Investment Rating - The report rates the chemical industry as "Outperform" [1] Core Views - The industry has been significantly impacted by tariff-related policies and fluctuations in crude oil prices. Key areas to focus on in June include safety regulation policies, supply chain changes in the pesticide and intermediate sectors, performance fluctuations due to "export rush," the importance of self-sufficiency in electronic materials, and stable dividend policies in energy companies [1][10] Summary by Sections Industry Dynamics - As of June 1, the average price tracking 100 chemical products showed that 23 products increased in price, 45 decreased, and 32 remained stable. The month-on-month average price changes were 26.73% up, 63.00% down, and 10.27% stable. The products with the highest weekly price increases included hydrochloric acid (up 31% in the Yangtze River Delta) and TDI, while those with the largest decreases included soft foam polyether and liquid chlorine [9][32] Oil and Gas Market - International oil prices have decreased, with WTI crude futures closing at $60.79 per barrel (down 1.20%) and Brent crude at $63.90 per barrel (down 1.36%). The U.S. crude oil production averaged 13.47 million barrels per day, an increase of 2.7% year-on-year. Gasoline and distillate demand in the U.S. has increased, with total refined oil demand averaging 19.89 million barrels per day, down 0.2% year-on-year [9][10] Chlorantraniliprole Industry - The chlorantraniliprole industry has experienced capacity damage, with the largest producer, Youdao Chemical, having a production capacity of 11,000 tons. The market supply has significantly reduced, and current inventory levels are low due to previous market conditions. The price for chlorantraniliprole is expected to rise to 250,000-280,000 yuan per ton in the short term [9][10] Acrylic Acid Market - The price of acrylic acid has decreased, with the average market price at 7,050 yuan per ton, down 8.44% from the previous week. Supply has increased due to the resumption of production in Shandong, while downstream demand remains cautious [9][10] Investment Recommendations - As of June 1, the SW basic chemical sector's P/E ratio (TTM excluding negative values) is 21.66, at the 58.33% historical percentile. The oil and petrochemical sector's P/E ratio is 10.81, at the 13.47% historical percentile. Key investment themes include the sustained high prices of crude oil, rapid development in downstream industries, and the potential for recovery in demand due to policy support [10][11]

Group 1 - The core viewpoint of the article highlights the growth in the electronic information manufacturing industry, with a year-on-year increase of 11.3% in value added from January to April 2025, outperforming the overall industrial and high-tech manufacturing sectors by 4.9 and 1.5 percentage points respectively [1] - In April, the electronic information manufacturing industry saw a year-on-year increase of 10.8% in value added [1] - Key product outputs from January to April include 105 million microcomputer devices (up 4.7% year-on-year), 454 million mobile phones (down 6.8% year-on-year), and 150.9 billion integrated circuits (up 5.4% year-on-year) [1] Group 2 - Export statistics for January to April show that 43.84 million notebook computers were exported (down 0.4% year-on-year), 22.4 million mobile phones (down 7.1% year-on-year), and 106.3 billion integrated circuits (up 20% year-on-year) [1]

Group 1 - Samsung Electronics' foundry division has secured orders for 7nm and 8nm processes from AI chip design companies, including Nintendo, improving capacity utilization [1] - Samsung's 3nm process is facing challenges, with a yield rate around 50%, while TSMC has achieved over 90% yield, raising concerns about Samsung's competitiveness in advanced processes [1][2] - Major clients like Google are shifting from Samsung's 3nm process to TSMC, indicating a loss of trust in Samsung's foundry capabilities due to yield issues [2] Group 2 - Apple, Qualcomm, NVIDIA, and MediaTek are adopting TSMC's third-generation 3nm process, with plans to transition to 2nm starting in 2026 [2] - The semiconductor industry emphasizes the importance of trust between foundries and clients, and Samsung's yield problems have led to skepticism about its foundry business [2]

Investment Rating - The report maintains an "Outperform" rating for the chemical industry, indicating a positive outlook based on current valuations and expected demand recovery [1]. Core Insights - The basic chemical industry showed a year-on-year recovery in profitability in Q1 2025, with revenue and net profit increasing by 5.58% and 13.33%, respectively [4][45]. - The oil and petrochemical sector's performance remains stable despite short-term fluctuations in oil prices, with a slight decline in revenue and net profit [27][33]. - The report highlights that the construction projects in the basic chemical sector experienced a negative growth for the first time in five years, indicating potential challenges ahead [20]. Summary by Sections Industry Overview - In Q1 2025, the basic chemical industry achieved total revenue of 534.57 billion yuan and a net profit of 34.26 billion yuan, marking the first year-on-year growth in nearly three years [4][5]. - The oil and petrochemical sector reported total revenue of 1,931.83 billion yuan, a decrease of 6.78% year-on-year, with net profit declining by 6.35% [27][30]. Profitability Metrics - The basic chemical industry's gross margin and net margin improved to 16.91% and 6.63%, respectively, with a return on equity (ROE) of 1.85% [11][45]. - The oil and petrochemical sector maintained a gross margin of 19.19% and a net margin of 5.74%, with a slight decrease in ROE to 2.82% [33][38]. Sub-industry Performance - Among 33 sub-industries in the basic chemical sector, 22 reported revenue growth, with significant increases in other chemical raw materials (+29.08%) and compound fertilizers (+25.84%) [4][10]. - The oilfield services segment within the oil and petrochemical sector saw a robust net profit growth of 29.82% [27][31]. Construction and Investment Trends - The basic chemical sector's construction projects totaled 363.16 billion yuan, reflecting a 6.04% year-on-year decrease, the first negative growth in five years [20][23]. - The oil and petrochemical sector's construction projects increased by 8.23% to 582.72 billion yuan, indicating ongoing investment despite revenue declines [40][41]. Market Valuation - As of May 11, 2025, the price-to-earnings (P/E) ratio for the basic chemical sector was 21.92, and for the oil and petrochemical sector, it was 10.58, both indicating low historical valuations [1][23].

Core Insights - Nvidia is planning to release a new GPU based on the Blackwell architecture as a response to the ban on the H20, which is based on the Hopper architecture [2][4] - Jefferies' analysis suggests that the US may impose a memory bandwidth limit of 1.7-1.8TB/s on GPUs, which could lead Nvidia to switch from HBM to GDDR6 for the downgraded H20 [3] - A report from Guangfa Overseas predicts that the new GPU, potentially named 6000D or B40, will be launched in early July and will feature GDDR7 with a bandwidth of approximately 1.7TB/s, significantly lower than H20's 4TB/s [3][4] Market Analysis - The expected shipment volume for the new GPU is projected to reach around 1 million units by the end of 2025, supported by NVLink and CUDA technologies [3] - Previous estimates for Huawei's Ascend series shipments in 2025 ranged from 700,000 to 850,000 units, with IDC reporting 640,000 units for 2024, indicating a strong growth trajectory [3] Product Development - The rapid development and anticipated release of the Blackwell-based GPU within a few months of the H20 ban highlight Nvidia's agile design capabilities and collaboration with TSMC [4]

Core Viewpoint - Nvidia is planning to release a modified version of the H20 GPU, referred to as a "special version" for China, based on the Blackwell architecture instead of the original Hopper architecture [1]. Group 1: GPU Specifications and Market Impact - Jefferies analysis suggests that the US may impose a memory bandwidth limit of 1.7-1.8TB/s on GPUs, which could lead Nvidia to replace HBM memory with GDDR6 in the downgraded H20, potentially outperforming gaming GPUs like the RTX5090D [2]. - Another report from GF Securities indicates that the new GPU, possibly named 6000D or B40, is expected to be released in early July, featuring GDDR7 memory with a bandwidth of approximately 1.7TB/s, compared to H20's 4TB/s [3]. - The expected shipment volume for the B40 GPU is projected to reach around 1 million units by the end of 2025, supported by NVLink and CUDA technologies [3]. Group 2: Market Dynamics and Historical Context - Prior to the ban on H20, there were indications that it would be discontinued in favor of a Blackwell-based special version, which was not fully prepared at the time of the ban [3]. - The rapid development and release of the new GPU can be attributed to Nvidia's established design framework and TSMC's advanced manufacturing processes, allowing for a quick turnaround following the H20 ban [3].

Group 1 - MediaTek will start using TSMC's latest 2nm chip manufacturing technology from September this year and plans to continue utilizing all of TSMC's advanced process technologies to maintain competitiveness in the AI era [1] - MediaTek's CEO, Cai Lixing, announced that the company will begin trial production of chips using the 2nm node in the second half of this year, targeting "high shipment volume" end devices [1] - The term "Tape-out" refers to the stage where chip design is finalized and ready for mass production [1] Group 2 - MediaTek plans to enter the laptop market by using TSMC's 3nm process to manufacture chips for Google's high-end Chromebook professional series [2] - The company aims to create customized AI accelerators for data centers and has partnered with NVIDIA to develop Spark, an AI computer for personal desktops, expected to ship this summer [2]

Investment Rating - The report rates the chemical industry as "Outperform the Market" [1] Core Views - The industry is significantly influenced by tariff-related policies and fluctuations in crude oil prices, suggesting a balanced allocation strategy. Focus is recommended on companies in electronic materials with increasing self-sufficiency and energy firms with stable dividend policies [1][10] - The report highlights the potential for sustained high oil prices, ongoing high demand in the oil and gas extraction sector, and the rapid development of downstream industries, particularly in new materials [10] Industry Dynamics - In the week of May 12-18, 2025, among 100 tracked chemical products, 43 saw price increases, 32 saw declines, and 25 remained stable. The average price of WTI crude oil increased by 2.41% to $62.49 per barrel, while NYMEX natural gas prices fell by 12.37% to $3.33 per mmbtu [9][10] - MDI prices rose, with the average price for polymer MDI at 16,500 CNY/ton, an increase of 8.55% week-on-week. The average price for pure MDI was 17,800 CNY/ton, up 2.89% [10] - Polyester staple fiber prices increased to 6,710 CNY/ton, a rise of 5.17% week-on-week, with production expected to be around 167,000 tons [10] Investment Recommendations - The report suggests a focus on companies with strong dividend policies and those involved in electronic materials, particularly in semiconductor and OLED materials, as well as new energy materials [10] - Recommended stocks include China Petroleum, China Oilfield Services, and several technology firms such as Anji Technology and Yake Technology [10] - The report emphasizes the importance of policy support for demand recovery and suggests monitoring leading companies with high earnings elasticity [10] Key Metrics - As of May 18, 2025, the price-to-earnings ratio for the SW basic chemicals index is 22.09, at the 61.89% historical percentile, while the price-to-book ratio is 1.80, at the 11.72% historical percentile [10]

Investment Rating - The report maintains an "Outperform" rating for the chemical industry, indicating a positive outlook based on expected economic recovery and demand improvement [1]. Core Insights - The basic chemical industry is expected to see a recovery in profitability, with 2024 revenues projected to reach CNY 2,219.98 billion, a year-on-year increase of 2.66%, while net profit is expected to decline by 8.18% to CNY 108.87 billion [6][26]. - The oil and petrochemical sector is anticipated to maintain stable revenues and profits, with 2024 revenues estimated at CNY 7,941.40 billion, a decrease of 2.81%, and net profit expected to grow by 0.58% to CNY 372.14 billion [1][26]. - The report highlights that 23 out of 33 sub-industries in the basic chemical sector experienced revenue growth in 2024, with significant increases in chlor-alkali and textile chemicals [6][15]. Summary by Sections Industry Overview - The basic chemical industry is experiencing a decline in profitability, with gross and net profit margins at 16.27% and 5.13%, respectively, both down from 2023 [26]. - The report notes that the industry has been in a continuous decline in profitability from 2022 to 2024, but signs of stabilization are emerging [26]. Sub-Industry Performance - In 2024, chlor-alkali and textile chemicals showed the highest profit growth rates at 262.84% and 125.27%, respectively [15][26]. - Conversely, non-metallic materials and other plastic products faced significant profit declines of 79.24% and 67.49% [15][26]. Quarterly Analysis - For Q4 2024, the basic chemical industry reported revenues of CNY 565.72 billion, a year-on-year increase of 5.15%, but a quarter-on-quarter decline of 0.90% [6][7]. - Net profit for Q4 2024 was CNY 14.16 billion, down 10.73% year-on-year and 51.03% quarter-on-quarter [6][7]. Investment Recommendations - The report suggests focusing on companies in rapidly developing downstream sectors, particularly in new materials, energy security, and policy-driven demand recovery [1][26]. - Recommended companies include China National Petroleum, China National Offshore Oil, and various technology firms in the semiconductor and new energy materials sectors [1][26].

Group 1 - GlobalWafers, a Taiwanese chip material manufacturer, plans to invest an additional $4 billion in the U.S. to strengthen local supply and respond to the U.S. government's efforts to promote manufacturing [1] - The company's total investment in the U.S. will exceed $7.5 billion, doubling its existing investment, and is driven by increasing market demand and favorable tariff structures [1] - The new Texas facility will produce silicon wafers for semiconductors and is expected to create 1,200 construction jobs and 180 permanent jobs, with plans to hire up to 650 engineering, technical, and operational professionals by the end of 2028 [1] Group 2 - The U.S. government views chip manufacturing as a national security priority, emphasizing the economic, technological, and military reliance on superior chip capabilities [1] - During the pandemic, supply chain issues highlighted the critical nature of the semiconductor industry, with chip shortages impacting automotive sales and other sectors [1] - In March, TSMC announced plans to invest at least $100 billion in U.S. chip manufacturing over the coming years, building on a previous commitment of $65 billion made during the Biden administration [2]