com 宋涛 A0230516070001 songtao@swsresearch.com 研究支持 任杰 A0230522070003 renjie@swsresearch.com 赵文琪 A0230523060003 zhaowq@swsresearch.com 邵靖宇 A0230524080001 shaojy@swsresearch.com 周超 A0230525090001 zhouchao@swsresearch.com 李绍程 A0230525070002 lisc@swsresearch.com 联系人 马昕晔 A0230511090002 maxy@swsresearch.com 2025 年 11 月 30 日 发改委持续推进"反内卷"进程， 多地 MDI 停车检修致价格上涨， 钾肥进口大合同同比持稳 看好 ——《化工周报 25/11/24-25/11/28》 本期投资提示： 请务必仔细阅读正文之后的各项信息披露与声明 本研究报告仅通过邮件提 ...

Investment Rating - The report does not explicitly state an investment rating for the industry Core Views - The chemical sector has shown positive performance with the Shanghai Composite Index rising by 1.4%, the ChiNext Index by 4.54%, and the CSI 300 by 1.64% during the week. The CITIC Basic Chemical Index increased by 3.49%, and the Shenwan Chemical Index rose by 2.98% [2][14] - Key sub-industries within the chemical sector have experienced varied performance, with membrane materials leading at 7.48% growth, followed by titanium dioxide at 5.85% and chlor-alkali at 4.57% [2][17] Summary by Sections Industry Dynamics - Wanhua Chemical announced a price increase of $200/ton for MDI products in Southeast Asia and South Asia starting December 1, 2025, due to market conditions and supply stability [3] - South Korea raised anti-dumping duties on PET film imports from China, significantly increasing the tax rate on Tianjin Wanhua's products from 3.84% to 36.98% [3] Investment Themes - **Tire Sector**: Domestic tire companies are becoming increasingly competitive, with a focus on scarce growth targets. Recommended companies include Sailun Tire, Senqcia, General Motors, and Linglong Tire [4] - **Consumer Electronics**: A gradual recovery in consumer electronics is anticipated, benefiting upstream material companies. Key players in the panel supply chain include Dongcai Technology, Stik, Light Optoelectronics, and Ruile New Materials [4] - **Phosphate Chemicals**: Supply constraints due to environmental policies and increasing demand from the new energy sector are tightening the supply-demand balance. Recommended companies include Yuntianhua, Chuanheng Co., Xingfa Group, and Batian Co. [5] - **Fluorochemicals**: The reduction of production quotas for second-generation refrigerants is stabilizing profitability, with a focus on companies like Jinshi Resources and Juhua Co. [5] - **Economic Recovery**: As the economy improves, leading chemical companies are expected to benefit significantly from price and demand recovery. Recommended companies include Wanhua Chemical, Hualu Hengsheng, and Baofeng Energy [9] - **Vitamin Supply Disruptions**: BASF's supply issues with vitamins A and E are expected to create market imbalances, with companies like Zhejiang Medicine and New Hecheng recommended for attention [9] Sub-Industry Reviews - **Polyurethane**: Pure MDI prices in East China rose to 19,700 RMB/ton, a 1.55% increase week-on-week, with operating rates stable at 68% [30] - **Tire Industry**: Full steel tire operating rates increased to 63.91%, while semi-steel tire rates decreased to 72.37% [54] - **Fertilizers**: Urea prices rose to 1,679.1 RMB/ton, with operating rates for urea at 86.4% [67][68] - **Vitamins**: Vitamin A prices remained stable at 63 RMB/kg, while Vitamin E prices fell by 2.88% to 50.5 RMB/kg [86][87] - **Fluorochemicals**: Fluorspar prices decreased to 3,350 RMB/ton, with a decline in operating rates to 34.12% [91]