EBSCN·2025-04-28 15:30Investment Rating - The report maintains an "Overweight" rating for the chemical industry, specifically for the petrochemical and transportation sectors [4]. Core Views - The macroeconomic recovery in China, driven by various government measures to stabilize employment and promote economic growth, is expected to positively impact the chemical industry, leading to a rebound in profitability for chemical products in 2025 [1][2]. - The report anticipates a recovery in cyclical sectors such as refining, MDI (Methylene Diphenyl Diisocyanate), agricultural chemicals, and vitamins, with overall chemical prices expected to rise from their current lows [2]. Summary by Sections 1. Industry Overview - The Chinese government has introduced several measures to stabilize employment and promote economic growth, which are expected to support the chemical industry [1]. - In Q1 2025, China's GDP grew by 5.4% year-on-year, surpassing the growth rate of 5% for the entire year of 2024 [1]. 2. Chemical Product Price Trends - Refining: Lower energy prices are expected to ease cost pressures for downstream refining companies, with a positive outlook for large refining and coal chemical enterprises [2]. - MDI: Major companies have increased MDI prices by €175 per ton in Europe and $100-$300 per ton in other regions, although the average industry price continues to decline [2]. - Agricultural Chemicals: Potash prices have rebounded due to seasonal demand and tariffs, while phosphate prices are also showing signs of recovery [2]. - Vitamins: Supply for certain vitamins is shifting towards China, with prices for Vitamin D3 rising significantly [2]. 3. Investment Recommendations - The report suggests focusing on undervalued, high-dividend companies in the oil sector, including China National Petroleum, Sinopec, and CNOOC [3]. - It also highlights opportunities in domestic material companies benefiting from the trend of domestic substitution, as well as in the agricultural chemicals and private refining sectors [3]. - Companies in the vitamin and methionine sectors are also recommended for investment [3].