Core Viewpoint - Shandong Province is the only region in China that encompasses all 41 industrial categories, making it a unique industrial ecosystem with significant potential for investment and development [6][8]. Group 1: Industrial Structure and Chains - Shandong has established 19 flagship industrial chains and 67 sub-industrial chains, supported by over a hundred "chain master" enterprises [3][12]. - The province is home to 1,163 national specialized and innovative "little giant" enterprises and 18,072 specialized and innovative small and medium-sized enterprises, many of which serve as "chain core" enterprises [3][28]. - The "chain leader system" promotes collaboration between government and enterprises to foster industrial development and supply chain synergy, with a focus on nurturing emerging "technology gazelles" [3][10]. Group 2: Key Enterprises and Their Roles - Wanhua Chemical has evolved from a small synthetic leather manufacturer to the world's largest polyurethane producer, establishing a complete industrial chain [14][15]. - Weichai Group transformed from a single engine manufacturer to a multi-chain leader, creating a unique "golden industrial chain" in the global heavy truck market [17][18]. - Jinan Second Machine Tool Group plays a crucial role in the automotive manufacturing supply chain, providing over 80% of the domestic market for stamping equipment [24][26]. Group 3: Emerging Technologies and Innovations - Tianyue Advanced Technology has become a key player in the semiconductor industry, achieving significant milestones in silicon carbide substrate production and aiming for a Hong Kong Stock Exchange listing [28][29]. - Haomai Technology is the largest tire mold manufacturer globally, with a market share exceeding 30% in 2023, showcasing the importance of specialized manufacturing capabilities [30][33]. - AIN Semiconductor Technology is working on domestic ion implantation machines, addressing a critical gap in China's semiconductor manufacturing capabilities [39][40]. Group 4: Future Prospects and Developments - Shandong is positioning itself as a leader in commercial aerospace, with plans to develop 300 key aerospace enterprises by 2030 [43]. - The province's "chain leader system" is undergoing further optimization, with new plans to enhance industrial chain development [44][45].

Core Viewpoint - The third China International Supply Chain Promotion Expo will be held in Beijing from July 16 to 20, 2025, with Thailand as the guest country and Shandong and Guangdong as guest provinces, showcasing 651 enterprises from 75 countries and regions [2] Group 1: Shandong's Industrial Strength - Shandong is the only province in China that encompasses all 41 industrial categories defined by the United Nations, making it a unique "industrial full-spectrum sample" globally [2] - The province has established 19 iconic industrial chains and 67 sub-industrial chains, covering traditional, emerging, and future industries [3][5] - Shandong is home to several "trillion-level" industrial clusters, including software, food, biomedicine, and petrochemicals, with significant production in various sectors such as commercial vehicles and photovoltaic installations [3] Group 2: Chain Leaders and Key Players - Shandong's industrial ecosystem has led to the emergence of numerous "chain leaders" and "chain core" enterprises, which play crucial roles in their respective supply chains [5][10] - Wanhu Chemical has developed a complete polyurethane industrial chain, becoming the largest producer globally, while Weichai Group has transformed from a single engine manufacturer to a leader in multiple industrial chains [6][8] - Jinan Second Machine Tool Group is a key player in the machine tool industry, providing essential equipment for major automotive manufacturers, with over 80% market share domestically [11] Group 3: Emerging Technologies and Future Prospects - Shandong is focusing on nurturing "technology gazelles," which are innovative companies at the forefront of emerging industries, such as Goer Technology in the metaverse sector [19][20] - The province is also advancing in the semiconductor industry, with companies like Ain Semiconductor Technology working on critical equipment for chip manufacturing [21] - The commercial aerospace sector is being developed as a new growth engine, with plans to establish 300 key enterprises by 2030 [22]

Market Overview - The Shanghai Composite Index rose by 0.50% on July 18, with 22 out of 28 sectors experiencing gains. The top-performing sectors were non-ferrous metals and basic chemicals, with increases of 2.10% and 1.36% respectively. The sectors that declined were media and electronics, with decreases of 0.98% and 0.49% respectively [1] Fund Flow Analysis - The net outflow of capital from the two markets was 22.987 billion yuan. Ten sectors saw net inflows, with the non-ferrous metals sector leading with a net inflow of 3.794 billion yuan and a daily increase of 2.10%. The non-bank financial sector also saw a slight increase of 0.33% with a net inflow of 899 million yuan [1] - In contrast, 21 sectors experienced net outflows, with the electronics sector leading with a net outflow of 8.341 billion yuan, followed by the computer sector with a net outflow of 4.375 billion yuan. Other sectors with significant outflows included telecommunications, machinery, and automotive [1] Basic Chemicals Sector Performance - The basic chemicals sector increased by 1.36% with a total net inflow of 41.539 million yuan. Out of 401 stocks in this sector, 239 stocks rose, and 6 stocks hit the daily limit. There were 154 stocks with net inflows, with 8 stocks receiving over 50 million yuan in net inflows. The top stock for net inflow was Wanhua Chemical, with a net inflow of 849 million yuan, followed by Salt Lake Co. and Hubei Yihua with net inflows of 119 million yuan and 115 million yuan respectively [2] - The sector also had stocks with significant net outflows, with 7 stocks experiencing outflows exceeding 50 million yuan. The stocks with the highest outflows were Huafeng Super Fiber, Dongcai Technology, and Nanjing Julong, with outflows of 203 million yuan, 166 million yuan, and 92.551 million yuan respectively [2][4] Basic Chemicals Sector Fund Flow Rankings - The top stocks in the basic chemicals sector by net inflow included: - Wanhua Chemical: +8.29%, 3.77% turnover, 848.69 million yuan inflow - Salt Lake Co.: +3.60%, 2.28% turnover, 119.27 million yuan inflow - Hubei Yihua: +5.08%, 11.27% turnover, 114.66 million yuan inflow - Other notable stocks included Hualu Hengsheng, Hongbaoli, and Zhongyan Chemical with inflows ranging from 56.17 million yuan to 79.97 million yuan [2] Basic Chemicals Sector Outflow Rankings - The stocks with the highest net outflows in the basic chemicals sector included: - Huafeng Super Fiber: -2.45%, 10.74% turnover, -203.01 million yuan outflow - Dongcai Technology: +7.39%, 16.07% turnover, -166.33 million yuan outflow - Nanjing Julong: +0.78%, 41.02% turnover, -92.55 million yuan outflow - Other stocks with significant outflows included Yaji International and Yongtai Technology [4]

7月18日，沪指上涨0.50%，深成指上涨0.37%，创业板指上涨0.34%，沪深300指数上涨0.60%。可交易 A股中，上涨的有2603只，占比48.15%，下跌的2567只。 资金面上，今日主力资金全天净流出229.87亿元。其中，创业板主力资金净流出110.28亿元；科创板主 力资金净流出20.09亿元；沪深300成份股主力资金净流入21.42亿元。 | 行业 | 日涨跌幅（%） | 资金流向（亿元） | 行业 | 日涨跌幅（%） | 资金流向（亿元） | | --- | --- | --- | --- | --- | --- | | 有色金属 | 2.10 | 37.94 | 纺织服饰 | -0.02 | -2.92 | | 非银金融 | 0.33 | 8.97 | 农林牧渔 | 0.38 | -3.12 | | 食品饮料 | 0.73 | 6.05 | 家用电器 | 0.03 | -3.79 | | 交通运输 | 0.90 | 4.22 | 银行 | 0.59 | -4.65 | | 房地产 | 0.48 | 2.48 | 商贸零售 | 0.36 | -4.80 | | 环保 | 0.87 | 2 ...

Investment Rating - The report maintains a "Buy" rating for Wanhua Chemical with a target price of 82.62 CNY [6][18]. Core Viewpoints - The TDI market is experiencing an upward trend in product prices due to a reduction in overseas supply, particularly following an incident at Covestro's German facility, which has led to a significant price increase in the domestic market [1][2]. - The global TDI supply-demand dynamics are expected to improve in the short term, especially with the upcoming peak demand season and domestic maintenance activities [2][3]. - The TDI industry is witnessing a continuous optimization of its structure, with a trend of production capacity shifting towards China, enhancing the competitive advantage of domestic leading enterprises like Wanhua Chemical [3]. Summary by Sections Supply and Demand Dynamics - Covestro's TDI production capacity in Germany is 300,000 tons/year, accounting for 55% of Europe's and 9% of global capacity. The incident has created a supply gap in Europe, which may benefit Chinese exports [2]. - In 2024, global TDI demand is projected at 2.5 million tons, with a capacity of 3.473 million tons, leading to an industry operating rate of approximately 72% [2]. Industry Capacity Trends - The global TDI capacity is expected to increase to 3.977 million tons by 2027, with China's share rising to 2.35 million tons/year, representing 59% of the total [3]. - Wanhua Chemical's capacity is projected to reach 1.42 million tons/year by 2027, increasing its global market share to 36% [3]. Company Performance - Wanhua Chemical reported a revenue of 182.1 billion CNY in 2024, with a year-on-year growth of 4%, but a decline in net profit due to weak product demand [17]. - The company is expected to benefit from new projects and improving supply-demand conditions, leading to a potential recovery in profitability [18].

化工板块全天强势，反映化工板块整体走势的化工ETF（516020）开盘后持续上行，尾盘再度拉升，盘 中场内价格最高涨幅达到2.28%，截至收盘，涨1.95%。 成份股方面，行业龙头万华化学全天狂飙，截至收盘，大涨8.29%，肥料、石化等细分板块亦表现不 俗，截至收盘，华鲁恒升大涨超5%，新凤鸣涨超4%，华峰化学、荣盛石化、盐湖股份等多股涨超3%。 资金面上，基础化工板块今日大举吸金。数据显示，截至收盘，基础化工板块单日获主力资金净流入额 达到62.37亿元，净流入额在30个中信一级行业中高居第2。 | 序号 | | 名称 | 主力净流入额 ▼ | | --- | --- | --- | --- | | 1 | CI005003 | 有色金属(中信) | 109.64亿 | | 2 | | Cl005006 基础化工(中信) | 62.37亿 | | 3 | | Cl005012 国防军工(中信) | 43.23亿 | | 4 | CI005027 | | 26.81亿 | | ਦ | CI005019 | 食品饮料(中信) | 21.32亿 | 消息面上，近日，欧洲化工巨头科思创位于德国多尔马根的工厂发生电气 ...

Market Overview - The three major A-share indices collectively rose on July 18, with the Shanghai Composite Index up by 0.5%, Shenzhen Component Index up by 0.37%, and ChiNext Index up by 0.34. The total trading volume in the Shanghai and Shenzhen markets reached 15,710.55 billion yuan, an increase of 316.8 billion yuan compared to the previous day [1][2]. Sector Performance - The non-ferrous metals sector led the market, with significant gains in lithium and rare earth stocks. The Non-Ferrous Metals ETF (159876) saw a peak intraday price increase of 2.64%, closing up 2.15%, marking a new high for the year [4][5]. - The chemical sector also performed strongly, with the Chemical ETF (516020) reaching a maximum intraday increase of 2.28% and closing up 1.95%. The price surge was driven by TDI price increases due to supply shortages [12][14]. - The food and beverage sector, particularly leading liquor stocks, also showed strength, with the Food ETF (515710) closing up 1.16% [1][2]. Investment Insights - Analysts from Shenwan Hongyuan noted that under the "anti-involution" policy, the expectations for the midstream manufacturing sector are shifting towards 2026, creating more short-term investment opportunities. The passing of the "Big and Beautiful" bill in the U.S. has reduced the risk of a deep recession, enhancing visibility for China's supply-demand dynamics in 2026 [2][3]. - Guojin Securities highlighted that domestic manufacturing companies' capital returns are expected to stabilize and improve, making A-shares more attractive compared to overseas markets. They recommend focusing on upstream resource products, capital goods, and intermediate goods that benefit from both domestic policies and rising overseas demand [3][4]. Rare Earth and Lithium Market Dynamics - The rare earth sector is experiencing a surge due to several favorable factors, including government actions to secure resource safety and the discovery of new rare earth minerals in Inner Mongolia. The leading company, Northern Rare Earth, is expected to see a net profit increase of up to 2014% in the first half of the year [5][6]. - In the lithium market, a recent production halt due to regulatory issues at a lithium mining company in Qinghai has raised concerns about supply constraints. This, combined with a rebound in lithium carbonate futures prices, has led to increased market interest in the sector [6][7]. Chemical Sector Outlook - The chemical sector is benefiting from a supply crunch in TDI, with major players like Wanhua Chemical expected to gain significantly from rising TDI prices. The company is the largest global supplier of MDI and TDI, with plans to expand its production capacity [12][16]. - Analysts predict that the chemical sector will enter a new upward cycle due to improved demand and supply-side adjustments driven by domestic policy changes [17][18]. Hong Kong Market Trends - The Hong Kong market is showing strength, particularly in the technology sector, with significant gains in internet stocks. The Hong Kong Internet ETF (513770) rose by 1.61%, reflecting strong performance from major tech companies [18][21]. - The innovative drug sector is also gaining traction, with the Hong Kong Innovative Drug ETF (520880) seeing a cumulative increase of 58.95% in the first half of the year, outperforming other indices [23][24].

Group 1 - Propylene (C3H6) is a crucial low-carbon olefin used primarily in the production of polypropylene, acrylonitrile, isopropanol, acetone, and propylene oxide, reflecting the development level of a country's petrochemical industry [3][9][19] - The global propylene production capacity exceeded 171 million tons in 2024, with a growth rate of 2%-6% over the past decade, primarily driven by Northeast Asia, especially China [12][19] - The propylene production process includes steam cracking, catalytic cracking, methanol-to-propylene, and propane dehydrogenation (PDH), with PDH becoming a significant source of propylene alongside steam cracking [9][10][19] Group 2 - The global propylene capacity utilization rate has been declining, expected to drop to around 71% by 2025, a decrease of 10 percentage points compared to five years ago [12][19] - In 2025, China's propylene capacity is projected to account for approximately 39% of the global total, with the main downstream products being polypropylene (PP), which will dominate the demand [19][20] - The domestic propylene effective capacity is estimated to be around 69.73 million tons in 2024, with a significant concentration in the East China region, accounting for over 56% of the total capacity [25][26][38] Group 3 - The domestic propylene consumption has been increasing annually but remains below the capacity growth rate, with the main downstream consumers being PP granules, epoxy propane, and acrylonitrile [38][42] - The import dependency for domestic propylene is gradually decreasing, with most imports coming from South Korea, while exports remain minimal [42][49] - The profitability of PDH production is highly sensitive to propane prices, with recent cost optimization efforts reducing energy consumption and processing fees [9][49]

Group 1 - The acrylic acid concept sector increased by 2.35%, ranking third in terms of growth among concept sectors, with nine stocks rising, including Shenyang Chemical, which hit the daily limit, and Wanhua Chemical, Huayi Group, and Benli Technology, which rose by 8.29%, 7.41%, and 4.28% respectively [1][2] - The main capital inflow into the acrylic acid concept sector was 875 million yuan, with six stocks receiving net inflows, led by Wanhua Chemical with a net inflow of 849 million yuan, followed by Guoen Co., Shenyang Chemical, and Satellite Chemical [2][3] - The net inflow ratios for Guoen Co., Wanhua Chemical, and Shenyang Chemical were 12.53%, 12.32%, and 12.09% respectively, indicating strong investor interest in these stocks [3] Group 2 - The top gainers in the acrylic acid concept sector included Wanhua Chemical, which rose by 8.29%, and Shenyang Chemical, which increased by 10.05%, while Guoen Co. experienced a slight decline of 0.29% [3][4] - The overall performance of the acrylic acid concept sector was positive, contrasting with other sectors such as animal vaccines and avian influenza, which saw declines of 0.96% and 0.90% respectively [2][4] - The trading volume and turnover rates for the leading stocks in the acrylic acid sector were notable, with Wanhua Chemical achieving a turnover rate of 3.77% and Shenyang Chemical at 8.40% [3]

Investment Rating - The industry investment rating is "Overweight" indicating that the industry index is expected to outperform the CSI 300 index by 10% or more in the next six months [8] Core Insights - The recent fire incident at Covestro's Dormagen plant in Germany has led to supply disruptions in key chemicals, including chlorine, which is critical for TDI production. This incident is expected to impact TDI supply significantly [7] - TDI prices have been rising due to limited supply and strong overseas demand, with prices in East China reaching 13,700-14,200 CNY/ton as of July 17, reflecting an increase of over 2,000 CNY/ton since July [7] - China's TDI exports have surged, reaching a historical high of 51,600 tons in May 2025, a year-on-year increase of 98.45%, driven by tariff incentives and rising demand in Southeast Asia [7] Summary by Sections Industry Overview - The report highlights structural opportunities in the organic silicon industry following Dow's closure of its UK plant [3] - The fluorochemical sector is expected to maintain its favorable performance due to anticipated earnings growth [3] Recent Events - Covestro's fire incident has caused a significant impact on its production capabilities, particularly affecting TDI and other related products [7] - The TDI supply chain is facing constraints due to multiple factors, including maintenance shutdowns and increased export orders [7] Market Dynamics - The report notes that overseas TDI production capacity is shrinking, providing a competitive advantage for Chinese companies in the global market [7] - The demand growth in Southeast Asia is projected to remain between 6-8% annually, making it a core market for Chinese TDI exports [7] Investment Recommendations - The report suggests focusing on companies that are likely to benefit from the tightening TDI supply and rising prices, specifically mentioning Wanhua Chemical and Cangzhou Dahua [7]