HTSC·2026-01-04 12:36Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [2] Core Views - The report indicates that the supply and demand for polycarbonate (PC) are gradually improving, suggesting that the industry may enter a prosperous cycle [6][8] - The demand for PC is expected to grow significantly due to the increasing penetration of downstream applications such as electric vehicles, electronics, and optical materials [9] - The report highlights that the domestic production capacity of PC has increased from 12% in 2017 to 49% by 2025, indicating a significant shift towards domestic production [6][9] Summary by Sections Investment Recommendations - Recommended stocks include: - Wanhua Chemical (600309 CH) with a target price of 85.20 and a "Buy" rating - Luxi Chemical (000830 CH) with a target price of 17.85 and a "Buy" rating - Hengli Petrochemical (600346 CH) with a target price of 24.48 and an "Overweight" rating - Rongsheng Petrochemical (002493 CH) with a target price of 12.48 and an "Overweight" rating [5][34] Supply and Demand Dynamics - The report forecasts that the industry operating rates will improve to 87% in 2025, 94% in 2026, and 95% in 2027, driven by limited new capacity additions and ongoing demand growth [10] - The overall demand for PC is projected to reach 360 million tons in 2024, with a compound annual growth rate (CAGR) of 11% from 2018 to 2024 [9][32] Competitive Landscape - The competitive landscape for PC is relatively favorable, with major production concentrated among leading chemical companies that possess the necessary technical qualifications [6] - The report notes that the market concentration has decreased from 80% in 2017 to 62% globally by 2025, while domestic concentration is expected to be 66% [6] Price Trends - As of December 30, 2024, PC prices have increased by 3% from the low point in September 2024, indicating a recovery in the market [10] - The report highlights that the price of PC is expected to continue to rise as supply and demand improve [10]