Core Viewpoint - The A-share market experienced a collective decline, while the petrochemical industry index rose, indicating a divergence in sector performance amidst broader market challenges [1]. Industry Summary - During the "14th Five-Year Plan" period, China's petrochemical industry is expected to see accelerated capacity expansion for basic products, but the growth in terminal demand is insufficient, leading to a "involution" competition that results in low profitability [1]. - The current phase is viewed as a strategic window for the global petrochemical industry chain restructuring, with expectations for the "15th Five-Year Plan" period to focus on high-quality transformation and upgrading through measures such as industry self-discipline, policy guidance for phasing out backward capacity, and enhancing supply chains [1]. Company Summary - Key stocks in the petrochemical sector, such as Hengyi Petrochemical, Xin Fengming, and Tongkun Co., saw significant price increases, with Hengyi Petrochemical hitting the daily limit and Xin Fengming rising over 9% [1]. - The petrochemical ETF (159731) and its related funds closely track the petrochemical industry index, which is dominated by refining and trading (27.12%), chemical products (23.87%), and agricultural chemical products (19.75%), positioning them to benefit from policies aimed at reducing involution and optimizing structure [1].

Core Viewpoint - The petrochemical industry in China is entering a concentrated production period from 2019 to 2025, with average capacity growth exceeding 10% per year, leading to increased competition and declining operating rates/profits, yet apparent consumption of key petrochemical products is expected to grow rapidly during this phase [1] Group 1: Industry Trends - The petrochemical sector is experiencing a significant expansion in capacity, particularly in refining, ethylene, PX, methanol, and refining by-products, driven by policy [1] - The export of chemical products is shifting towards quantity over price, with a notable decline in price indices across various sectors, while export volumes for plastics, rubber, and automotive products are expected to maintain growth rates above 10% from 2023 to 2025 [3] - Domestic self-sufficiency rates for key petrochemical products have significantly improved, with ethylene and PX self-sufficiency rates increasing by 19% and 18%, respectively, which corresponds to the absorption of 949,000 and 855,000 tons of capacity [4] Group 2: Demand Dynamics - The development of new industries and emerging consumer markets in China is driving demand for chemical products, particularly in the new energy vehicle and wind power sectors, leading to increased demand for EVA, POE, epoxy resins, and PVDF [5] - The overall domestic demand remains moderate, but structural highlights are evident, with traditional plastics benefiting from the rise of e-commerce and delivery services [5] - The integration, scaling, and intensification of domestic industrial chains are establishing comparative advantages, while the economic growth in ASEAN and Africa is expected to create rapid growth opportunities for chemical demand [5] Group 3: Export Opportunities - The expansion of production capacity is leading to a significant increase in exports, particularly to emerging markets in ASEAN and Africa, as well as a decline in competitiveness from Europe and Japan, which is resulting in a trend reversal for Chinese chemical exports [4] - The CAGR for exports of styrene, PP, PTA, EVA, PA6, and PVC is projected to exceed 40% from 2020 to 2024, with other monitored products also showing growth rates between 9% and 40% [4]

Core Viewpoint - Sinopec has established a new subsidiary focused on resource recycling, indicating a strategic move towards sustainable practices in the chemical industry [2][3]. Group 1: Company Developments - Sinopec has invested in China Resource Recycling Group and is involved with Changde Technology, a "little giant" in chemical resource utilization that has recently initiated an IPO [2]. - Zhejiang Hengyi Group has signed an investment agreement for a 1 million ton green circular new materials project, focusing on the recycling of waste textiles, with a potential annual recycling volume exceeding 200,000 tons, which could reduce carbon emissions by 300,000 tons [4]. - Jiangsu Sanfangxiang has announced the establishment of a wholly-owned subsidiary with an investment of 100 million RMB, focusing on polyester recycling and developing food-grade polyester chip preparation technology [6]. Group 2: Technological Insights - Hengyi Group employs chemical recycling technology to depolymerize polyester into its monomer components, utilizing their proprietary "Yitaikang" antimony-free polyester technology to minimize environmental impact [4][5]. - Various depolymerization technologies exist, with glycolysis being the most mainstream and accessible for new entrants, offering advantages such as mild reaction conditions, easy product separation, and minimal fiber damage [5]. Group 3: Regulatory Environment - The EU mandates that by 2030, recycled materials must constitute at least 30% of textile products, while China's circular economy development plan aims for a 25% recycled fiber ratio [8]. - New EU packaging regulations require that by 2030, packaging must contain 10-35% recycled materials, emphasizing the shift towards circular economy practices [8]. - The automotive industry is also adapting, with regulations requiring the inclusion of recycled fibers in vehicle interiors to meet mandated recycled content [8]. Group 4: Market Landscape - International players in polyester chemical recycling include Eastman, SK Chemicals, and CARBIOS, while domestic companies like Zhejiang Jiaren New Materials and Hubei Chengfa Technology are also making strides in this sector [9]. - The market for polyester chemical recycling is seeing a surge in startups receiving significant funding, particularly in regions such as Europe, the US, and Asia [9].

Investment Rating - The industry rating is "Outperform" (maintained rating) [5] Core Viewpoints - The petrochemical industry in China is entering a concentrated production period from 2019 to 2025, with average capacity growth for various petrochemical products exceeding 10% per year, leading to intensified competition and declining operating rates/profitability, yet major petrochemical products are still experiencing rapid apparent consumption growth during this phase [1][11][13] - The export value growth remains stable, but the physical volume has significantly increased, with various sub-sectors showing a price-volume trade-off, indicating a price decline of 2% to 7% annually from 2023 to 2025 [2][15][16] - Domestic demand is recovering moderately, with structural highlights in emerging industries and consumption markets, particularly driven by the rapid development of new energy vehicles and wind power generation, which significantly boosts the demand for various chemical new materials [4][26] Summary by Sections 1. Chemical Capacity Expansion and Consumption - From 2019 to 2025E, the average capacity growth for multiple petrochemical products is projected to exceed 10% per year, with specific products like ethylene, PP, and PX seeing even higher growth rates [11][12] - Despite the rapid capacity expansion leading to increased competition and declining profitability, the apparent consumption of major petrochemical products is still growing at a high rate, with annualized growth rates for ethylene, propylene, and butadiene reaching 10.4%, 8.8%, and 7.9% respectively from 2020 to 2024 [13][19] 2. Export Dynamics - The export of chemical products is experiencing a significant expansion, with the CAGR for chemical industrial products reaching 8.9% from 2020 to 2024, and specific petrochemical products like styrene, PP, and PTA seeing export volume growth rates above 40% [22][26] - The shift in export focus towards emerging markets, with ASEAN and Africa showing notable growth in demand for chemical products, is contributing to this trend [25][26] 3. Domestic Demand and Structural Highlights - The development of new energy vehicles and renewable energy sectors is driving substantial demand for new chemical materials, while traditional plastics are also benefiting from the rise of e-commerce and delivery services [4][26] - The overall domestic consumption is recovering, and the factors driving the growth of chemical product demand and exports are expected to remain strong in the medium to long term [4][26]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies [1]. Core Insights - The domestic key refining projects' price spread this week is 2516 CNY/ton, down by 19 CNY/ton (1% decrease) compared to the previous week, while the foreign key refining projects' price spread is 1181 CNY/ton, down by 12 CNY/ton (1% decrease) [2]. - In the polyester sector, the average prices for POY, FDY, and DTY are 6704, 6936, and 7982 CNY/ton respectively, with week-on-week changes of -86, -143, and -39 CNY/ton. The weekly average profits for POY, FDY, and DTY are 79, -33, and 64 CNY/ton respectively [2]. - The operating rate for polyester filament is 91.5%, which is a slight increase of 0.1 percentage points week-on-week [2]. - The downstream weaving machine operating rate is 62.2%, down by 0.2 percentage points week-on-week [2]. - The average price of PX this week is 831.9 USD/ton, down by 3.7 USD/ton, with a price spread compared to crude oil of 338.7 USD/ton, down by 11.6 USD/ton [2]. - The report highlights several listed companies in the refining and polyester sectors, including Hengli Petrochemical, Rongsheng Petrochemical, Hengyi Petrochemical, Tongkun Co., and Xin Fengming [2]. Summary by Sections 1. Refining Sector - Domestic refined oil prices for gasoline, diesel, and aviation kerosene have increased this week [2]. - The average price of Brent crude oil is 67.6 USD/barrel, with a week-on-week increase of 1.6% [9]. 2. Polyester Sector - The average prices for POY, FDY, and DTY are 6704, 6936, and 7982 CNY/ton respectively, with corresponding week-on-week changes [9]. - The inventory days for POY, FDY, and DTY are 20.6, 28.8, and 31.5 days respectively, with slight increases week-on-week [9]. - The operating rates for PX, PTA, and MEG are 85.3%, 75.5%, and 70.9% respectively [9]. 3. Chemical Sector - The report provides insights into the average prices and profit margins for various chemical products, including PX and PTA [9]. - The average price of PX is 831.9 USD/ton, with a decrease in the price spread compared to crude oil [9].

Company Overview - Hengyi Petrochemical Co., Ltd. is located in Xiaoshan District, Hangzhou, Zhejiang Province, and was established on August 13, 1996, with its listing date on March 28, 1997 [1] - The company's main business involves investments in the petrochemical industry, as well as trading in non-ferrous metals, building materials, and electromechanical products [1] Financial Performance - For the first half of 2025, Hengyi Petrochemical reported operating revenue of 55.96 billion yuan, a year-on-year decrease of 13.59%, and a net profit attributable to shareholders of 227 million yuan, down 47.32% year-on-year [2] - The company has cumulatively distributed 5.617 billion yuan in dividends since its A-share listing, with 504 million yuan distributed over the past three years [3] Stock Performance - As of September 16, Hengyi Petrochemical's stock price was 6.46 yuan per share, with a market capitalization of 23.273 billion yuan [1] - The stock has seen a year-to-date increase of 3.61%, a decline of 3.73% over the last five trading days, and increases of 6.78% and 7.67% over the last 20 and 60 days, respectively [1] Shareholder Information - As of June 30, 2025, the number of shareholders was 40,500, a decrease of 4.93% from the previous period, with an average of 90,100 circulating shares per shareholder, an increase of 5.19% [2] - Among the top ten circulating shareholders, Shenwan Hongyuan Securities Co., Ltd. held 68.5794 million shares, a decrease of 2.6709 million shares compared to the previous period [3] Industry Classification - Hengyi Petrochemical is classified under the Shenwan industry category of petroleum and petrochemicals, specifically refining and chemical trade [2] - The company is associated with several concept sectors, including share buybacks, MSCI China, new materials, the Belt and Road Initiative, and margin financing [2]

Group 1 - Hubei Hengyi Green New Materials Co., Ltd. has been established with a registered capital of 100 million yuan [1] - The company's business scope includes synthetic fiber sales, new material technology research and development, and resource recycling technology research and development [1] - Hengyi Green New Materials is wholly owned by Hengyi Petrochemical Co., Ltd. (stock code: 000703) through indirect holdings [1]

Group 1 - The price spread for domestic key refining projects this week is 2579 CNY/ton, an increase of 97 CNY/ton (up 4% week-on-week) [1][2] - The price spread for foreign key refining projects this week is 1197 CNY/ton, an increase of 63 CNY/ton (up 6% week-on-week) [1][2] - The average price of PX this week is 835.6 USD/ton, a decrease of 7.0 USD/ton week-on-week, with a price spread compared to crude oil of 350.3 USD/ton, an increase of 1.7 USD/ton [3] Group 2 - In the polyester sector, the average prices for POY, FDY, and DTY are 6789, 7079, and 8021 CNY/ton respectively, with week-on-week changes of -82, -68, and -29 CNY/ton [2] - The weekly average profits for POY, FDY, and DTY are 108, 34, and 63 CNY/ton respectively, with week-on-week changes of -5, +5, and +31 CNY/ton [2] - The inventory days for POY, FDY, and DTY are 19.3, 27.6, and 31.1 days respectively, with week-on-week changes of +1.9, +1.2, and +1.4 days [2] Group 3 - The operating rate for PX is 85.9%, an increase of 1.2 percentage points week-on-week [3] - The operating rate for long filaments is 91.3%, a decrease of 0.2 percentage points week-on-week [2] - The weaving machine operating rate is 62.4%, unchanged week-on-week [2] Group 4 - Key listed companies in the private refining and polyester filament sector include Hengli Petrochemical, Rongsheng Petrochemical, Hengyi Petrochemical, Tongkun Co., and Xin Fengming [4]

Investment Rating - The report maintains a "Recommended" rating for the chemical industry [1] Core Insights - The chemical industry in China is expected to undergo a revaluation due to anti-involution measures, which may lead to a significant slowdown in global chemical capacity expansion. This shift could enhance the cash flow and dividend yield of Chinese chemical companies, transforming them from cash-consuming entities to profit-generating ones [6][29] - The demand for chromium salts is anticipated to rise significantly due to increased orders for gas turbines and commercial aircraft engines in Europe and the US, leading to a projected shortfall of 250,000 tons by 2028, which is about 23% of the total annual production [6] - The report highlights four key investment opportunities: low-cost expansion, improving industry conditions, new materials, and high dividend yields from state-owned enterprises [7][8] Summary by Sections Recent Performance - The basic chemical sector has shown a performance increase of 51.0% over the past 12 months, compared to 42.5% for the CSI 300 index [4] Investment Recommendations - The report emphasizes the potential for low-cost expansion in major companies such as Wanhua Chemical, Hualu Hengsheng, and others, alongside sectors like tires and fertilizers [7] - It also points out the improving conditions in various segments, including chromium salts, phosphate rock, and agricultural chemicals [8] Key Products Analysis - Recent price increases were noted for acrylic acid and esters, with butyl acrylate priced at 7,600 RMB/ton, reflecting a 3.40% increase [10] - The report also mentions the price of polymer MDI in East China at 15,550 RMB/ton, up by 1.97% [10] Company Tracking and Earnings Forecast - The report provides a detailed earnings forecast for key companies, indicating a positive outlook for many, with several companies rated as "Buy" [30]

1. Report Industry Investment Rating No industry investment rating information is provided in the report. 2. Core Viewpoints The report presents a weekly analysis of the large refining and chemical industry, highlighting that the cost - end support is weak, and filament prices are under pressure. It provides detailed data on various segments such as refining, polyester, and chemicals, as well as the performance of related listed companies [1][3]. 3. Summary According to Relevant Catalogs 3.1 Big Refining Weekly Data Briefing - **6 Major Private Refining Companies' Performance** - **Stock Price Changes**: As of September 12, 2025, the stock prices of private refining companies showed different trends. For example, New Fengming had a weekly increase of 7.1%, while Hengli Petrochemical had a weekly decrease of 1.4% [9]. - **Earnings Forecast**: The report provides the net profit forecasts of these companies from 2024 to 2027. For instance, the expected net profit of Rongsheng Petrochemical in 2025 is 2.616 billion yuan [9]. - **Oil Prices and Refining Spreads** - **International Crude Oil**: The average price of Brent crude oil this week was 66.5 dollars/barrel, a decrease of 1.2 dollars/barrel (-1.8%) compared to last week, and a year - on - year decrease of 6.6%. The average price of WTI crude oil was 62.6 dollars/barrel, a decrease of 1.5 dollars/barrel (-2.4%) compared to last week, and a year - on - year decrease of 7.9% [9]. - **Refining Spreads**: The spread of domestic key large refining projects this week was 2,579.4 yuan/ton, a week - on - week increase of 96.5 yuan/ton (+3.9%); the spread of foreign key large refining projects was 1,197.0 yuan/ton, a week - on - week increase of 62.6 yuan/ton (+5.5%) [9]. - **Polyester Sector** - **Product Prices and Profits**: The average prices of POY, FDY, and DTY this week were 6,789.3 yuan/ton, 7,078.6 yuan/ton, and 8,021.4 yuan/ton respectively, with week - on - week decreases of 82.1 yuan/ton, 67.9 yuan/ton, and 28.6 yuan/ton. The weekly average profits of POY, FDY, and DTY were 107.8 yuan/ton, 34.3 yuan/ton, and 62.8 yuan/ton respectively, with week - on - week changes of - 4.5 yuan/ton, +5.0 yuan/ton, and +31.0 yuan/ton [10]. - **Inventory and Operating Rates**: The inventories of POY, FDY, and DTY were 19.3 days, 27.6 days, and 31.1 days respectively, with week - on - week increases of 1.9 days, 1.2 days, and 1.4 days. The operating rate of filament was 91.3%, a week - on - week decrease of 0.2 pct [10]. - **Refining Sector** - **Domestic Refined Oil**: This week, the prices of domestic gasoline and diesel decreased [3]. - **US Refined Oil**: This week, the prices of US gasoline, diesel, and jet fuel decreased [3]. - **Chemical Sector** - **PX**: The average price of PX this week was 835.6 dollars/ton, a week - on - week decrease of 7.0 dollars/ton. The spread between PX and crude oil was 350.3 dollars/ton, a week - on - week increase of 1.7 dollars/ton. The operating rate of PX was 85.9%, a week - on - week increase of 1.2 pct [3]. 3.2 Big Refining Weekly Report - **Big Refining Index and Project Spread Trends** - **Market Performance of Six Private Big Refining Companies**: The report presents the market performance trends of six private big refining companies from 2020 to 2025, including Hengli Petrochemical, Rongsheng Petrochemical, etc. [16][17] - **Refining Spreads and Oil Prices**: It shows the historical trends of domestic and foreign big refining project spreads and Brent oil prices from 2020 to 2025 [20][22] - **Polyester Sector** - **Raw Material and Product Prices**: It presents the price trends of crude oil, PX, PTA, MEG, etc., as well as the price and profit trends of various polyester products such as POY, FDY, DTY, polyester staple fiber, and polyester bottle chips from 2020 to 2025 [24][26][38] - **Operating Rates and Inventories**: It shows the operating rate trends of PX, PTA, MEG, filament, and polyester staple fiber from 2020 to 2025, as well as the inventory trends of PTA, filament, and polyester staple fiber [33][56][76] - **Sales and Production Rates**: It presents the sales and production rate trends of filament and polyester staple fiber in the Jiangsu - Zhejiang region from 2020 to 2025 [49][72] - **Refining Sector** - **Domestic Refined Oil**: It shows the price trends of domestic gasoline, diesel, and jet fuel and their spreads with crude oil from 2020 to 2025 [85][94] - **US Refined Oil**: It shows the price trends of US gasoline, diesel, and jet fuel and their spreads with crude oil from 2020 to 2025 [99][107] - **European Refined Oil**: It shows the price trends of European gasoline, diesel, and jet fuel and their spreads with crude oil from 2020 to 2025 [112][121] - **Singapore Refined Oil**: It shows the price trends of Singapore gasoline, diesel, and jet fuel and their spreads with crude oil from 2020 to 2025 [126][134] - **Chemical Sector** - **Chemical Product Prices**: It shows the price trends of various chemical products such as polyethylene LLDPE, homopolymerized polypropylene, EVA, styrene, acrylonitrile, PC, MMA, etc., and their spreads with crude oil from 2020 to 2025 [140][148]