Report Industry Investment Rating No relevant content provided Core Viewpoints of the Report - The average prices of pure MDI, polymer MDI, and TDI in the polyurethane sector this week were 18,200 yuan/ton, 14,286 yuan/ton, and 13,449 yuan/ton respectively, with week-on-week changes of +286 yuan/ton, -207 yuan/ton, and +134 yuan/ton. Their respective gross profits were 5,099 yuan/ton, 2,184 yuan/ton, and 2,211 yuan/ton, with week-on-week changes of +383 yuan/ton, -110 yuan/ton, and +105 yuan/ton [2]. - In the oil, gas, and olefin sector, the average prices of ethane, propane, steam coal, and naphtha this week were 1,364 yuan/ton, 3,777 yuan/ton, 531 yuan/ton, and 3,937 yuan/ton respectively, with week-on-week changes of +21 yuan/ton, +15 yuan/ton, +16 yuan/ton, and -0 yuan/ton. The average price of polyethylene was 7,441 yuan/ton, a week-on-week decrease of 78 yuan/ton. The theoretical profits of ethane cracking, CTO, and naphtha cracking to produce polyethylene were 892 yuan/ton, 1,593 yuan/ton, and 15 yuan/ton respectively, with week-on-week changes of -56 yuan/ton, -96 yuan/ton, and -51 yuan/ton. The average price of polypropylene was 6,680 yuan/ton, a week-on-week decrease of 120 yuan/ton. The theoretical profits of PDH, CTO, and naphtha cracking to produce polypropylene were 16 yuan/ton, 1,289 yuan/ton, and -113 yuan/ton respectively, with week-on-week changes of -86 yuan/ton, -122 yuan/ton, and -78 yuan/ton [2]. - In the coal chemical sector, the average prices of synthetic ammonia, urea, DMF, and acetic acid this week were 2,154 yuan/ton, 1,596 yuan/ton, 3,907 yuan/ton, and 2,410 yuan/ton respectively, with week-on-week changes of -21 yuan/ton, -0 yuan/ton, -21 yuan/ton, and -19 yuan/ton. Their respective gross profits were 140 yuan/ton, -83 yuan/ton, -168 yuan/ton, and 154 yuan/ton, with week-on-week changes of -55 yuan/ton, -14 yuan/ton, +25 yuan/ton, and -6 yuan/ton [2]. - The chemical blue-chip companies mentioned in the report are Wanhua Chemical, Baofeng Energy, Satellite Chemical, Hualu Hengsheng, New Hope Liuhe, and Adisseo [2]. Summary According to Relevant Catalogs 1. Basic Chemical Weekly Data Briefing - **Related Company Performance Tracking**: The basic chemical index had a week-on-week increase of 2.1%, a month-on-month increase of 1.8%, a three-month increase of 7.8%, a one-year increase of 21.9%, and a year-to-date increase of 23.0% as of October 24, 2025. Among the related companies, Baofeng Energy had a week-on-week increase of 7.0%, a month-on-month increase of 8.6%, a three-month increase of 11.8%, a one-year increase of 15.9%, and a year-to-date increase of 12.1%. Satellite Chemical had a week-on-week increase of 2.8%, a month-on-month decrease of 1.7%, a three-month decrease of 0.3%, a one-year increase of 0.3%, and a year-to-date increase of 0.0%. Hualu Hengsheng had a week-on-week increase of 0.9%, a month-on-month decrease of 0.8%, a three-month increase of 3.1%, a one-year increase of 6.0%, and a year-to-date increase of 16.6%. New Hope Liuhe had a week-on-week increase of 0.3%, a month-on-month increase of 0.2%, a three-month increase of 5.5%, a one-year decrease of 1.0%, and a year-to-date increase of 10.0%. Wanhua Chemical had a week-on-week decrease of 0.1%, a month-on-month decrease of 3.0%, a three-month decrease of 0.6%, a one-year decrease of 21.5%, and a year-to-date decrease of 12.7% [8][10]. - **Related Company Profit Tracking**: As of the closing price on October 24, 2025, the total market capitalization of Wanhua Chemical was 192.4 billion yuan, with net profits attributable to the parent company of 13 billion yuan in 2024A, 13.5 billion yuan in 2025E, 16.5 billion yuan in 2026E, and 19 billion yuan in 2027E. Baofeng Energy had a total market capitalization of 132.7 billion yuan, with net profits attributable to the parent company of 6.3 billion yuan in 2024A, 12.4 billion yuan in 2025E, 14.1 billion yuan in 2026E, and 14.9 billion yuan in 2027E. Satellite Chemical had a total market capitalization of 61.4 billion yuan, with net profits attributable to the parent company of 6.1 billion yuan in 2024A, 6.6 billion yuan in 2025E, 8 billion yuan in 2026E, and 9.8 billion yuan in 2027E. Hualu Hengsheng had a total market capitalization of 52.8 billion yuan, with net profits attributable to the parent company of 3.9 billion yuan in 2024A, 4.3 billion yuan in 2025E, 4.7 billion yuan in 2026E, and 5.1 billion yuan in 2027E. New Hope Liuhe had a total market capitalization of 71.4 billion yuan, with net profits attributable to the parent company of 5.9 billion yuan in 2024A, 6 billion yuan in 2025E, 6.9 billion yuan in 2026E, and 7.3 billion yuan in 2027E. Adisseo had a total market capitalization of 25.4 billion yuan, with net profits attributable to the parent company of 1.2 billion yuan in 2024A, 1.6 billion yuan in 2025E, 1.7 billion yuan in 2026E, and 2.1 billion yuan in 2027E [8][10]. - **Polyurethane Industry Chain**: The average price of pure MDI this week was 18,200 yuan/ton, with a week-on-week increase of 286 yuan/ton and a seven-year quantile of 25%. Its gross profit was 5,099 yuan/ton, with a week-on-week increase of 383 yuan/ton and a seven-year quantile of 73%. The average price of polymer MDI was 14,286 yuan/ton, with a week-on-week decrease of 207 yuan/ton and a seven-year quantile of 21%. Its gross profit was 2,184 yuan/ton, with a week-on-week decrease of 110 yuan/ton and a seven-year quantile of 45%. The average price of TDI was 13,449 yuan/ton, with a week-on-week increase of 134 yuan/ton and a seven-year quantile of 31%. Its gross profit was 2,211 yuan/ton, with a week-on-week increase of 105 yuan/ton and a seven-year quantile of 67% [8][10]. - **Oil, Gas, and Olefin Industry Chain**: - **Raw Material Prices**: The average price of ethane this week was 26 cents/gallon (1,364 yuan/ton), with a week-on-week increase of 0.41 cents/gallon (21 yuan/ton) and a ten-year quantile of 63% (74%). The average price of propane was 532 dollars/ton (3,777 yuan/ton), with a week-on-week increase of 2 dollars/ton (15 yuan/ton) and a ten-year quantile of 45% (51%). The average price of NYMEX natural gas was 3.4 dollars/mmbtu (1,252 yuan/ton), with a week-on-week increase of 0.38 dollars/mmbtu (138 yuan/ton) and a ten-year quantile of 78% (79%). The average price of Brent crude oil was 63 dollars/barrel (3,282 yuan/ton), with a week-on-week increase of 1 dollar/barrel (69 yuan/ton) and a ten-year quantile of 41% (49%). The average price of naphtha was 555 dollars/ton (3,937 yuan/ton), with a week-on-week change of -0 dollars/ton (-0 yuan/ton) and a ten-year quantile of 43% (52%). The average price of steam coal was 531 yuan/ton, with a week-on-week increase of 16 yuan/ton and a ten-year quantile of 61%. The average price of methanol was 2,276 yuan/ton, with a week-on-week decrease of 29 yuan/ton and a ten-year quantile of 26% [8][10]. - **Profit Comparison of Oil, Gas, and Coal Routes**: For polyethylene production, the profit of ethane cracking was 892 yuan/ton, with a week-on-week decrease of 56 yuan/ton, a decrease of 475 yuan/ton compared to the beginning of the year, and a decrease of 907 yuan/ton year-on-year. The profit of naphtha cracking was 15 yuan/ton, with a week-on-week decrease of 51 yuan/ton, a decrease of 60 yuan/ton compared to the beginning of the year, and a decrease of 60 yuan/ton year-on-year. The profit of MTO was -77 yuan/ton, with a week-on-week increase of 2 yuan/ton, an increase of 320 yuan/ton compared to the beginning of the year, and an increase of 320 yuan/ton year-on-year. The profit of CTO was 1,593 yuan/ton, with a week-on-week decrease of 96 yuan/ton, an increase of 392 yuan/ton compared to the beginning of the year, and a decrease of 265 yuan/ton year-on-year. For polypropylene production, the profit of PDH was 16 yuan/ton, with a week-on-week decrease of 86 yuan/ton, a decrease of 332 yuan/ton compared to the beginning of the year, and an increase of 401 yuan/ton year-on-year. The profit of naphtha cracking was -113 yuan/ton, with a week-on-week decrease of 78 yuan/ton, a decrease of 254 yuan/ton compared to the beginning of the year, and an increase of 338 yuan/ton year-on-year. The profit of MTO was -381 yuan/ton, with a week-on-week decrease of 24 yuan/ton, an increase of 106 yuan/ton compared to the beginning of the year, and a decrease of 93 yuan/ton year-on-year. The profit of CTO was 1,289 yuan/ton, with a week-on-week decrease of 122 yuan/ton, an increase of 177 yuan/ton compared to the beginning of the year, and a decrease of 84 yuan/ton year-on-year [8][10]. 2. Basic Chemical Weekly Report - **2.1 Basic Chemical Index Trend**: No specific content provided - **2.2 Polyurethane Sector**: Analyzed the price trends and price - spread relationships of pure MDI, polymer MDI, and TDI [17][20] - **2.3 Oil, Gas, and Olefin Sector**: Analyzed the price trends of domestic steam coal, naphtha, crude oil, propane, ethane, and natural gas, as well as the profitability of different routes for producing polyethylene and polypropylene [24][25][33] - **2.4 Coal Chemical Sector**: Analyzed the price trends and gross profit situations of synthetic ammonia, urea, DMF, acetic acid, coke, methanol, and other products [40][45][50] - **2.5 Animal Nutrition Sector**: Analyzed the price trends of solid and liquid methionine, VA, and VE [62][66][68]

Core Insights - During the "14th Five-Year Plan" period, Decheng District has achieved remarkable results in technological innovation, particularly with a significant increase in the number of innovative entities [1][3] Group 1: Growth of Technology Enterprises - As of now, the district has registered 145 national technology-based small and medium-sized enterprises (SMEs), with an expected increase to 170 by the end of 2025, representing an astonishing growth of over 370% compared to the end of 2020 [1][3] - The number of national high-tech enterprises is also rapidly expanding, projected to reach 69 by the end of 2024, which is a 102.94% increase from the end of 2020, thus achieving the high-tech enterprise growth target ahead of schedule [3] Group 2: Support Mechanisms - The achievements are attributed to a carefully constructed and deeply implemented tiered cultivation mechanism for technology-based SMEs, high-tech enterprises, and leading technology enterprises [3] - The district has systematically promoted the growth of enterprises along this "ladder" by gathering resources and providing precise policy support and services [3] Group 3: Quality and Capability Enhancement - The cultivation efforts have transitioned from mere quantity accumulation to qualitative breakthroughs, with companies like Dehua Chemical and Kaisheng Jinghua being recognized as the first batch of "technology small giant" enterprises in Shandong Province [3] - Hualu Hengsheng (600426) has been awarded as a leading technology enterprise in Shandong Province, indicating a significant leap in the innovation capabilities of local enterprises [3] Group 4: Economic Impact - The exponential growth in the number and capability of technology-based enterprises demonstrates the effectiveness of Decheng District's innovation-driven development strategy, providing continuous core power for high-quality regional economic development [3]

Core Viewpoint - Chemical concept stocks experienced a significant rise in the afternoon, with Hengli Petrochemical increasing by over 5%, and both Yanhai Co. and Hualu Hengsheng rising by over 4% [1] Group 1: Market Performance - The chemical ETF rose approximately 2% due to market influences [1] - Specific ETFs showed the following performance: - Chemical ETF (159870) increased by 2.34% to 0.701 - Chemical ETF (516020) increased by 2.06% to 0.742 - Chemical 50 ETF (516120) increased by 2.16% to 0.756 - Chemical Leader ETF (516220) increased by 1.98% to 0.773 - Petrochemical ETF (159731) increased by 1.94% to 0.789 - Chemical Industry ETF (516570) increased by 1.91% to 0.854 [2] Group 2: Industry Outlook - Some brokerages suggest that the profitability of chemical products may have bottomed out, with fundamental downward risks fully released [2] - Chemical blue-chip stocks are expected to experience a dual recovery in valuation and profitability [2] - The industry, constrained by supply shortages, is anticipated to be the first to show elasticity, emphasizing the importance of focusing on upward demand certainty and the value reassessment of high-dividend chemical resource stocks [2]

Group 1 - The chemical sector showed resilience on October 23, with the chemical ETF (516020) rebounding after an initial dip, reaching a maximum intraday increase of 1.24% and closing up 0.83% [1][2] - Key stocks in the sector included Hengli Petrochemical, which surged over 5%, and several others like Xin Fengming and Rongsheng Petrochemical, which rose more than 3% [1][2] - The city of Linyi announced a focus on the fine chemical industry as one of its 13 key industrial chains, emphasizing new fertilizers and rubber materials [1][3] Group 2 - East China Securities noted a shift in the global chemical landscape, with Europe experiencing a decline in production capacity, leading to the closure of 21 major chemical plants and a loss of over 11 million tons of capacity [3] - China's chemical industry is filling gaps in the international supply chain due to its cost and technological advantages, potentially reshaping the global chemical landscape [3][4] - The chemical ETF (516020) is currently at a low valuation, with a price-to-book ratio of 2.23, indicating a favorable long-term investment opportunity [3][4] Group 3 - The outlook for the chemical sector suggests structural optimization on the supply side, with a focus on resilient and advantageous product segments [4][5] - The ETF tracks the CSI segmented chemical industry index, covering various sub-sectors, with nearly 50% of its holdings in leading stocks like Wanhua Chemical and Salt Lake Potash [5]

Investment Rating - The report assigns a "Buy" rating to Shandong Hualu-Hengsheng Chemical, with a target price of 31.32 yuan based on a 14.5x PE for FY26 [3][13]. Core Insights - The company has shown a month-on-month net profit increase of 21.95% in Q2 2025, despite a year-on-year revenue decline of 7.14% [4][15]. - The integrated projects are expected to enhance the product structure, with a total investment of 3.387 billion yuan aimed at producing 200,000 tons of BDO and 160,000 tons of NMP annually [4][15]. - The gasification platform upgrade project is projected to generate an average annual revenue of 3.665 billion yuan post-completion, with a total investment of 3.039 billion yuan [4][15]. Financial Performance Summary - For 2025, the company is forecasted to achieve a net profit of 3.700 billion yuan, with revenues expected to decline by 2.5% to 33.376 billion yuan [5]. - The gross margin for Q2 2025 was reported at 19.63%, showing a month-on-month increase of 3.28 percentage points [4][15]. - The company’s sales volume for chemical fertilizers and organic amines increased by 13.62% and 33.21% respectively in H1 2025 [4][15].

Market Overview - The Shandong state-owned enterprise reform sector experienced a decline of 0.42% on October 20, with Baoding Technology leading the drop [1] - The Shanghai Composite Index closed at 3863.89, up 0.63%, while the Shenzhen Component Index closed at 12813.21, up 0.98% [1] Top Performers in Shandong State-Owned Enterprises - Chui Mu Co., Ltd. (002083) saw a significant increase of 10.00%, closing at 6.16 with a trading volume of 481,000 shares and a transaction value of 296 million [1] - Lu Xin Investment (600783) rose by 6.25%, closing at 14.10 with a trading volume of 226,200 shares and a transaction value of 314 million [1] - Bo Shen Co., Ltd. (002282) increased by 4.31%, closing at 7.50 with a trading volume of 152,800 shares and a transaction value of 113 million [1] Underperformers in Shandong State-Owned Enterprises - Baoding Technology (002552) experienced a decline of 8.88%, closing at 17.04 with a trading volume of 381,600 shares and a transaction value of 659 million [2] - Shandong Gold (600547) fell by 6.34%, closing at 37.94 with a trading volume of 816,300 shares and a transaction value of 3.132 billion [2] - Dongjie Intelligent (300486) decreased by 3.48%, closing at 20.27 with a trading volume of 257,000 shares and a transaction value of 526 million [2] Capital Flow Analysis - The Shandong state-owned enterprise reform sector saw a net outflow of 543 million from institutional investors, while retail investors contributed a net inflow of 770 million [2][3] - Notable net inflows from retail investors were observed in several stocks, including Chui Mu Co., Ltd. (002083) with a net inflow of 72.05 million [3] - Conversely, significant net outflows from institutional investors were noted in stocks like Langxin Information (000977) with a net outflow of 61.54 million [3]

Industry Investment Rating - The investment rating for the basic chemical industry is "Outperform" [1] Core Views - The basic chemical industry is currently under pressure due to global trade sentiment, with a focus on cyclical bottoming and potential recovery in leading companies such as Wanhua Chemical, Yangnong Chemical, Hengli Petrochemical, and Hualu Hengsheng [4][5] - The basic chemical sector has experienced a decline of 5.83% this week, underperforming the CSI 300 index by 3.61 percentage points [5][18] Summary by Sections Industry Overview - The closing index for the basic chemical sector is 3951.07, with a 52-week high of 4195.72 and a low of 3081.91 [1] Market Performance - The basic chemical sector has underperformed the CSI 300 index year-to-date, with a decline of 18.96 percentage points compared to the index's increase of 33.31% [18] - This week, the sector's performance was marked by significant fluctuations, with notable gainers including Sanfu Co. (up 33.17%) and Chengxing Co. (up 25.12%) [6][18] Price Movements - Key products in the lithium battery materials sector have seen price increases, with liquid chlorine rising by 184.91% and lithium cobalt oxide by 19.74% [8][23] - Conversely, R22 prices have dropped significantly by 51.52% [9][25] Key Companies and Investment Ratings - Wanhua Chemical: Buy rating, closing price at 61.5, market cap of 192.56 billion, 2025E EPS of 135.5 [11] - Yangnong Chemical: Buy rating, closing price at 68.8, market cap of 27.89 billion, 2025E EPS of 13.9 [11] - Hengli Petrochemical: Buy rating, closing price at 24.6, market cap of 52.29 billion, 2025E EPS of 37.3 [11]

Investment Rating - The industry investment rating is "Overweight," indicating an expected outperformance of the industry index relative to the benchmark by more than 5% over the next six months [76]. Core Insights - The polyurethane sector shows mixed price movements with pure MDI averaging 17,914 CNY/ton (+336 CNY/ton), polymer MDI at 14,493 CNY/ton (-293 CNY/ton), and TDI at 13,315 CNY/ton (-150 CNY/ton) [2]. - In the oil, coal, and gas olefin sector, ethane and propane prices decreased, while coal remained stable. Ethylene averaged 5,580 CNY/ton (-124 CNY/ton) and polypropylene remained unchanged at 6,800 CNY/ton [10]. - The coal chemical sector saw slight increases in synthetic ammonia and acetic acid prices, with synthetic ammonia at 2,175 CNY/ton (+3 CNY/ton) and acetic acid at 2,430 CNY/ton (+15 CNY/ton) [10]. Summary by Sections 1. Polyurethane Sector - Average prices for pure MDI, polymer MDI, and TDI are 17,914 CNY/ton, 14,493 CNY/ton, and 13,315 CNY/ton respectively, with corresponding gross profits of 4,716 CNY/ton, 2,295 CNY/ton, and 2,106 CNY/ton [2][17][20]. 2. Oil, Coal, and Gas Olefin Sector - Ethane and propane prices are 1,343 CNY/ton (-130 CNY/ton) and 3,763 CNY/ton (-46 CNY/ton) respectively. Ethylene's theoretical profit from ethane cracking is 949 CNY/ton (+39 CNY/ton) [2][10][34]. 3. Coal Chemical Sector - Average prices for synthetic ammonia, urea, DMF, and acetic acid are 2,175 CNY/ton, 1,596 CNY/ton, 3,929 CNY/ton, and 2,430 CNY/ton respectively, with gross profits of 195 CNY/ton, -68 CNY/ton, -194 CNY/ton, and 160 CNY/ton [2][10][41]. 4. Related Listed Companies - Key companies in the chemical sector include Wanhua Chemical, Baofeng Energy, Satellite Chemical, Hualu Hengsheng, and Xinheng [2].

Investment Rating - The report maintains an "Optimistic" rating for the chemical industry [3][4]. Core Insights - The report highlights a recovery opportunity at the bottom of the chemical cycle, particularly in the titanium dioxide sector, with major companies expanding globally and focusing on asset acquisitions [3][4]. - Global oil supply is expected to increase significantly, driven by non-OPEC production, while demand remains stable with a projected global GDP growth of 2.8% [4][5]. - The report emphasizes the importance of various chemical chains, including textiles, agriculture, and exports, as well as the potential for recovery in profitability for titanium dioxide due to easing trade tensions and improved overseas real estate conditions [3][4]. Summary by Sections Industry Dynamics - Oil supply is anticipated to rise, with OPEC+ expected to increase production, while demand is stable but may slow due to tariffs [4]. - Coal prices are expected to stabilize at a low level, and natural gas exports from the U.S. are likely to increase, reducing import costs [4]. Chemical Product Prices and Trends - The report notes that the PPI for all industrial products fell by 2.3% year-on-year in September, indicating a narrowing decline compared to August [5]. - Manufacturing PMI rose to 49.8%, suggesting a continued recovery in manufacturing activity [5]. Investment Analysis - The report suggests focusing on four key areas for investment: textiles, agriculture, export-related chemicals, and sectors benefiting from reduced competition [3]. - Specific companies to watch include Lu Xi Chemical, Tongkun Co., and Huafeng Chemical in the textile chain, and various firms in the agricultural sector such as Hualu Hengsheng and Baofeng Energy [3][4]. Key Company Valuations - The report provides a valuation table for key companies, indicating their market capitalization and projected earnings for the coming years [14].

Investment Rating - The report maintains an "Optimistic" rating for the chemical industry [3][4]. Core Insights - The report highlights the global expansion of major titanium dioxide manufacturers, emphasizing the opportunity for industry recovery from the bottom of the cycle. The acquisition of Venator UK's titanium dioxide assets and the establishment of subsidiaries in Malaysia and the UK are key developments [4][5]. - The macroeconomic outlook for the chemical sector indicates stable oil demand despite a slight slowdown due to tariffs, with global GDP growth projected at 2.8%. The report also notes that coal prices are stabilizing and natural gas export facilities in the U.S. are expected to accelerate [4][5]. - The report suggests investment strategies across various sectors, including textiles, agriculture, and chemicals, with a focus on companies benefiting from the "anti-involution" policies [4][5]. Summary by Sections Industry Dynamics - The report discusses the current macroeconomic conditions affecting the chemical industry, including oil supply and demand dynamics, with a forecast of increased production from non-OPEC sources and stable global oil demand [5][6]. - It notes that the PPI for industrial products decreased by 2.3% year-on-year in September, indicating a stabilization in prices due to improved supply-demand structures [6]. Investment Analysis - The report recommends a diversified investment approach focusing on sectors such as textiles, agriculture, and export-oriented chemicals, highlighting specific companies for potential investment [4][18]. - Key materials for growth are identified, including semiconductor materials and packaging materials, with specific companies mentioned for each category [4][18]. Price Movements - The report provides detailed price movements for various chemical products, including titanium dioxide, fertilizers, and pesticides, indicating a mixed outlook with some prices stabilizing while others show slight declines [11][14][20]. - It highlights the impact of external factors such as raw material costs and international trade dynamics on pricing trends within the chemical sector [11][14].