Bank of China Securities·2026-03-01 08:46Investment Rating - The report rates the chemical industry as "Outperform" [2] Core Insights - The report highlights the impact of geopolitical events on oil and certain petrochemical product prices, the focus on undervalued leading companies in the industry, and the price increase trends in certain sub-industries under the backdrop of "anti-involution" [2][4] - It emphasizes the strong downstream demand and the increasing importance of self-sufficiency in electronic materials and certain new energy materials companies [4] Summary by Sections Industry Dynamics - As of February 27, the TTM price-to-earnings ratio for the SW basic chemicals sector is 30.87, at the 87.20% historical percentile, while the price-to-book ratio is 2.78, at the 81.65% historical percentile [4] - The SW oil and petrochemical sector has a TTM price-to-earnings ratio of 15.58, at the 47.72% historical percentile, and a price-to-book ratio of 1.51, at the 52.34% historical percentile [4] Investment Recommendations - The report suggests focusing on the following in March: the impact of geopolitical events on oil and petrochemical prices, undervalued leading companies, price increases in certain sub-industries due to "anti-involution," and companies in electronic materials and new energy materials benefiting from strong downstream demand [4][11] - Long-term investment recommendations include traditional chemical leaders with resilient operations, sub-industries with improving supply-demand dynamics, and companies in the new materials sector [4][11] Price Trends - The report notes that 43 out of 100 tracked chemical products saw price increases, with 58% of products experiencing month-over-month price rises [11][35] - Specific price increases include TDI, which rose to 15,081 CNY/ton, a 3.47% increase from the previous week and a 20.65% increase year-on-year [38] - Yellow phosphorus prices increased to 24,370 CNY/ton, up 4.90% from the previous week and 6.28% year-on-year [39]