Guohai Securities·2025-06-15 14:03Investment Rating - The report maintains a "Recommended" rating for the chemical industry [1] Core Views - The Israel-Iran conflict is expected to impact the Chinese chemical industry through increased demand for military materials and agricultural products, benefiting companies involved in metal chromium, nitrocellulose, carbon fiber, and rubber materials [4][5] - Supply-side constraints are anticipated due to potential disruptions in oil and gas supplies from Iran, affecting various chemical products [4] - The report highlights the rising prices of chromium salts and the potential for increased profitability in the sector, particularly for companies like Zhenhua Co. [5][6] Summary by Sections Recent Trends - The basic chemical sector has shown a performance increase of 8.8% over the past 12 months, outperforming the CSI 300 index, which has seen a 9.6% increase [3] Key Opportunities - The report identifies four main investment opportunities: 1. Low-cost expansion in companies such as Wanhua Chemical and Satellite Chemical [9] 2. Improved industry sentiment for chromium salts and phosphate rock [9] 3. New materials with high growth potential, particularly in electronic chemicals and aerospace materials [10] 4. High dividend yields from state-owned enterprises in the chemical sector [10] Company Focus - Zhenhua Co. is highlighted for its significant production capacity in chromium salts and its ability to adapt to market demands, with a projected production of 260,000 tons of chromium salt in 2024 [6][31] - Baitian Co. is noted for its phosphate rock production capacity expansion, which is expected to enhance its market position [7][31] Market Dynamics - The report discusses the ongoing tight supply-demand situation for phosphate rock, with existing capacities facing delays and increasing demand from lithium iron phosphate battery projects [7] - The report also mentions the impact of recent chemical safety incidents on industry capacity and regulatory pressures, which may accelerate the phase-out of less compliant operations [8]