Investment Rating - Investment rating: Positive (maintained) [1] Core Viewpoints - The BOPET film industry is experiencing high domestic demand growth, but currently faces low prices and profit pressures. The industry is characterized by an oversupply of low-end products and a shortage of high-end products, leading to a structural imbalance [5][16][18] - The "China BOPET Industry Self-Discipline Initiative" aims to optimize the industry structure and improve profitability by promoting fair market conditions and reducing ineffective supply [19][6] - The market is gradually concentrating resources towards companies with cost and technological advantages, with a positive outlook for the development of high-end polyester film products [6][5] Summary by Sections BOPET Film Overview - BOPET films are widely used in packaging, optical displays, electrical applications, and photovoltaic new energy sectors. The domestic BOPET industry has seen rapid growth in capacity and consumption from 2014 to 2024, but consumption growth has not kept pace with production and capacity growth, leading to an oversupply situation [5][12][28] Supply and Demand Analysis - Supply: From 2014 to 2024, domestic BOPET capacity expanded from 2.47 million tons to 6.95 million tons, with a CAGR of 10.9%. The industry currently has a capacity of 6.482 million tons per year, with the top 10 companies accounting for 63% of total capacity [20][21] - Demand: During the same period, apparent consumption increased from 1.71 million tons to 4.15 million tons, with a CAGR of 9.3%. The packaging and printing sector accounted for 45.8% of demand in 2024 [28][30] - Imports and Exports: China has become a net exporter of BOPET since 2015, but still imports 200,000 to 300,000 tons annually, indicating reliance on high-end BOPET products [32][36] Price and Profitability - BOPET prices have been under pressure since 2022 due to supply-demand imbalances, with prices reaching historical lows in 2024. The average price in early 2025 was 8,091 RMB per ton, showing a slight year-on-year increase [41][40] - The industry has faced continuous profit pressure since 2022, with many companies transitioning from profit to loss in 2024. However, Q1 2025 showed signs of reduced losses for most companies [6][19] Investment Recommendations - Recommended stocks include Dongcai Technology, Hengli Petrochemical, and Rongsheng Petrochemical, with beneficiaries including Dousheng New Materials and Yuxing Co., Ltd. [6]