Core Viewpoint - The chemical industry is currently at the bottom of its cycle, with prices and spreads still stabilizing, while demand is expected to improve with government policies aimed at economic recovery [1] Group 1: Industry Overview - The chemical industry is experiencing a bottoming phase, with most chemical prices and spreads still in a stabilization process [1] - Domestic capacity is gradually being released, leading to a significant slowdown in supply growth [1] - The report suggests focusing on sectors with relatively certain demand, such as agricultural chemicals and the civil explosives industry benefiting from western development [1] Group 2: Key Recommendations - Emphasis on long-term value of leading companies in the chemical sector, as core assets are expected to see profit and valuation recovery [1] - Recommended leading companies include Wanhua Chemical, Hualu Hengsheng, Huafeng Chemical, Longbai Group, Yangnong Chemical, New Hecheng, Satellite Chemical, Baofeng Energy, Hengli Petrochemical, and Rongsheng Petrochemical [1] Group 3: Subsector Insights - Agricultural chemicals show rigid demand, with steady growth in grain planting area and recovery in compound fertilizer volume and profit [2] - The civil explosives industry is driven by domestic demand, particularly in regions like Xinjiang and Tibet, with increasing concentration benefiting leading companies [2] Group 4: New Material Opportunities - The domestic replacement of chemical new materials is accelerating due to trade tariffs and anti-monopoly pressures [3] - Key areas include adsorption separation materials, lubricating oil components, OLED materials, and high-end photoresists, with specific companies recommended for investment [3] Group 5: Price Recovery Potential - Certain sectors may see profit improvements as supply growth slows and policy constraints are anticipated, particularly in organic silicon and spandex industries [4] - The petrochemical sector may present strategic opportunities following a potential bottoming of oil prices, with recommendations for strategic layouts in refining and downstream polyester filament industries [4]

Group 1: M&A Activity Overview - From May 12 to May 18, there were a total of 86 M&A events involving listed companies, with 33 classified as significant M&A transactions[8] - Out of the total M&A events, 19 were completed, including 1 significant M&A transaction[8] Group 2: Policy Updates - The China Securities Regulatory Commission (CSRC) revised the "Management Measures for Major Asset Restructuring of Listed Companies," emphasizing a phased payment mechanism for restructuring shares and simplifying the review process[6] - The new rules allow for a 48-month validity period for registration decisions on phased share issuances for asset purchases[21] Group 3: Encouragement for Private Equity - The revised measures encourage private equity funds to participate in M&A activities, with a reduction in lock-up periods for certain transactions[21] - For private equity funds with a 48-month investment period, the lock-up period for third-party transactions is reduced from 12 months to 6 months[21] Group 4: Market Performance - During the week of May 12 to May 18, the restructuring index outperformed the Wind All A index by 1.19%[16] - The rolling 20-day return difference between the restructuring index and the Wind All A index remained near the zero axis, indicating stable performance[16] Group 5: Failed M&A Events - There were 5 failed M&A events during the week, involving companies such as Xinkeng Intelligent and Aisen Co., with total transaction values including 600,000 CNY for Huafeng Chemical's failed acquisition[13]

Core Viewpoint - The company has decided to terminate the issuance of shares and cash payment for asset acquisition and related transactions, as approved in the recent board and supervisory meetings [1]. Group 1 - The company held the ninth board meeting and the ninth supervisory meeting on May 13, 2025, where the decision to terminate the transaction was made [1]. - The termination of the transaction will be communicated to investors through an investor briefing scheduled for May 21, 2025, from 15:30 to 16:30 [1][2]. - The company will utilize an online format for the investor briefing, allowing for interactive communication regarding the termination of the transaction [2]. Group 2 - The company will collect questions from investors in advance to enhance the effectiveness of the communication during the briefing [2]. - Key personnel, including the chairman, board secretary, representatives from the transaction parties, and independent financial advisors, will attend the investor briefing [2].

Investment Rating - The report maintains a "Recommended" rating for the chemical industry [1]. Core Insights - The report highlights the potential revaluation of phosphate rock value due to ongoing supply-demand tensions, with increasing demand for phosphate fertilizers and lithium iron phosphate batteries [6][4]. - The chemical industry is expected to enter a restocking cycle in 2025, driven by low inventory levels and improving profitability among leading chemical companies [5][27]. - The report emphasizes the expansion of phosphate production capacity by Batian Co., which is set to increase its phosphate rock extraction capacity to 2 million tons per year [4][6]. Summary by Sections Core Target Tracking - The report tracks key companies in the chemical sector, including Batian Co., which is expanding its phosphate production capacity significantly [4][6]. - It also notes the performance of various chemical products, with a focus on price increases for butadiene and polyester filament due to favorable market conditions [10][14]. Market Observation - The chemical sector has shown a relative performance of 6.7% over the past month, outperforming the CSI 300 index [2]. - The report indicates that the chemical industry is experiencing a recovery phase, with several companies poised for growth due to favorable market dynamics [5][27]. Data Tracking - The report provides detailed tracking of price movements for key chemical products, including butadiene, polyester filament, and various fertilizers, indicating a general upward trend in prices [10][12][17]. - It also highlights the current chemical industry sentiment index at 93.10, reflecting a positive outlook for the sector [6][33]. Investment Recommendations - The report suggests focusing on companies with low-cost expansion capabilities, such as Wanhua Chemical and various tire manufacturers, as well as those benefiting from rising product prices [5][7]. - It emphasizes the importance of high dividend yield companies in the chemical sector, particularly state-owned enterprises with stable financials [8][29].

Core Viewpoint - The company has decided to terminate the issuance of shares and cash payment for asset acquisition and related party transactions, as approved in the board meetings held on May 13, 2025 [1][2]. Group 1 - The company will hold an investor briefing on May 21, 2025, to discuss the termination of the transaction and engage with investors [1][2]. - The briefing will be conducted remotely, allowing investors to participate through the "East Money" investor interaction platform [2]. - The company aims to enhance communication by collecting questions from investors in advance and addressing common concerns during the briefing [2]. Group 2 - Attendees of the investor briefing will include the company's chairman, board secretary, representatives from the transaction counterpart, the target company, and independent financial advisors [2]. - The company encourages active participation from investors to gather opinions and suggestions [2].

本公司及董事会全体成员保证信息披露的内容真实、准确、完整，没 有虚假记录、误导性陈述或重大遗漏。 华峰化学股份有限公司（以下简称"公司"）于 2025 年 5 月 13 日召开第九 届董事会第十次会议、第九届监事会第九次会议，审议通过了《关于终止华峰 化学股份有限公司发行股份及支付现金购买资产暨关联交易事项的议案》，同意 公司终止发行股份及支付现金购买资产暨关联交易事项（以下简称"本次交 易"或"本次重组"）。具体内容详见公司登载于 2025 年 5 月 14 日巨潮资讯网 （http://www.cninfo.com.cn）的《华峰化学股份有限公司关于终止发行股份 及支付现金购买资产暨关联交易的公告》。 为加强与投资者的沟通和交流，根据深圳证券交易所的相关规定，公司将 于 2025 年 5 月 21 日（星期三）15:30—16:30 召开关于终止发行股份及支付现 金购买资产暨关联交易事项的投资者说明会（以下简称"说明会"或"投资者 说明会"），就终止本次交易的相关情况与投资者进行互动交流和沟通。 本次说明会将采用网络远程方式举行，届时公司将就终止本次交易的相关 情况，与投资者进行互动交流和沟通，就投资者关 ...

Core Viewpoint - Huafeng Chemical's asset restructuring plan has failed after the acquisition of two subsidiaries was not approved by shareholders, leading to the termination of a 6 billion yuan transaction [2][3][4]. Group 1: Acquisition Details - The company planned to acquire 100% equity of Huafeng Synthetic Resin and Huafeng Thermoplastic for a total price of 6 billion yuan, with valuations showing an increase of over 470% [2][3]. - The assessment value of Huafeng Synthetic Resin was 4.045 billion yuan, reflecting a 506.96% increase compared to the book value of 666 million yuan, while Huafeng Thermoplastic was valued at 1.963 billion yuan, with a 478.49% increase [3][4]. - The acquisition was intended to enhance the company's product line and improve its risk management and profitability [4]. Group 2: Shareholder Voting Outcome - The acquisition was halted due to insufficient votes, as the proposal did not receive the required two-thirds majority from shareholders at the meeting [4][5]. - The decision to terminate the transaction was made after careful consideration and discussions among the involved parties [4]. Group 3: Current Business Status - Despite the termination of the acquisition, the company's operational activities remain unaffected, and there are no adverse impacts on the interests of the company and minority shareholders [5]. - The company plans to pause the acquisition and will seek further opinions before discussing a revised transaction plan, potentially increasing the cash payment ratio [5]. Group 4: Financial Performance - Huafeng Chemical has experienced a decline in net profit for three consecutive years, with figures dropping from 28.44 billion yuan in 2022 to 22.20 billion yuan in 2024 [6]. - Revenue figures for the same period were 258.84 billion yuan, 262.98 billion yuan, and 269.31 billion yuan, showing modest growth rates [6]. - The company reported a 5.15% decline in revenue and a 26.21% drop in net profit in the first quarter of 2025 [6]. Group 5: Industry Context - The decline in performance is attributed to increased production capacity in the polyurethane industry and a significant drop in product prices, with the average price of spandex falling by 17.11% in 2024 [6][7]. - The gross margin of Huafeng Chemical has decreased from 38.70% in 2021 to 13.83% in 2024, further dropping to 13.47% in the first quarter of 2025 [7]. - The industry is undergoing a transformation, with a focus on improving concentration and potential growth in differentiated applications, particularly in sectors like healthcare and automotive interiors [7].

Core Viewpoint - Several listed companies have recently announced the termination of acquisitions, with Huafeng Chemical's termination being notably due to the lack of approval from minority shareholders [1][2] Group 1: Acquisition Details - Huafeng Chemical planned to acquire 100% equity of Zhejiang Huafeng Synthetic Resin Co., Ltd. and Zhejiang Huafeng Thermoplastic Polyurethane Co., Ltd. through a combination of issuing shares and cash payments [3] - The acquisition was valued at 40.4 billion yuan for Huafeng Synthetic Resin and 19.6 billion yuan for Huafeng Thermoplastic, with the deal constituting a related party transaction due to the involvement of the controlling shareholder [3][7] - The board and supervisory committee approved the restructuring plan, but the shareholder meeting failed to pass the necessary resolutions due to the absence of votes from related shareholders [3][4] Group 2: Voting Results - The voting results showed that only 1.42 billion shares (47.04%) supported the proposal, while 301.99 million shares (9.98%) opposed it, and 1.3 billion shares (42.98%) abstained, failing to meet the required two-thirds majority [4] - Among minority shareholders, 1.28 billion shares (44.46%) were in favor, while 301.99 million shares (10.47%) opposed, and 1.3 billion shares (45.08%) abstained, indicating a significant level of abstention [5][6] Group 3: Financial Performance and Concerns - The target companies showed strong financial performance in 2024, with Huafeng Synthetic Resin generating 3.42 billion yuan in net profit and Huafeng Thermoplastic generating 1.63 billion yuan, both reflecting growth from the previous year [7] - However, the high growth rates and substantial dividends raised concerns among investors, as Huafeng Synthetic Resin distributed 1.556 billion yuan and Huafeng Thermoplastic distributed 460 million yuan in dividends, totaling 2 billion yuan [8] - The significant dividend payouts led to increased debt levels, with Huafeng Synthetic Resin's debt-to-asset ratio rising from 60.48% to 75.75% and Huafeng Thermoplastic's from 71.44% to 85.21% [8] Group 4: Shareholder Concerns - The distribution of dividends raised questions about the fairness of asset valuations and potential conflicts of interest, as the funds primarily benefited the controlling shareholder's family [9][10] - Despite the failed acquisition, Huafeng Chemical expressed intentions to continue discussions with the transaction parties and fulfill commitments regarding the injection of assets into the listed company [10]

Core Viewpoint - The rejection of Huafeng Chemical's restructuring proposal by minority shareholders highlights the significance of their participation in corporate governance, indicating that minority investors do have a voice and can influence major decisions [1][2][3] Group 1: Restructuring Proposal Controversy - Huafeng Chemical's restructuring plan faced scrutiny due to the high valuation increases of the target assets, with Huafeng Synthetic Resin and Huafeng Thermoplastics seeing appraisal increases of 506.96% and 478.49% respectively [1] - Prior to the transaction, both companies engaged in a significant dividend payout of approximately 2 billion yuan, leading to a surge in their debt ratios, with Huafeng Synthetic Resin's debt ratio rising from 60.48% to 75.75% and Huafeng Thermoplastics from 71.44% to 85.21% [1] Group 2: Minority Shareholder Actions - Approximately 130 million shares were abstained from voting, accounting for 42.98% of the effective voting rights, indicating a strong skepticism among minority shareholders regarding the transaction's fairness [1] - Among minority shareholders, only 44.46% voted in favor of the proposal, while abstentions made up 45.08%, reflecting a heightened vigilance against potential benefit transfers [1][2] Group 3: Implications for Corporate Governance - The collective action of minority shareholders in rejecting the related-party transaction signifies a growing awareness of their rights, as they increasingly utilize their voting power to influence significant corporate decisions [2] - Enhanced transparency in financial disclosures and the availability of professional evaluation reports have provided minority shareholders with the necessary information to question the rationale behind transactions [2] - Regulatory frameworks have strengthened minority shareholders' voting rights, allowing for measures such as avoiding voting on related-party transactions and implementing classified voting [2][3] Group 4: Recommendations for Major Shareholders - Major shareholders must acknowledge the status of investors and respect the interests of minority shareholders, avoiding self-serving practices in related-party transactions [2] - Companies should improve communication with minority shareholders, as Huafeng Chemical's failure to adequately explain the rationale behind the transaction led to its rejection [2] Group 5: Regulatory Considerations - Regulatory bodies are encouraged to enhance protections for minority shareholders, particularly concerning high-premium acquisitions and sudden dividend payouts, by requiring detailed justifications from companies [3] - The failure of Huafeng Chemical's restructuring proposal illustrates that under modern shareholder meeting rules, the voices of minority shareholders can significantly impact major decisions [3]

Core Viewpoint - Huafeng Chemical's profitability continues to decline, and its attempt to expand through acquisitions has failed [1][2] Group 1: Acquisition Attempt - Huafeng Chemical announced the termination of its plan to acquire 100% of Huafeng Synthetic Resin and Huafeng Thermoplastic Polyurethane due to lack of shareholder approval [2][3] - The total consideration for the failed transaction was 6 billion yuan in cash and 54 billion yuan in shares, with a proposed issuance of 879 million shares [2] - The valuation of Huafeng Synthetic Resin showed a 506.96% increase, while Huafeng Thermoplastic had a 478.49% increase compared to their book values [3] Group 2: Financial Performance - From 2022 to 2024, Huafeng Chemical's revenue was 258.84 billion yuan, 262.98 billion yuan, and 269.31 billion yuan, with year-on-year changes of -8.75%, 1.60%, and 2.41% respectively [6] - Net profit for the same period was 28.44 billion yuan, 24.78 billion yuan, and 22.20 billion yuan, reflecting a decline of 64.17%, 12.85%, and 10.43% respectively [6] - In Q1 2025, the company reported revenue of 63.14 billion yuan, down 5.15% year-on-year, and net profit of 5.04 billion yuan, down 26.21% [8] Group 3: Industry Context - The spandex industry has transitioned from a peak to a cyclical low, facing oversupply and declining raw material prices, leading to continuous price drops [8][9] - The average price of domestic spandex 40D in 2024 was 26,417.21 yuan per ton, a year-on-year decrease of approximately 17.11% [9] - Despite the challenges, Huafeng Chemical plans to continue expanding its production capacity, with an additional 150,000 tons of spandex expected to be gradually put into production starting in 2025 [9]