Minsheng Securities·2025-07-28 10:12Investment Rating - The report recommends investment in the chemical industry, particularly in specific sectors such as bottle-grade PET and sucralose, highlighting potential for profit recovery under the "anti-involution" policy [2][3][5]. Core Insights - The chemical industry is experiencing significant price declines, with the Producer Price Index (PPI) showing a year-on-year decrease of 3.6% as of June, marking the lowest since August 2023 [1][9]. - The report emphasizes the need for "anti-involution" measures to enhance profitability across various chemical sub-industries, driven by increased R&D investment and a focus on high-quality development [1][21]. - The supply-side adjustments in multiple chemical sub-industries are expected to optimize the industry structure, with specific sectors like polyester filament and MDI showing promising demand trends [2][3]. Summary by Sections PPI and Industry Trends - The PPI for chemical raw materials and products has seen significant declines, necessitating "anti-involution" strategies to stabilize the industry [1][9]. - The ongoing construction projects in the chemical sector are projected to reach a total investment of 388.4 billion yuan in 2024, reflecting a 12.26% year-on-year increase [15]. Sub-Industry Analysis - Polyester Filament: The supply growth is expected to slow down due to "anti-involution" policies, which may improve profitability [2][34]. - PC Industry: The domestic PC industry is witnessing a shift towards import substitution, with limited new capacity expected in 2025 [3][45]. - MDI: The MDI sector is benefiting from strong domestic and international demand, with prices expected to remain favorable [4][55]. - Bottle-grade PET: This sector is crucial for beverage packaging, with a significant portion of production dedicated to food and drink applications [5][71]. - Silicone: The industry is expected to see a recovery in profitability as supply-demand balances improve [6][24]. - Titanium Dioxide: The industry is experiencing a slowdown in new capacity due to policy guidance and profit pressures [6][7]. - Sucralose: The demand is growing strongly, with new applications emerging [8][30]. Investment Recommendations - The report suggests focusing on sectors with substantial progress in "anti-involution," such as the bottle-grade PET industry, recommending Wan Kai New Materials as a key investment target [3][90]. - For the sucralose sector, Jin He Industrial is highlighted as a leading company to watch [3][90].