HTSC·2025-05-08 02:25Investment Rating - The industry investment rating for basic chemicals and oil & gas is maintained at "Overweight" [6] Core Viewpoints - The industry is experiencing a bottoming phase in profitability for bulk chemicals in 2024, with signs of recovery in downstream demand beginning in Q1 2025 [2][19] - The oil price has been under pressure due to geopolitical tensions and OPEC+ production cuts, leading to a decline in profitability across the oil and gas value chain [10][14] - The overall revenue for the basic chemicals and oil & gas sector in 2024 was 1,031.71 billion, with a net profit of 49.85 billion, reflecting a year-on-year decline of 1% and 0.8% respectively [12][18] Summary by Sections 2024 Annual Overview - The oil and gas sector remains relatively strong, while bulk cyclical products are facing profitability challenges [3][14] - The chemical industry is waiting for a supply-demand turning point, with 21 out of 35 sub-industries showing positive performance in A-shares [14][16] Q1 2025 Performance - In Q1 2025, the oil price decline has led to a decrease in profitability for the oil and gas sector, while downstream products are showing initial signs of recovery [19][20] - The revenue for Q1 2025 was 25,157 billion, with a net profit of 1,426 billion, indicating a year-on-year decline of 4% and 3% respectively, but a quarter-on-quarter increase of 2% and 78% [12][23] Industry Outlook - The second half of 2025 is expected to see an upward trend, driven by improved domestic and external demand, as well as capital expenditure recovery [5][10] - Recommended stocks include Meihua Biological, Xinghuo Technology, and others, which are expected to benefit from the recovery in the chemical industry [8][5]