Core Viewpoint - Stainless steel futures prices have shown weakness in Q2 2023, nearing 2020 lows, but recent production cuts have led to a rebound in spot prices, indicating potential changes in supply and demand dynamics [1][4]. Supply Summary - As of May 2025, the crude stainless steel output from 43 domestic steel enterprises was 3.4629 million tons, a decrease of 1.14% month-on-month but an increase of 4.9% year-on-year [1]. - Cumulative output from January to May was 16.4843 million tons, up 10.15% year-on-year [1]. - June production was 3.3623 million tons, down 2.91% month-on-month, while July production is expected to be 3.1655 million tons, a decrease of 9.58% [1]. - The production of 200 series stainless steel was 1.0219 million tons, down 1.62% month-on-month; 300 series was 1.5427 million tons, down 4.94%; and 400 series was 600.9 thousand tons, up 0.19% [1]. Demand Summary - The apparent consumption of stainless steel in May 2025 was 2.9093 million tons, a year-on-year increase of 4.4% [2]. - From January to May, the apparent consumption totaled 13.9384 million tons, up 5.68% year-on-year [2]. - Demand from the real estate sector has declined, and the effects of policies promoting the replacement of consumer goods have been fully realized [2]. - July is traditionally a weak demand month for stainless steel, which may put pressure on prices [2]. Inventory Summary - The accumulation of stainless steel social inventory is due to supply growth outpacing demand growth, with total inventory at 1.1544 million tons, a decrease of 0.3% [2]. - Cold-rolled stainless steel inventory was 622.2 thousand tons, down 2%, while hot-rolled stainless steel inventory was 532.2 thousand tons, up 1.82% [2]. Trade Summary - From January to May 2025, China imported 718 thousand tons of stainless steel, a decrease of 258.6 thousand tons or 26.5% year-on-year [3]. - Exports totaled 2.1101 million tons, an increase of 200.6 thousand tons or 10.5% year-on-year, although recent export growth has slowed [3]. - Net exports reached 1.392 million tons, up 459 thousand tons or 49.2% year-on-year, with over 50% of exports going to Southeast Asian countries, which may be affected by U.S. tariff policies [3]. Cost Summary - As of late June, the profit margins for various stainless steel production methods were negative, indicating a cost-price mismatch: -2.44% for high-nickel iron, -0.68% for scrap stainless steel, -7.88% for self-produced high-nickel iron, and -21.57% for low-nickel and pure nickel processes [3]. - The actual reduction in stainless steel production in July remains to be observed, with short-term cuts potentially leading to price rebounds, but a long-term reduction trend has not yet formed [3]. Nickel and Chrome Market Summary - Nickel iron prices are weak, with recent bids at 940 yuan per nickel and a Mysteel index at 920 yuan per nickel [4]. - Domestic nickel pig iron imports for May 2025 were 97.7 thousand tons, with a cumulative import of 523 thousand tons from January to May, reflecting a 23.7% year-on-year increase [4]. - Chrome ore prices have declined, weakening cost support for ferrochrome, while the southern production areas are entering a peak water period, which may affect electricity prices and ferrochrome costs [4]. Overall Market Outlook - The stainless steel market is currently characterized by oversupply and weak demand, with ongoing inventory accumulation and insufficient cost support for prices [4]. - Short-term production cuts may lead to price rebounds, but a long-term reduction trend has not yet emerged, indicating that prices are still in a "bottoming" phase [4]. - As global excess capacity is gradually eliminated, the influence of major stainless steel producing countries is expected to increase, potentially creating better long positions in the future [4].

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The explosion at Shandong Gaomi Chemical Plant is expected to accelerate the elimination of backward production capacity in the chemical industry [4][23][25] - The supply of polyester filament continues to shrink, leading to a stable market trend [26][27] - The price of phosphate rock remains stable, while urea prices are experiencing fluctuations [47][48] Summary by Sections Industry Trends and Events - The chemical industry index outperformed the CSI 300 index by 0.42% this week [18] - The explosion incident on May 27 at Shandong Youdao Chemical Co., Ltd. resulted in 5 deaths and 6 missing persons, prompting a provincial investigation into similar chemical production processes [4][23][24] Key Product Tracking - Polyester filament prices are stable, with POY at 7050 CNY/ton, FDY at 7300 CNY/ton, and DTY at 8200 CNY/ton [26][27] - The market for viscose staple fiber is stable, with prices around 13000 CNY/ton [30] - The price of light soda ash is 1323 CNY/ton, showing a decline of 0.45% [42] - Urea prices are down to 1864 CNY/ton, reflecting a decrease of 0.27% [47] Beneficiary Companies - Beneficiary companies from the elimination of backward capacity include Shanshui Technology, Zhejiang Longsheng, and Annuoqi in the dye intermediate sector [25] - Recommended companies in the chemical sector include Wanhua Chemical, Hualu Hengsheng, and Hengli Petrochemical [6]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The explosion at the Shandong Gaomi chemical plant is expected to accelerate the elimination of backward production capacity in the chemical industry [4][23][25] - The chemical industry index outperformed the CSI 300 index by 0.42% this week [18][21] - The supply of polyester filament continues to shrink, leading to a stable market trend [26][27] Summary by Sections Industry Trends and Events - The chemical industry index reported a value of 3383.91, down 0.66% from the previous week, while the CSI 300 index fell by 1.08% [18] - The CCPI (China Chemical Product Price Index) was reported at 4077 points, a decrease of 0.71% from the previous week [21] - The Shandong Gaomi chemical plant explosion resulted in 5 deaths and 6 missing persons, prompting a provincial investigation into similar chemical production processes [23][24] Key Product Tracking - Polyester filament prices remained stable, with POY at 7050 CNY/ton, FDY at 7300 CNY/ton, and DTY at 8200 CNY/ton [27] - The market for viscose staple fiber is stable, with prices holding at 13000 CNY/ton [30] - The price of soda ash is on a downward trend, with light soda ash averaging 1323 CNY/ton and heavy soda ash at 1465 CNY/ton [42] Beneficiary Stocks - Recommended stocks include leading chemical companies such as Wanhua Chemical, Hualu Hengsheng, and Hengli Petrochemical [6] - Beneficiary stocks from the dye intermediate sector include Shanshui Technology and Zhejiang Longsheng [25] - In the agricultural and phosphate chemical sectors, recommended stocks include Xingfa Group and Limin Co., Ltd. [6]

Investment Rating - The report maintains a "Positive" rating for the photovoltaic industry, indicating an expectation of performance that exceeds the market benchmark by more than 5% in the next six months [5]. Core Insights - The photovoltaic industry experienced a significant decline in profitability in 2024, with total revenue dropping to 841.08 billion yuan, a decrease of 24.4%, and a net profit of -34.798 billion yuan, down 140% year-on-year. However, Q1 2025 showed signs of recovery with a reduced loss of -6.838 billion yuan, a 72.2% improvement from the previous quarter [1][19]. - The main industry chain faced a complete shift from profit to loss in 2024, while the supporting materials sector, including brackets and inverters, saw growth. Revenue growth rates for these segments were 39.6%, 37.2%, 31.4%, 20.4%, and 6.3% respectively [2][31]. - In Q1 2025, driven by policy-induced demand, the industry saw a recovery in performance, with revenue growth in segments such as junction boxes and battery cells, with respective increases of 21.7% and 17.0% [3][36]. Summary by Sections Industry Overview - The global photovoltaic market is projected to add approximately 530 GW of new installations in 2024, a year-on-year increase of 35.9%. In China, new installations are expected to reach 277.57 GW, up 28.3% from the previous year [12][19]. Segment Analysis - The main industry chain, including silicon materials, wafers, cells, and modules, saw a complete transition to losses in 2024. In contrast, the supporting materials sector performed well, with brackets and inverters achieving net profit growth rates of 40.4% and 4.6% respectively [2][31]. - In Q1 2025, the main industry chain showed signs of recovery, with significant reductions in losses across all segments, particularly in silicon materials and wafers, which saw reductions of 32.7% and 65.5% in losses respectively [3][36]. Investment Strategy - The report suggests that the recent policy changes have led to a slight recovery in prices across the industry chain, which may improve profitability. However, the overall industry remains in a state of overcapacity, and the sustainability of profit recovery is uncertain [4][39]. - Key investment themes include focusing on leading companies in the supporting materials sector, such as Tongling Co. and Yubang New Materials, as well as monitoring the rapidly evolving battery cell and silicon material segments for potential opportunities [4][40].

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a revenue of 67.09 billion yuan in 2024, representing a year-on-year growth of 9.15%. The net profit attributable to the parent company was 1.10 billion yuan, a growth of 1.32% year-on-year [2] - The first quarter of 2025 showed a revenue of 14.56 billion yuan, with a year-on-year increase of 0.73% [3] - The supply-demand dynamics in the industry are improving, with a notable increase in demand for polyester filament due to a 12.5% growth in retail sales of clothing in 2024 [4] - The company is expected to benefit from the optimization of industry supply structure, with a forecasted net profit of 1.30 billion yuan in 2025, reflecting an 18.3% growth [7] Financial Summary - In 2024, the company achieved a gross profit margin of 5.6%, with a projected increase to 6.3% in 2025 [6] - The earnings per share (EPS) for 2025 is estimated at 0.85 yuan, with a price-to-earnings (P/E) ratio of 12.86 [7] - The company’s total revenue is expected to reach 70.91 billion yuan by 2027, with a modest growth rate of 1.0% [6][9]