EBSCN·2025-06-11 07:25Investment Rating - The report maintains an "Overweight" rating for the chemical industry, particularly focusing on nylon and specialty nylon supply chains [5]. Core Insights - Recent accidents in chemical enterprises have disrupted the supply of chemical products such as caprolactam. A significant incident occurred on June 8, 2025, at China Pingmei Shenma Group's nylon technology company, affecting its production capabilities [1]. - The report emphasizes the robust demand for nylon, which is widely used in various applications, with notable consumption increases in nylon 6 and nylon 66, projected to grow by 22.2% and 41.2% respectively in 2024 [2]. - The report suggests monitoring companies involved in the nylon and specialty nylon sectors, including PolyOne and Taihua New Materials, as well as caprolactam producers like Luxi Chemical and Hualu Hengsheng [3]. Summary by Sections Chemical Industry Overview - The report highlights the recent frequency of accidents in the chemical sector, leading to stricter regulations on high-risk chemical reactions, which may impact supply chains [1]. - The current domestic caprolactam production capacity stands at 7.1 million tons per year, with the recent accident potentially affecting 5.6% of the supply [3]. Nylon and Specialty Nylon - Nylon, known for its excellent mechanical strength and wear resistance, has a significant market presence, with nylon 6 and nylon 66 accounting for approximately 90% of total consumption [2]. - The report identifies key players in the specialty nylon market, including DuPont and Arkema, while noting the trend towards domestic substitution in production [2]. Investment Recommendations - The report recommends focusing on undervalued, high-dividend companies in the oil and gas sector, as well as material companies benefiting from domestic substitution trends [3]. - Specific companies to watch include China Petroleum, China Petrochemical, and Wanhu Chemical, among others [3].