Bank of China Securities·2025-05-20 05:38Investment Rating - The report rates the chemical industry as "Outperform the Market" [1] Core Views - The industry is significantly influenced by tariff-related policies and fluctuations in crude oil prices, suggesting a balanced allocation strategy. Focus is recommended on companies in electronic materials with increasing self-sufficiency and energy firms with stable dividend policies [1][10] - The report highlights the potential for sustained high oil prices, ongoing high demand in the oil and gas extraction sector, and the rapid development of downstream industries, particularly in new materials [10] Industry Dynamics - In the week of May 12-18, 2025, among 100 tracked chemical products, 43 saw price increases, 32 saw declines, and 25 remained stable. The average price of WTI crude oil increased by 2.41% to $62.49 per barrel, while NYMEX natural gas prices fell by 12.37% to $3.33 per mmbtu [9][10] - MDI prices rose, with the average price for polymer MDI at 16,500 CNY/ton, an increase of 8.55% week-on-week. The average price for pure MDI was 17,800 CNY/ton, up 2.89% [10] - Polyester staple fiber prices increased to 6,710 CNY/ton, a rise of 5.17% week-on-week, with production expected to be around 167,000 tons [10] Investment Recommendations - The report suggests a focus on companies with strong dividend policies and those involved in electronic materials, particularly in semiconductor and OLED materials, as well as new energy materials [10] - Recommended stocks include China Petroleum, China Oilfield Services, and several technology firms such as Anji Technology and Yake Technology [10] - The report emphasizes the importance of policy support for demand recovery and suggests monitoring leading companies with high earnings elasticity [10] Key Metrics - As of May 18, 2025, the price-to-earnings ratio for the SW basic chemicals index is 22.09, at the 61.89% historical percentile, while the price-to-book ratio is 1.80, at the 11.72% historical percentile [10]