1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report - LPG: Short - term geopolitical disturbances are relatively strong [1] - Propylene: The trend is relatively strong, but the upward momentum is slowing down [1] 3. Summary by Related Catalogs 3.1 Fundamental Tracking 3.1.1 Futures Market - **LPG (PG)**: The closing prices of PG2602, PG2603, and PG2604 on the previous day were 4,240, 4,174, and 4,452 respectively, with daily increases of 0.98%, 0.97%, and 1.23% respectively. The night - closing prices were 4,318, 4,254, and 4,515 respectively, with night - time increases of 1.84%, 1.92%, and 1.42% respectively. The trading volumes of PG2602, PG2603, and PG2604 on the previous day were 2,298, 65,688, and 15,682 respectively, with changes of - 1,577, - 4,425, and 227 respectively compared to the previous day. The positions were 3,205, 86,727, and 54,764 respectively, with changes of - 1,157, - 369, and 549 respectively compared to the previous day [1] - **Propylene (PL)**: The closing prices of PL2602, PL2603, and PL2604 on the previous day were 6,064, 6,203, and 6,227 respectively, with daily increases of 0.71%, 1.16%, and 0.97% respectively. The night - closing prices were 6,140, 6,270, and 6,296 respectively, with night - time increases of 1.25%, 1.08%, and 1.11% respectively. The trading volumes of PL2602, PL2603, and PL2604 on the previous day were 184, 19,615, and 9,214 respectively, with changes of - 17, 3,383, and - 232 respectively compared to the previous day. The positions were 2,449, 13,547, and 8,643 respectively, with changes of 91, - 400, and 459 respectively compared to the previous day [1] 3.1.2 Spot Market - **LPG (PG)**: The prices of Shandong civil, East China civil, South China civil, Shandong ether - post, and FEI arrival in the spot market on the previous day were 4,460, 4,372, 4,780, 4,350, and 4,866 respectively, with changes of - 20, - 56, - 35, - 10, and - 159 respectively compared to the previous day. The main - contract basis values were 286, 198, 606, 326, and 792 respectively, with changes of - 60, - 96, - 75, - 50, and - 199 respectively compared to the previous day. The prices of East China import and South China import were 4,914 and 4,900 respectively, with changes of 0 and - 10 respectively compared to the previous day. The main - contract basis values were 840 and 826 respectively, with changes of - 40 and - 50 respectively compared to the previous day [1] - **Propylene (PL)**: The prices of Shandong, East China, and South China in the spot market on the previous day were 6,175, 6,350, and 6,225 respectively, with changes of 0, 25, and 0 respectively compared to the previous day. The main - contract basis values were - 28, 147, and 122 respectively, with changes of - 71, - 46, and - 71 respectively compared to the previous day [1] 3.1.3 Industrial Chain Startup - PDH startup rate was 62.25% this week (as of January 23, 2026), a decrease of 10.82% compared to last week - Alkylation startup rate was 35.12%, a decrease of 1.3% compared to the previous day - MTBE startup rate was 68.01%, an increase of 0.44% compared to last week [1] 3.1.4 LPG Shipment Volume (in 10,000 tons) - **From the United States**: The shipments to the world, Asia, China, Japan, South Korea, India, and Southeast Asia on January 25, 2026 were 18.8, 18.8, 0.0, 14.4, 0.0, 0.0, and 4.4 respectively, with changes of 9.6, 9.6, - 9.2, 14.4, 0.0, 0.0, and 4.4 respectively compared to the previous day - **From the Middle East**: The shipments to the world, Asia, China, Japan, South Korea, India, and Southeast Asia on January 25, 2026 were 4.6, 4.6, 0.0, 0.0, 0.0, 4.6, and 0.0 respectively, with changes of - 7.6, - 7.6, 0.0, 0.0, 0.0, - 6.0, and 0.0 respectively compared to the previous day [1] 3.2 Trend Intensity - LPG trend intensity: 1 - Propylene trend intensity: 1. The trend intensity ranges from - 2 to 2, with - 2 being the most bearish and 2 being the most bullish [5] 3.3 Market Information - On January 23, 2026, the price of February CP paper cargo for propane was 536 US dollars per ton, a decrease of 4 US dollars per ton compared to the previous trading day; the price of butane was 527 US dollars per ton, a decrease of 4 US dollars per ton compared to the previous trading day. The price of March CP paper cargo for propane was 520 US dollars per ton, a decrease of 3 US dollars per ton compared to the previous trading day [6] - There are multiple domestic PDH device maintenance plans and domestic liquefied gas factory device maintenance plans, including information such as enterprise names, device names, production capacities, maintenance start and end times, etc. [6][7]

Investment Rating - The industry investment rating is "Overweight," indicating an expected outperformance of the industry index relative to the benchmark by more than 5% over the next six months [67]. Core Insights - The report highlights significant price fluctuations in the chemical sector due to extreme weather conditions affecting natural gas prices in the U.S. [1]. - The average prices for various chemical products, including pure MDI, polymer MDI, and TDI, have shown a decline compared to the previous week, with respective price changes of -129, -114, and -213 CNY/ton [2]. - The report provides a detailed analysis of profit margins across different segments, indicating a decrease in margins for pure MDI and polymer MDI, while TDI margins remained relatively stable [2]. Summary by Sections 2.1 Basic Chemical Index Trends - The basic chemical index has shown a weekly increase of 7.3% as of January 23, 2026, with a year-to-date increase of 16.8% [8]. 2.2 Polyurethane Sector - The average prices for pure MDI, polymer MDI, and TDI are reported at 17,714, 13,900, and 13,975 CNY/ton respectively, with corresponding profit margins of 4,503, 1,689, and 2,459 CNY/ton [2][16]. 2.3 Oil, Coal, and Olefin Sector - Ethane and propane prices have increased by 210 and 21 CNY/ton respectively, while the average price for coal remains stable at 520 CNY/ton [2][22]. - The average price for polyethylene is reported at 7,100 CNY/ton, showing a slight decrease of 15 CNY/ton [2][28]. 2.4 Coal Chemical Sector - The average prices for synthetic ammonia, urea, DMF, and acetic acid are 2,211, 1,740, 3,894, and 2,600 CNY/ton respectively, with minor fluctuations in profit margins [2][41]. 2.5 Animal Nutrition Sector - The average prices for VA, VE, solid egg, and liquid egg are reported at 62.2, 54.5, 17.6, and 14.2 CNY/kg respectively, with minimal changes observed [2][54].

Group 1 - The petrochemical sector has entered a low-level fluctuation phase, with ample future elasticity expected as the industry recovers from a down cycle that began after reaching a historical profit peak in 2021. The sector is anticipated to benefit from the "anti-involution" policy and the recovery of domestic demand [1][2][44]. - The "anti-involution" policy is being upgraded, with the Ministry of Industry and Information Technology and six other departments issuing a growth stabilization plan for the petrochemical industry for 2025-2026, targeting an average annual growth of over 5% in added value [1][7][44]. - The cost side of the petrochemical industry has certain support, with IEA predicting global oil demand to remain between 104-105 million barrels per day from 2025 to 2030, and a low likelihood of significant drops in oil prices [1][9][11]. Group 2 - The CSI Petrochemical Industry Index (H11057.CSI) was launched on July 22, 2009, and includes all listed companies in the petrochemical sector from the CSI 800 index sample space. The index is heavily weighted towards basic chemicals (63.61%) and oil and petrochemicals (34.69%) [1][13][45]. - As of January 16, 2026, the CSI Petrochemical Industry Index has a price-to-earnings ratio of 15.44 and a price-to-book ratio of 1.55, indicating relatively low valuations compared to the CSI 800 index. The top ten weighted stocks account for 56.73% of the index [1][19][26][46]. - The average market capitalization of the index's constituent stocks is approximately 1580.30 billion, positioned between the CSI 300 and CSI 800 indices. The index's performance is expected to benefit from structural market trends in late 2025 [1][23][28][46]. Group 3 - The Huaxia CSI Petrochemical Industry ETF (159731) is designed to track the CSI Petrochemical Industry Index and was established on December 2, 2021. The fund manager, Mr. Dan Kuan, has extensive experience in managing index funds [1][33][47]. - As of January 16, 2026, the ETF has a circulation of 549 million shares and a scale of 5.22 billion, with a significant increase in circulation over the past year [1][35][47]. - Huaxia Fund Management Company, established in April 1998, is one of the first national fund management companies approved by the China Securities Regulatory Commission, managing over 900 billion in non-monetary ETF products, ranking first among fund companies [1][41][42].

Market Overview - As of January 23, 2026, the main PVC futures contract closed at 4921 CNY/ton, with a weekly decline in the K-line and an increase in open interest by 48,696 contracts compared to the previous week [1] - During the week of January 19-23, the PVC futures opened at 4806 CNY/ton, reached a high of 4926 CNY/ton, and a low of 4708 CNY/ton, resulting in a weekly price change of 2.07% [1] Price Trends - On January 22, the spot prices for PVC in Hangzhou stabilized, with slight increases in transaction prices. The prices for different types of PVC ranged from 4500 to 4720 CNY/ton [2] - The domestic PVC powder operating rate decreased by 1.10 percentage points to 77.98% [2] Supply and Demand Dynamics - Yibin's 200,000-ton facility has restarted, while Wanhua's 500,000-ton facility has been affected by shutdowns, leading to little change in PVC capacity utilization [2] - The social inventory of PVC has reached a record high, following the strength of the chemical sector. However, the overall demand remains weak due to seasonal factors, with domestic operating rates rising to 80% [3] - PVC production companies are maintaining high supply levels, but domestic demand is in a traditional off-season, leading to rapid accumulation of industry inventory [3]

Core Viewpoint - Major chemical companies have historically overlooked the lithium battery sector, but with the increasing demand for electric vehicles and energy storage, they are now focusing on battery materials, particularly solid-state batteries and lithium iron phosphate [1][2]. Group 1: Market Dynamics - The global demand for lithium iron phosphate (LFP) has surged, with major battery manufacturers like CATL, BYD, and others collectively ordering 6 million tons of LFP materials, amounting to over 240 billion yuan [2]. - Wanhu Chemical is aggressively entering the lithium battery market, establishing a new subsidiary with a registered capital of 740 million yuan, aiming to produce specialized materials for batteries [1][2]. Group 2: Production Capacity - Wanhu Chemical plans to achieve a production capacity of 1 million tons of lithium iron phosphate by 2027, with multiple projects underway, including a 650,000-ton LFP project and two additional projects of 200,000 tons each [2]. - The company is positioning itself to meet the high demand for LFP materials, which is currently outpacing supply, leading to intense competition among manufacturers [2]. Group 3: Strategic Partnerships and Investments - Wanhu Chemical has formed various partnerships and joint ventures in the lithium battery supply chain, including upstream mining and downstream battery production, enhancing its market presence [3]. - The company is also investing in clean energy initiatives, including a joint venture with a state-owned energy company, indicating a broader strategy beyond just battery materials [3][4]. Group 4: Future Outlook - The commercial investment in controlled nuclear fusion in China is accelerating, with significant funding and support from government entities, positioning it as a potential future energy solution [4]. - Wanhu Chemical's diversification into new energy sectors, including nuclear energy, suggests a strategic shift towards sustainable energy solutions, aligning with global trends [4].

Group 1 - The core viewpoint of the article highlights the aggressive selling of large-cap stocks by GJD, with over 600 billion in Hu-Shen 300 funds and 150 billion in Shanghai 50 ETF sold in a single day, raising concerns about the impact on value investment stocks and the market dynamics [1] - GJD has reportedly reduced its holdings by approximately 3000 billion through broad-based ETFs over the past five days, with expectations of further reductions in the coming weeks [1] - The total holdings of GJD are estimated to be between 30,000 billion and 40,000 billion, with a significant portion expected to be sold off, leading to speculation about future market movements [1] Group 2 - The article discusses the market's reaction to GJD's selling, noting that while large-cap stocks have been under pressure, smaller stocks continue to perform well, indicating a divergence in market behavior [2][7] - There is a mention of the historical context of GJD's actions, comparing current strategies to past market interventions, suggesting that decisive actions may be necessary to prevent larger market issues [9] - The article also points out that the recent outflows from ETFs have had a tangible impact on the market, with significant amounts of capital being withdrawn, which could lead to a "bloodletting" effect on the market [8]

Investment Rating - The industry investment rating is "Recommended" (maintained) [1] Core Viewpoints - The recent tensions in Sino-Japanese relations are expected to accelerate the domestic substitution of Japanese semiconductor materials, as Japan holds a significant market share in this sector while domestic production rates are relatively low [3] - The chemical industry in China is anticipated to undergo a revaluation due to anti-involution measures, which are likely to slow down global capacity expansion significantly. This shift could enhance the dividend yield potential of Chinese chemical companies, transforming them from cash-consuming entities to cash-generating ones [4] - The report highlights four major investment opportunities: low-cost expansion, improved industry sentiment, new materials, and high dividend yields [8][9][10] Summary by Sections Investment Suggestions - Key targets for semiconductor material substitution include: 1) Photoresists: Dinglong Co., Yanggu Huatai, Tongcheng New Materials, and others 2) Wet electronic chemicals: Jianghua Micro, Greenland, and others 3) Electronic gases: Haohua Technology, Juhua Co., and others 4) Mask plates: Qingyi Optoelectronics, Luwei Optoelectronics 5) CMP polishing liquids and pads: Anji Technology, Dinglong Co., Jiangfeng Electronics 6) Sputtering targets: Jiangfeng Electronics, Longhua Technology, and others [3] Industry Performance - The chemical industry has shown strong performance with a 1-month increase of 16.5%, a 3-month increase of 23.4%, and a 12-month increase of 53.9% compared to the CSI 300 index [6] Key Product Price Analysis - Industrial-grade lithium carbonate price increased by 15% week-on-week to 13,800 RMB/ton, driven by maintenance at lithium salt plants and optimistic demand forecasts in the energy storage sector [12] - Pure benzene price rose by 7.96% week-on-week to approximately 5,965 RMB/ton, influenced by reduced imports and strong domestic demand [12] Company Tracking and Earnings Forecast - The report includes a detailed earnings forecast for key companies, indicating a positive outlook for several firms in the chemical sector, with expected earnings per share (EPS) growth for 2024 to 2026 [28]

Group 1 - CATL launched the "Tianxing II" light commercial series solution, introducing the first intelligent battery management application for the light commercial vehicle industry, aiming to break the standardization bottleneck and promote customized operations in the new energy light commercial vehicle sector [3] - CATL is rapidly advancing the construction of a 15GWh battery factory in Beijing with an investment of 4 billion yuan, indicating imminent project implementation [5] - CATL, along with partners, established Beijing Times Power Battery Co., Ltd. with a registered capital of 1 billion yuan, where CATL holds a 51% stake responsible for the factory's construction and operation [6] Group 2 - Penghui Energy expects to turn a profit in 2025 with a projected net profit of 170 million to 230 million yuan, driven by increased sales orders and revenue growth [7] - The second phase of the Xiamen Times project is set to produce 30GWh of battery cells, with construction expected to be completed by Q2 of this year [8] - The Chongqing project by Ruipu Lanjun-Saike Technology aims for an initial capacity of 12GWh, with total investment of 10 billion yuan and expected annual output value of 26 billion yuan upon full production [9] Group 3 - EVE Energy was recognized as the world's first cylindrical battery lighthouse factory, achieving certification for its advanced manufacturing and digital solutions [10][11] - Portugal signed six investment agreements totaling 30.77 billion euros, with four projects related to battery materials and electric vehicles, aimed at promoting energy transition [12] - Xiamen New Energy and Quan Feng Holdings signed a strategic cooperation memorandum to focus on lithium battery technology innovations [13] Group 4 - The Xiangdong lithium battery project in Hebei has been publicly accepted, with a total investment of 1.35 billion yuan and plans for a production capacity of 4GW [14] - Trina Solar signed two major projects, including a 250 MW/1 GWh energy storage project in Italy and a supply contract for battery storage systems in Latin America totaling 1.203 GWh [15][16] - Tianhua New Energy is planning an IPO in Hong Kong to enhance its international strategy and financing capabilities [18] Group 5 - Tianqi Lithium is expanding its lithium hexafluorophosphate project with an investment of 300 million yuan, increasing production capacity from 150,000 tons to 280,000 tons [19] - Hunan Youneng expects a significant increase in net profit for 2025, projecting a rise of 93.75% to 135.87% year-on-year [20] - Purtai's net profit for 2025 is expected to increase by 93.18% to 101.58%, driven by strong demand in the energy storage market [21] Group 6 - Rontgen High-Tech's production capacity for its core product has been fully sold out in Q1 2026, prompting the company to seek financing for new production lines [22] - The Democratic Republic of Congo submitted a shortlist of state-owned mineral assets to the U.S. for evaluation, including various mining projects [23] - Wanhua Chemical is advancing two lithium battery material projects with a total production capacity of 85,000 tons of lithium iron phosphate [24] Group 7 - Hunan Youneng is increasing its production capacity through a stock issuance, raising up to 4.788 billion yuan for new projects [25] - Lichi Intelligent passed the IPO review for its listing on the Growth Enterprise Market [27] - Efei Laser signed a 158 million yuan contract for lithium battery equipment, which is expected to positively impact future financial performance [30]

Investment Rating - The report rates the chemical industry as "Outperform the Market" [1] Core Views - The report highlights the impact of rising international oil and natural gas prices, leading to price increases in disperse dyes and refrigerant R125 [1] - Key investment suggestions for January include focusing on undervalued industry leaders, the effects of "anti-involution" on supply in related sub-industries, and the importance of self-sufficiency in electronic materials and certain new energy materials companies amid strong downstream demand [1][11] - The report emphasizes the potential for recovery in demand supported by policy, ongoing supply-side optimization, and the growth prospects in emerging sectors such as semiconductor materials and OLED materials [11] Summary by Sections Industry Dynamics - During the week of January 19-25, 43 out of 100 tracked chemical products saw price increases, while 24 experienced declines, and 33 remained stable [10][32] - The average price of NYMEX natural gas rose by 62.90% to $5.05 per mmbtu, and WTI crude oil prices increased by 2.74% to $61.07 per barrel [10][33] Investment Recommendations - As of January 23, the price-to-earnings ratio (P/E) for the SW basic chemical sector is 29.45, placing it in the 84.71 percentile historically, while the P/E for the SW oil and petrochemical sector is 14.08, in the 42.32 percentile historically [11] - Recommended stocks include Wanhua Chemical, Hualu Hengsheng, and Yike Technology, among others, with a focus on companies benefiting from strong demand and favorable pricing conditions [11] Price Changes and Market Trends - The price of disperse dyes increased, with disperse black ECT300% averaging 18 yuan/kg, a rise of 5.88% [34] - Refrigerant R125 prices rose to 50,000 yuan/ton, reflecting a 3.09% increase from the previous week and a 16.38% increase year-on-year [35]

Investment Rating - The report maintains a bullish outlook, focusing on long-term opportunities in cyclical industries [2][24]. Core Viewpoints - The macro timing model for January 2026 scored 0, indicating a 76.92% probability of an increase in the Wande All A Index over the following month, with an average expected gain of 3.18% [24][31]. - The report emphasizes the strong upward momentum in cyclical industries, particularly in non-ferrous metals and chemicals, driven by global macro events [24][25]. - Short-term investments in thematic sectors such as commercial aerospace, AI applications, and space photovoltaics have shown significant rebounds, although caution is advised due to potential volatility from rapid price increases [25][27]. Fund Size Statistics - In the period from January 19 to January 23, 2026, the top three increasing equity ETF types were: thematic index ETFs (59.135 billion), industry index ETFs (7.975 billion), and cross-border industry index ETFs (5.346 billion) [9][10]. - The top three increasing equity ETF products were: power grid equipment ETF (7.326 billion), chemical ETF (5.717 billion), and sci-tech chip ETF (3.953 billion) [10][14]. - The top three increasing equity ETF tracking indices were: segmented chemical index (9.829 billion), power grid equipment thematic index (7.326 billion), and SSH gold stock index (5.251 billion) [18][20]. Market Outlook - The report suggests a positive outlook for the A-share market in January 2026, with a focus on the micro-cap index and the CSI 500 leading the market [24][25]. - Long-term recommendations include a focus on non-ferrous metals and chemicals, with silver prices surpassing the psychological level of 100, indicating potential for further increases [24][25]. - The report anticipates a market characterized by oscillating upward trends, recommending a growth-oriented ETF allocation [67][68].