Investment Rating - The report maintains a neutral outlook on the oil and chemical industry for 2026, with specific recommendations for various companies based on their performance and market conditions [10]. Core Insights - OPEC+ has decided to continue its production cuts, with a focus on cautious and flexible adjustments based on market conditions. The group has reaffirmed its commitment to compensate for overproduction since January 2024, which is expected to support oil prices in the short term [2][5]. - The downstream polyester sector is tightening in supply and demand, with expectations for improvement in market conditions. Key recommendations include high-quality companies in polyester filament and bottle-grade materials [10]. - The report highlights that oil prices are expected to stabilize, with a limited downside, and suggests focusing on companies with strong dividend yields and improving operational quality [10]. Summary by Sections OPEC+ Production Plans - OPEC+ has confirmed a pause in its planned production increase of 1.65 million barrels per day for February and March 2026 due to seasonal demand weakness. The group emphasizes the need for full compensation for overproduction since January 2024 [2][5]. - The actual production for Q1 2026 is expected to be lower than nominal quotas, with adjustments in compensation plans leading to a reduction of 0.1-0.2 million barrels per day compared to nominal quotas [5]. Price Trends - As of January 9, 2026, Brent crude oil futures closed at $63.34 per barrel, reflecting a week-on-week increase of 4.26%. WTI futures rose to $59.12 per barrel, up 3.14% [14]. - The report notes that the average price for Brent and WTI for the week was $61.55 and $57.66 per barrel, respectively, indicating slight fluctuations in the market [14]. Company Recommendations - The report recommends focusing on high-quality companies in the polyester sector, such as Tongkun Co. and Wankai New Materials, as well as major refining companies like Hengli Petrochemical and Rongsheng Petrochemical, which are expected to benefit from improved cost structures and competitive advantages [10]. - It also highlights the offshore oil service sector, suggesting continued optimism for companies like CNOOC Services and Haiyou Engineering due to high capital expenditures in offshore exploration [10]. Market Dynamics - The report indicates that the U.S. oil production for January 2, 2026, was 13.81 million barrels per day, showing a slight decrease from the previous week but a year-on-year increase of 330,000 barrels per day [23]. - The number of active oil rigs in the U.S. decreased to 544, down 2 from the previous week and down 40 year-on-year, indicating a potential slowdown in exploration activities [25]. Valuation Metrics - The report provides a valuation table for key companies in the oil and chemical sector, detailing market capitalization, earnings per share (EPS), and price-to-earnings (PE) ratios for companies like China National Petroleum and Hengli Petrochemical [11].

Investment Rating - The report maintains a positive outlook on the oil and petrochemical industry, indicating a favorable investment rating due to clear short-term support from the oil supply side [2][3]. Core Insights - OPEC+ continues to pause production increases, with a focus on compensating for overproduction since January 2024, which strengthens short-term supply support [2][3]. - The upstream sector is experiencing rising oil prices, while day rates for self-elevating drilling rigs are declining, indicating a mixed outlook for drilling services [2][13]. - The refining sector shows a decrease in overseas refined oil crack spreads, while olefin spreads are increasing, suggesting a potential improvement in refining profitability [2][47]. - The polyester sector is witnessing a decline in PTA profitability but an increase in polyester filament profitability, indicating a need for close monitoring of demand changes [2][10]. Summary by Sections Upstream Sector - Brent crude oil futures closed at $63.34 per barrel, up 4.26% week-on-week, while WTI futures rose 3.14% to $59.12 per barrel [13]. - U.S. commercial crude oil inventories decreased by 3.83 million barrels to 419 million barrels, which is 3% lower than the five-year average [14]. - The number of active U.S. drilling rigs decreased to 544, down 2 rigs from the previous week and down 40 rigs year-on-year [27]. Refining Sector - The Singapore refining margin for major products was $11.04 per barrel, down $4.15 from the previous week [49]. - The U.S. gasoline RBOB-WTI spread increased to $15.4 per barrel, up $1.3 from the previous week, but still below the historical average of $24.5 per barrel [52]. - The olefin sector shows a positive trend with an increase in the ethylene-crude oil spread, indicating potential profitability improvements [57]. Polyester Sector - PTA prices have declined, with the average price in East China at 5069.25 CNY per ton, down 0.75% week-on-week [2]. - The polyester filament POY spread increased to 905 CNY per ton, up 17 CNY from the previous week, indicating a slight improvement in profitability [2][10]. - The overall performance of the polyester industry is average, with expectations for gradual improvement as new capacity comes online [2][10]. Investment Recommendations - The report recommends focusing on high-quality companies in the polyester sector, such as Tongkun Co. and Wankai New Materials, due to tightening supply and demand conditions [10]. - It suggests monitoring large refining companies like Hengli Petrochemical and Rongsheng Petrochemical, which may benefit from improved cost structures and competitive advantages [10]. - The upstream exploration and development sector remains robust, with recommendations for offshore oil service companies like CNOOC Services and Offshore Engineering [10].

Market Overview - The Shanghai Composite Index rose by 1.09% on January 12, with 28 out of the 31 sectors experiencing gains, led by the Media and Computer sectors, which increased by 7.80% and 7.26% respectively [2] - The Oil and Petrochemical sector was the biggest loser, declining by 1.00%, followed by Coal and Real Estate, which fell by 0.47% and 0.29% respectively [2] Capital Flow Analysis - The main capital outflow from the two markets totaled 27.468 billion yuan, with 11 sectors seeing net inflows [2] - The Computer sector had the highest net inflow of capital, amounting to 15.774 billion yuan, while the Media sector followed with a net inflow of 5.391 billion yuan [2] Oil and Petrochemical Sector Details - The Oil and Petrochemical sector saw a net outflow of 833.5 million yuan, with 47 stocks in the sector; 16 stocks rose while 28 fell [3] - Among the stocks with net inflows, China Petroleum had the highest at 56.8917 million yuan, followed by Runbei Hangke and Guanghui Energy with inflows of 23.7265 million yuan and 19.5017 million yuan respectively [3][5] - The stocks with the largest net outflows included Hengli Petrochemical, with an outflow of 144.7569 million yuan, followed by Intercontinental Oil and Tongyuan Petroleum with outflows of 105.274 million yuan and 92.8059 million yuan respectively [3] Individual Stock Performance - Hengli Petrochemical decreased by 2.37% with a turnover rate of 0.49% and a net outflow of 144.7569 million yuan [3] - Intercontinental Oil increased by 2.56% with a significant turnover rate of 19.53%, but still experienced a net outflow of 105.274 million yuan [3] - China Petroleum saw a decline of 3.08% with a turnover rate of 0.45% and a net inflow of 56.8917 million yuan [5]

Group 1 - The core point of the article highlights the recent stock performance of Hengli Petrochemical, which saw a decline of 2.02% on January 12, with a current price of 22.75 CNY per share and a total market capitalization of 160.14 billion CNY [1] - As of January 12, the company experienced a net outflow of main funds amounting to 74.20 million CNY, with significant selling pressure observed [1] - The stock has shown a year-to-date increase of 0.98%, with notable gains of 3.36% over the past five trading days, 22.11% over the past 20 days, and 36.06% over the past 60 days [1] Group 2 - As of September 30, the number of shareholders for Hengli Petrochemical was 67,300, reflecting a decrease of 9.54% from the previous period, while the average circulating shares per person increased by 10.55% to 104,566 shares [2] - For the period from January to September 2025, the company reported a revenue of 157.38 billion CNY, a year-on-year decrease of 11.46%, and a net profit attributable to shareholders of 5.02 billion CNY, down 1.61% year-on-year [2] - The company has distributed a total of 26.14 billion CNY in dividends since its A-share listing, with 7.60 billion CNY distributed over the past three years [3] Group 3 - As of September 30, 2025, the top ten circulating shareholders of Hengli Petrochemical included Hong Kong Central Clearing Limited as the fifth largest shareholder, holding 204 million shares, a decrease of 35.58 million shares from the previous period [3] - Huatai-PB CSI 300 ETF is noted as a new entrant among the top ten circulating shareholders, holding 35.78 million shares [3]

Investment Rating - The industry investment rating is maintained as "Positive" [5] Core Viewpoints - The adjustment of export tax rebate policies does not alter the competitive advantage of China's chemical industry. The cancellation of export tax rebates for various chemical products is expected to increase export costs, reflecting China's energy and waste treatment capabilities. Despite theoretical concerns about competitiveness, high energy-consuming products like PVC lack global expansion capacity, and the price increase due to VAT will not significantly change competitive dynamics [2][7] - Market rumors do not change the profit recovery opportunities in the industry. Reports of regulatory discussions regarding monopolistic risks have led to stock price corrections for leading chemical companies. However, the industry is still in a self-rescue phase, with production cuts not aimed at achieving monopolistic profits but rather at facilitating recovery from previous losses [2][7] Investment Recommendations and Targets - Recommended leading companies in the refining industry include Sinopec (600028, Buy), Rongsheng Petrochemical (002493, Buy), and Hengli Petrochemical (600346, Buy). The report also highlights recovery opportunities in various chemical sub-industries, such as MDI leader Wanhua Chemical (600309, Buy) and PVC-related companies like Zhongtai Chemical (002092, Not Rated), Xinjiang Tianye (600075, Not Rated), Chlor-alkali Chemical (600618, Not Rated), and Tianyuan Co., Ltd. (002386, Not Rated). In the phosphoric chemical sector, companies like Chuanheng Co., Ltd. (002895, Not Rated) and Yuntianhua (600096, Not Rated) are noted for their growth potential driven by rapid energy storage growth. In the oxalic acid sector, attention is drawn to Hualu Hengsheng (600426, Buy), Huayi Group (600623, Buy), and Wankai New Materials (301216, Buy) [3]

Investment Rating - The report maintains a "Recommended" rating for the chemical industry [1] Core Insights - The chemical industry is expected to experience an upward cycle due to the implementation of "anti-involution" policies in China and the accelerated exit of some European facilities [29] - The report highlights the potential for domestic substitution of semiconductor materials from Japan due to rising geopolitical tensions, which could benefit various companies in the sector [5] - The chromium salt industry is undergoing a value reassessment driven by increased demand from AI data centers and commercial aircraft engines, with a projected supply-demand gap of 340,900 tons by 2028 [8] Summary by Sections Industry Performance - The chemical industry has shown strong relative performance with a 1-month increase of 10.7%, 3-month increase of 9.6%, and a 12-month increase of 45.1%, outperforming the CSI 300 index [3] Price Trends - Key products such as lithium carbonate and polysilicon have seen significant price increases, supported by policy guidance and industry self-discipline [12] - The price of chromium salts has remained stable, with metal chromium priced at 82,000 CNY/ton as of January 9, 2026 [15] Investment Opportunities - Focus on companies with low-cost expansion capabilities, such as Wanhu Chemical and Hualu Hengsheng, as well as those in sectors with improving market conditions like chromium salts and phosphates [6][9] - High dividend yield opportunities are identified in state-owned enterprises like China Petroleum and China National Chemical [10] Key Company Tracking - Companies such as Dongfang Shenghong and Huabei Yihua are highlighted for their earnings potential, with projected EPS growth for 2026 [30] - The report tracks specific price movements for various chemicals, including a notable increase in the price of ammonium phosphate and a stable price for urea [17][19]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The report highlights the implementation of differentiated pricing for high-energy-consuming industries in Shaanxi Province, which may provide new policy ideas for combating internal competition [4][22] - BOPET prices have shown a strong upward trend, with some companies still expressing intentions to raise prices, although price stability is currently key [5][24] Summary by Sections Industry Trends - The chemical industry index outperformed the CSI 300 index by 2.24% this week, with 82.39% of stocks in the chemical sector rising [16] - The CCPI (China Chemical Product Price Index) increased by 1.25% this week [19] Key Industry Insights - The Shaanxi Province's proposal for differentiated electricity pricing for high-energy-consuming industries aims to phase out backward production capacity, which could benefit leading companies in the sector [4][22][23] - BOPET prices in East China reached 7,500-7,700 RMB/ton, with an average price of 7,556.25 RMB/ton, reflecting a weekly increase of 42.68 RMB/ton (0.57%) [5][24] Recommended and Beneficiary Stocks - Recommended stocks include leading chemical companies such as Wanhua Chemical, Hualu Hengsheng, and Hengli Petrochemical [7] - Beneficiary stocks include Xinjiang Tianye and Zhongtai Chemical in the calcium carbide and chlor-alkali sectors [23][36] Product Tracking - The price of urea increased by 1.46% to an average of 1,735 RMB/ton, while phosphate rock prices remained stable [40][41] - The market for viscose staple fiber is stable, with an average price of 12,800 RMB/ton, while demand remains weak [34]

Core Viewpoint - The report highlights the growth trends in China's synthetic fiber industry, indicating a production increase and providing insights into market dynamics from 2026 to 2032 [1] Industry Overview - In November 2025, China's synthetic fiber production reached 6.88 million tons, reflecting a year-on-year growth of 5.7% [1] - From January to November 2025, the cumulative production of synthetic fibers in China was 72.404 million tons, with a cumulative growth rate of 4.9% [1] Companies Mentioned - The report lists several key companies in the synthetic fiber sector, including Hengyi Petrochemical, Rongsheng Petrochemical, Xin Fengming, Tongkun Co., Hengli Petrochemical, Jilin Chemical Fiber, Huafeng Chemical, Aoyang Health, Taihe New Materials, and Jiangnan High Fiber [1] Research and Consulting - The insights are derived from a report by Zhiyan Consulting, a leading industry consulting firm in China, which specializes in providing in-depth industry research reports, business plans, feasibility studies, and customized services [1]

Core Viewpoint - The actual controller of Hengli Petrochemical Co., Ltd., Mr. Chen Jianhua, plans to increase his shareholding in the company by investing between RMB 5 billion and RMB 10 billion over a 12-month period starting from April 9, 2025 [2]. Group 1: Shareholding Increase Plan - Mr. Chen Jianhua intends to use his own or raised funds to purchase shares through the Shanghai Stock Exchange's trading system [2]. - As of the announcement date, Mr. Chen has not yet increased his shareholding due to financial arrangements and the gradual implementation of the plan [4]. - The plan may face risks of delays or non-implementation due to changes in the capital market or funding issues [2][5]. Group 2: Implementation Progress - The increase plan has not been completed as of the announcement date, and Mr. Chen will continue to follow the outlined plan for share acquisition [4]. - The plan does not lead to any changes in the company's controlling shareholder or actual controller [5][6]. Group 3: Regulatory Compliance - The shareholding increase behavior complies with relevant laws, regulations, and the rules of the Shanghai Stock Exchange [6]. - The company will monitor the implementation of the increase plan and fulfill its information disclosure obligations as required [6].

Group 1: Innovation in Technology - The lightest satellite produced by Starry Sky Technology weighs only 20 kg, showcasing the advancement in micro-nano satellite applications for everyday users [1] - Beijing Changmu Valley Medical Technology's surgical robot reduces hip replacement surgery time by 30% and achieves precision control within a millimeter, enhancing the efficiency of orthopedic surgeries [2] - The automation in Shagang's cold-rolled intelligent sampling and testing center has transformed the sampling process from manual to automated, significantly improving efficiency [3] Group 2: Research and Development Growth - A report from the All-China Federation of Industry and Commerce indicates that the top 1000 private enterprises in China will see record levels of R&D investment and outcomes in 2024, driving economic growth through sustained innovation [4] Group 3: Optimizing Business Environment - The Supreme People's Court has released four typical cases to protect the rights of private enterprises, emphasizing that a strong legal framework is essential for a favorable business environment [5] - Continuous policy initiatives are being implemented to enhance the business environment, including the removal of barriers to fair competition and the promotion of private investment [8] Group 4: Resilience and Market Adaptation - Hengli Group has developed industrial silk that is lightweight yet strong, demonstrating the company's focus on core competencies and resilience in facing external challenges [10] - Over 60% of "specialized and innovative" small giant enterprises are deeply engaged in industrial foundational sectors, enhancing the competitiveness of the supply chain [11] - Private enterprises have become a major force in foreign trade, with imports and exports reaching 23.52 trillion yuan, a year-on-year increase of 7.1% [11]