Market Overview - The A-share market showed resilience despite a divergence between growth and value styles, with the ChiNext index falling by 3.86% and the CSI 300 index rising by 0.37% [2] - The value style, represented by the CSI Dividend Index, performed well, increasing by 1.79%, indicating a preference for high dividend and low valuation stocks amid rising overseas uncertainties [2] - The average weekly increase for Wind's first-level industry was 0.15%, with 55% of sectors yielding positive returns, particularly in non-ferrous metals, coal, and steel, which rose by 4.44%, 4.41%, and 4.18% respectively [2] Fund Issuance and Performance - A total of 4 funds were issued last week, including 2 equity funds, 1 bond fund, and 1 FOF fund, with total issuance of 1.13 billion units [3][4] - The Wind All Fund Index decreased by 0.62%, with the ordinary equity fund index down by 1.58% and the mixed equity fund index down by 1.52% [3][7] Global Asset Review - Global equity markets experienced significant divergence, with major U.S. indices declining due to supply chain issues and government shutdowns, while Asian markets showed mixed results [4] - Gold prices reached a historical high, surpassing $4000 per ounce, while energy commodities showed weaker performance [4][5] Domestic Fund Market Review - The average weekly increase for Wind's first-level industry was 0.15%, with the public utility sector leading with a 3.69% increase, reflecting demand for stable cash flow and low valuation amid uncertainty [13] - The healthcare sector saw a decline of 1.21% for the week and 3.22% over the past month, attributed to internal sector differentiation and short-term sentiment [13] Bond Market Review - The bond market showed mixed performance, with long-term government bonds underperforming while mid-term bonds remained stable [15] - The 10-year government bond yield was recorded at 1.846%, reflecting a slight decrease of 1 basis point from the previous week [17]

Market Overview - Hong Kong's stock market has become deeply "localized" and "new economy-oriented," characterized by "low valuation" and "high dividend" features[3] - As of July 2025, mainland enterprises account for 57% of the total number of listed companies and 81% of the total market capitalization in Hong Kong[11] Market Structure - The main board of the Hong Kong Stock Exchange dominates with 2,337 listed companies and a total market capitalization of 44.82 trillion HKD, while the growth enterprise market has 314 companies with a market cap of 0.07 trillion HKD[10] - The market is highly concentrated, with 69.43% of companies having a market cap between 0-20 billion HKD, contributing only 1.80% to total market capitalization[42] Valuation Characteristics - As of August 15, 2025, the Hang Seng Index has a price-to-earnings (P/E) ratio of 11.52 and a price-to-book (P/B) ratio of 1.20, both lower than major global indices[49] - The average valuation premium of A-shares over H-shares is approximately 55%, with most dual-listed companies showing significant price differences[52] Shareholder Returns - The dividend yield of the Hang Seng Index has remained stable between 3%-5% since 2020, outperforming major markets like the US and Japan[64] - Annual cash dividends in the Hong Kong market have steadily increased from under 700 billion HKD in 2015 to over 1.2 trillion HKD in 2024[68] Investor Structure - The investor base in Hong Kong is highly internationalized, with foreign investors contributing 41% of total trading volume, and institutional investors accounting for 57%[79] - The market has seen a significant shift, with the market share of mainland funds through the Stock Connect program rising to 12.29% by July 2025[81] Southbound Capital - Cumulative net inflows from southbound funds have reached 4.60 trillion HKD as of August 2025, significantly impacting market liquidity and asset pricing[94] - The proportion of southbound funds in the Hong Kong market has increased, with their trading volume accounting for nearly 50% of total market transactions in 2025[96]

Core Viewpoint - The A-share market experienced a collective decline on October 10, 2025, with over 2,300 stocks falling, while the transportation sector showed resilience with a notable increase in passenger flow during the National Day holiday [1] Market Performance - A-share indices opened lower, with significant declines across various sectors, particularly in electronics, power equipment, and computing, while coal, textiles, building materials, and non-bank financials led the gains [1] - The Transportation ETF (159666) was the only fund tracking the CSI Transportation Index, rising by 0.6%, with key holdings such as Dongguan Holdings increasing over 5% [1] Passenger Flow Data - The National Day and Mid-Autumn Festival holiday saw a record high in cross-regional passenger flow, totaling 2.433 billion trips over eight days, averaging a year-on-year increase of 6.3% and a 30.8% increase compared to 2019 [1] - Breakdown of passenger transport volume included: - Rail: 154 million trips (+2.6% YoY) - Road: 2.248 billion trips (+6.6% YoY) - Civil Aviation: 19.14 million trips (+3.3% YoY) - Water Transport: 11.66 million trips (+4.1% YoY) [1] Sector Characteristics - Companies within the transportation sector are characterized by high dividends, low valuations, and stable performance, encompassing logistics, railways, highways, shipping ports, and airports, reflecting the overall performance of listed companies in the A-share transportation industry [1]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - OPEC shows a hesitant attitude with a slightly stronger willingness to support prices than to expand market share, and the slight increase plan will continue to suppress the upside space of oil prices. Crude oil is expected to remain volatile in the short term [1]. - The fundamentals of methanol have marginally improved, and the downside space is expected to be relatively limited. It is recommended to focus on short - long opportunities on dips [3]. - Urea is currently in a situation of low valuation and weak drivers. With no effective positive factors in reality, it is suggested to focus on going long on dips at low prices [5]. - For rubber, the medium - term view is bullish, but it has broken down in the short term. It is recommended to set stop - losses and enter short - long positions opportunistically, and to partially re - establish the hedge position of buying RU2601 and selling RU2511 [12]. - The fundamentals of PVC are poor, with strong domestic supply and weak demand, and the export outlook is weak. In the short term, the valuation has declined to a low level, and it is recommended to focus on short - selling opportunities on rallies in the medium term [14]. - The spot and futures prices of pure benzene and styrene are falling, and the basis is weakening. The BZN spread has a large upward repair space, and the price of styrene may stop falling when the downstream starts to rise and the port inventory is depleted [17]. - The price of polyethylene may oscillate upward in the long term as the long - term contradiction shifts from cost - driven decline to the Korean ethylene clearance policy. In the short term, it may gap down at the opening [20]. - For polypropylene, there is a large supply pressure, and the downstream start - up rate rebounds seasonally at a low level. There is no prominent short - term contradiction, and the high number of warehouse receipts suppresses the price [23]. - For PX, the current load is high, and the expected inventory accumulation period continues. It is recommended to wait and see in the short term [26]. - For PTA, the supply - side unexpected maintenance volume is still high, and the inventory depletion pattern continues. However, the processing fee space is limited. It is recommended to wait and see in the short term [27]. - For ethylene glycol, the domestic supply is high, and the port inventory is expected to be low in the short term but will turn to inventory accumulation in the fourth quarter. It is recommended to short on rallies under the weak outlook, but beware of the risk of the weak expectation not being realized [29]. Summary by Industry Crude Oil - **Market Information**: As of October 8, 2025, the WTI crude oil main contract was quoted at $62.33/barrel, and the Brent crude oil main contract was quoted at $65.89/barrel. The US API data showed that the Cushing inventory decreased by 1.15 million barrels, and the overall inventory situation was still healthy. The OPEC meeting ended on October 5, with a final decision of a "principled low - speed production increase" of 137,000 barrels per day [1]. - **Strategy**: OPEC's hesitant attitude will suppress the upside space of oil prices, and crude oil is expected to remain volatile in the short term [1]. Methanol - **Market Information**: During the holiday, overseas crude oil first fell and then rose, with a slight overall decline. Most other commodities rose more than they fell. Before the holiday, the price in Taicang fell by 11 yuan, the price in Inner Mongolia rose by 5 yuan, and the price in southern Shandong remained flat. The 01 contract of the futures price fell by 31 yuan to 2328 yuan/ton, with a basis of - 86 yuan. The 1 - 5 spread changed by - 5 to - 34 [3]. - **Strategy**: The supply - side start - up has declined, and the enterprise profit is low. The domestic supply is expected to increase marginally. The demand - side port olefin plants have restarted and increased their loads, and the traditional demand has generally seen an increase in start - up, but the profit is still low. The overall demand has marginally improved. The inventory has decreased at a high level in ports and at a low level year - on - year in inland enterprises. It is recommended to focus on short - long opportunities on dips [3]. Urea - **Market Information**: During the holiday, the ex - factory price in Shandong remained stable, the ex - factory price in Henan fell by 20 yuan, and the market price generally continued the weak trend. Before the holiday, the 01 contract of the futures price rose by 7 yuan to 1670 yuan, with a basis of - 70 yuan. The 1 - 5 spread changed by + 4 to - 47 [5]. - **Strategy**: The futures price has stabilized at a low level. The domestic supply has returned, the start - up has increased significantly, and the enterprise profit is still low, with increased supply pressure. The demand for compound fertilizers has seen more shutdowns, and the agricultural demand is in the off - season, with general demand and weak market sentiment. The enterprise inventory continues to increase. It is recommended to focus on going long on dips at low prices [5]. Rubber - **Market Information**: During the holiday, commodities were generally positive. Japanese rubber and Singapore rubber rose slightly. In Thailand's spot market, the prices were mixed. The total inventory of natural rubber in China decreased marginally. The start - up load of all - steel tires in Shandong increased slightly, while that of semi - steel tires decreased slightly. The export orders of semi - steel tires slowed down, and the domestic sales market demand was weak [8][9][10]. - **Strategy**: The medium - term view is bullish, but it has broken down in the short term. It is recommended to set stop - losses and enter short - long positions opportunistically, and to partially re - establish the hedge position of buying RU2601 and selling RU2511 [12]. PVC - **Market Information**: The PVC01 contract fell by 57 yuan to 4839 yuan, the spot price of Changzhou SG - 5 was 4700 (- 30) yuan/ton, the basis was - 139 (+ 27) yuan/ton, and the 1 - 5 spread was - 320 (- 10) yuan/ton. The cost side remained stable, the overall start - up rate of PVC increased, the downstream start - up rate decreased, and the factory and social inventories increased [12]. - **Strategy**: The enterprise comprehensive profit has continued to decline, the valuation pressure has further decreased, the maintenance volume is small, the production is at a historical high, and new devices will be tested in the short term. The domestic downstream start - up has declined, the domestic demand is weak, and the export outlook is poor. It is recommended to focus on short - selling opportunities on rallies in the medium term [14]. Pure Benzene and Styrene - **Market Information**: The cost - side price of pure benzene in East China remained unchanged at 5885 yuan/ton, the spot price of styrene fell by 50 yuan to 6850 yuan/ton, the closing price of the active contract of styrene fell by 7 yuan to 6932 yuan/ton, the basis weakened, the BZN spread decreased, the non - integrated device profit of EB increased, and the spread between EB contracts decreased. The upstream start - up rate decreased, the port inventory in Jiangsu increased, and the demand - side start - up rate of three S decreased overall, except for ABS [16]. - **Strategy**: The spot and futures prices are falling, and the basis is weakening. The BZN spread has a large upward repair space. The cost - side supply is still abundant, the supply - side start - up of styrene continues to rise, the port inventory has increased significantly, and the demand - side start - up rate has decreased. The price of styrene may stop falling when the downstream starts to rise and the port inventory is depleted [17]. Polyethylene - **Market Information**: The closing price of the main contract of polyethylene rose by 18 yuan to 7181 yuan/ton, the spot price remained unchanged at 7160 yuan/ton, the basis weakened by 18 yuan to - 17 yuan/ton. The upstream start - up decreased, the production enterprise and trader inventories decreased, the downstream average start - up rate increased slightly, and the LL1 - 5 spread expanded [19]. - **Strategy**: The price may gap down at the opening due to the large decline in crude oil prices during the holiday. The cost side still has support, the spot price has fallen, the PE valuation has limited downward space, but the high number of warehouse receipts suppresses the price. The supply is limited, the inventory has decreased at a high level, the seasonal peak season may come, and the price may oscillate upward in the long term [20]. Polypropylene - **Market Information**: The closing price of the main contract of polypropylene rose by 3 yuan to 6903 yuan/ton, the spot price remained unchanged at 6795 yuan/ton, the basis weakened by 3 yuan to - 102 yuan/ton. The upstream start - up increased, the production enterprise and trader inventories decreased, the port inventory increased, the downstream average start - up rate increased, and the LL - PP spread expanded [22]. - **Strategy**: There is a large supply pressure, the downstream start - up rate rebounds seasonally at a low level. There is no prominent short - term contradiction, and the high number of warehouse receipts suppresses the price [23]. PX - **Market Information**: The PX11 contract fell by 100 yuan to 6570 yuan, the PX CFR rose by 3 dollars to 804 dollars, the basis increased by 32 yuan to 56 yuan, the 11 - 1 spread decreased by 16 yuan to 12 yuan. The PX load in China and Asia decreased slightly. Some domestic and overseas devices had maintenance or restart delays. The PTA load increased slightly, and the import volume of Korean PX to China decreased in mid - and early - September. The inventory increased in late August, and the PXN and naphtha crack spread increased [25]. - **Strategy**: The current PX load is high, the downstream PTA has many unexpected maintenance in the short term, the overall load center is low, and the expected inventory accumulation period continues. It is recommended to wait and see in the short term [26]. PTA - **Market Information**: The PTA01 contract fell by 58 yuan to 4594 yuan, the East China spot price fell by 55 yuan to 4535 yuan, the basis decreased by 8 yuan to - 63 yuan, the 1 - 5 spread increased by 6 yuan to - 40 yuan. The PTA load increased slightly, some devices had maintenance or restart, the downstream load increased, the terminal load increased, the social inventory increased slightly, and the spot and futures processing fees decreased [26]. - **Strategy**: The supply - side unexpected maintenance volume is still high, and the inventory depletion pattern continues. However, the processing fee space is limited. It is recommended to wait and see in the short term [27]. Ethylene Glycol - **Market Information**: The EG01 contract fell by 17 yuan to 4207 yuan, the East China spot price fell by 20 yuan to 4275 yuan, the basis increased by 1 yuan to 68 yuan, the 1 - 5 spread decreased by 12 yuan to - 75 yuan. The supply - side load increased slightly, some domestic and overseas devices had maintenance, restart, or load adjustment. The downstream load increased, the import arrival forecast was 234,000 tons, the East China departure was 13,600 tons on September 29, the port inventory decreased by 58,000 tons to 409,000 tons. The naphtha - based and domestic ethylene - based profits were negative, and the coal - based profit was positive. The cost side remained stable [28]. - **Strategy**: The domestic supply is high, and the port inventory is expected to be low in the short term but will turn to inventory accumulation in the fourth quarter. It is recommended to short on rallies under the weak outlook, but beware of the risk of the weak expectation not being realized [29].

Market Performance - The weekly trading volume slightly decreased, with the Shanghai Composite Index showing a minor increase, while the ChiNext Index rose nearly 2% for the week[2] - Growth styles continued to recover, particularly mid-cap growth, high volatility, and high beta stocks, which performed well[2] Trading Activity - The trading activity of dividend and low-valuation styles continued to rebound, while growth styles saw a slight pullback before rising again[2] - The crowding degree of micro-cap stocks continued to decline, indicating reduced congestion in this segment[2] Sector Analysis - Among primary sectors, oil and gas, food and beverage, and insurance remain at low crowding levels, suggesting potential opportunities[2] - The information technology and hardware sectors led the weekly performance within industry segments[2] Fund Performance - The fund-heavy index significantly outperformed the CSI 300 Index since the beginning of 2025, indicating strong institutional support for these stocks[2] - The top 50 fund-heavy stocks led the fund-heavy series indices, showcasing a robust performance relative to the broader market[2] Thematic Trends - The new tobacco and specialized innovation indices were among the top performers in thematic trading for the week[2]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Maintain the view of overweighting crude oil as the current oil price is undervalued, the fundamentals support the price, and if the geopolitical premium re - emerges, the oil price will have more upside potential [2] - For methanol, the overall fundamentals are improving marginally, and it is recommended to pay attention to short - long opportunities on dips [5] - Regarding urea, it is currently in a state of low valuation and weak drivers. It is suggested to pay attention to long positions on dips [8] - For rubber, maintain a medium - term bullish view. Temporarily wait and look for opportunities after the holiday. Those holding long positions during the holiday can consider a hedging strategy [12] - For PVC, the domestic supply is strong and demand is weak, and it is recommended to short on rallies [15] - For styrene, the price may stop falling as the seasonal peak season drives downstream operations and port inventories decline [19] - For polyethylene, the price may fluctuate upward as the long - term contradiction shifts and the seasonal peak season approaches [21] - For polypropylene, there is high inventory pressure in the short - term, and there is no prominent contradiction [24] - For PX, the inventory accumulation cycle may continue, and it is recommended to wait and see for now [28] - For PTA, the supply has unexpected maintenance, and the demand is under pressure. It is recommended to wait and see [30] - For ethylene glycol, it is recommended to short on rallies in the weak outlook, but beware of the risk of the weak expectation not being realized [33] 3. Summary by Related Catalogs Crude Oil Market Information - INE main crude oil futures rose 8.30 yuan/barrel, or 1.72%, to 490.60 yuan/barrel. High - sulfur fuel oil futures rose 37.00 yuan/ton, or 1.30%, to 2887.00 yuan/ton, and low - sulfur fuel oil futures rose 53.00 yuan/ton, or 1.56%, to 3450.00 yuan/ton [1] - US EIA weekly data showed changes in various oil inventories, including a 0.61 - million - barrel decrease in commercial crude oil inventories to 414.75 million barrels [1] Strategy Viewpoint - Maintain the view of overweighting crude oil as the current oil price is undervalued, the fundamentals support the price, and if the geopolitical premium re - emerges, the oil price will have more upside potential [2] Methanol Market Information - The price in Taicang dropped 3 yuan/ton, while Inner Mongolia and southern Shandong remained flat. The 01 contract on the futures market rose 5 yuan/ton to 2356 yuan/ton, with a basis of - 104 [4] - The 1 - 5 spread changed by - 4 to - 32, showing a low - level oscillation [4] Strategy Viewpoint - The supply - side production declined, and enterprise profits decreased. The domestic supply is expected to increase marginally. The demand - side port olefin plants restarted and the load increased. The overall demand improved marginally. The inventory decreased. It is recommended to pay attention to short - long opportunities on dips [5] Urea Market Information - Spot prices in Shandong and Henan remained stable, with a slight decline in some areas. The 01 contract on the futures market rose 1 yuan/ton to 1674 yuan/ton, with a basis of - 73 [7] - The 1 - 5 spread changed by - 2 to - 53 [7] Strategy Viewpoint - The futures price is at the lower edge of the weekly - level trend line. The domestic supply has recovered, and the demand is average. The market sentiment is weak, and enterprise inventories are rising. It is currently in a state of low valuation and weak drivers. It is suggested to pay attention to long positions on dips [8] Rubber Market Information - The rubber price was weak. The market expected a 62,000 - ton state reserve release. From September 16, 2025, the RU position structure changed. A super typhoon may have a positive impact, and the EU postponed the implementation of anti - deforestation laws [10] - As of September 18, 2025, the operating load of all - steel tire enterprises in Shandong was 64.96%, and that of semi - steel tire enterprises was 74.58%. As of September 14, 2025, the social inventory of natural rubber in China was 1235,000 tons [11] Strategy Viewpoint - Maintain a medium - term bullish view. Temporarily wait and look for opportunities after the holiday. Those holding long positions during the holiday can consider a hedging strategy [12] PVC Market Information - The PVC01 contract rose 28 yuan to 4919 yuan. The spot price of Changzhou SG - 5 was 4740 yuan/ton, with a basis of - 179 yuan/ton. The 1 - 5 spread was - 301 yuan/ton [14] - The overall operating rate of PVC was 77%, a 3% decrease. The downstream operating rate was 49.2%, a 1.7% increase. Factory inventory decreased by 0.4 million tons, and social inventory increased by 1.9 million tons [14] Strategy Viewpoint - The domestic supply is strong and demand is weak, and the export outlook is weak. It is recommended to short on rallies [15] Styrene Market Information - The cost - side pure benzene price remained unchanged at 5885 yuan/ton. The styrene spot price rose 50 yuan/ton to 6950 yuan/ton, and the active contract closed at 6958 yuan/ton, up 30 yuan/ton [18] - The upstream operating rate was 73.4%, a 1.6% decrease. Jiangsu port inventory increased by 2.75 million tons to 18.65 million tons. The downstream "Three S" weighted operating rate was 45.44%, a 0.46% increase [18] Strategy Viewpoint - The price may stop falling as the seasonal peak season drives downstream operations and port inventories decline [19] Polyethylene Market Information - The main contract closed at 7169 yuan/ton, up 27 yuan/ton. The spot price was 7175 yuan/ton, up 25 yuan/ton. The upstream operating rate was 80.73%, a 0.74% decrease [20] - The production enterprise inventory decreased by 3.20 million tons to 45.83 million tons, and the trader inventory decreased by 0.96 million tons to 5.10 million tons. The downstream average operating rate was 43%, a 0.08% increase [20] Strategy Viewpoint - The price may fluctuate upward as the long - term contradiction shifts and the seasonal peak season approaches [21] Polypropylene Market Information - The main contract closed at 6898 yuan/ton, up 21 yuan/ton. The spot price was 6795 yuan/ton, unchanged. The upstream operating rate was 77.05%, a 2.32% increase [23] - The production enterprise inventory decreased by 3.03 million tons to 52.03 million tons, the trader inventory decreased by 0.11 million tons to 18.72 million tons, and the port inventory increased by 0.47 million tons to 6.65 million tons. The downstream average operating rate was 51.45%, a 0.59% increase [23] Strategy Viewpoint - There is high inventory pressure in the short - term, and there is no prominent contradiction [24] PX Market Information - The PX11 contract rose 72 yuan to 6602 yuan. The PX CFR rose 9 dollars to 812 dollars. The Chinese PX load was 86.3%, a 1.5% decrease, and the Asian load was 78.2%, a 0.8% decrease [26] - PTA load was 75.9%, a 0.9% decrease. In September, South Korea's PX exports to China decreased by 5.6 million tons year - on - year. The inventory at the end of July decreased by 24 million tons month - on - month [27] Strategy Viewpoint - The inventory accumulation cycle may continue, and it is recommended to wait and see for now [28] PTA Market Information - The PTA01 contract rose 70 yuan to 4626 yuan. The East China spot price rose 55 yuan to 4525 yuan. The PTA load was 75.9%, a 0.9% decrease [29] - The downstream load was 91.4%, a 0.2% decrease. The social inventory on September 19 increased by 1.1 million tons [29] Strategy Viewpoint - The supply has unexpected maintenance, and the demand is under pressure. It is recommended to wait and see [30] Ethylene Glycol Market Information - The EG01 contract rose 22 yuan to 4234 yuan. The East China spot price rose 4 yuan to 4301 yuan. The supply - side operating rate was 73.8%, a 1.1% decrease [32] - The downstream load was 91.4%, a 0.2% decrease. The port inventory increased by 0.2 million tons to 46.7 million tons [32] Strategy Viewpoint - It is recommended to short on rallies in the weak outlook, but beware of the risk of the weak expectation not being realized [33]

Summary of Bulk Supply Chain Industry Research Industry Overview - The bulk supply chain industry has a low net profit margin, typically ranging from 0.5% to 0.6%, with state-owned enterprises enjoying significant advantages in funding rates, creating high barriers to entry [1][3][4] - The demand growth driven by urbanization in China allows leading companies to achieve continuous growth by increasing market share, demonstrating resilience through economic cycles [1][3] - Since 2025, commodity prices have stabilized or increased, coupled with anti-involution policies, which are expected to enhance the profitability elasticity of bulk supply chain companies [1][3][6] Core Competitiveness - Key competitive advantages of bulk supply chain companies include: - High dividend yields and low valuations (PE) [5][6] - Thin profit margins but significant profitability elasticity [5][6] - High entry barriers and advantages for state-owned enterprises [5][6] - Broad growth potential, with opportunities to increase market share [5][6] Business Model - Bulk supply chain companies operate on a light asset model, locking in upstream and downstream orders to mitigate price volatility risks and secure stable service fees [1][7] - They generate profits through capital advances and comprehensive logistics services, requiring bank loan support and utilizing futures to hedge risks [1][12] Market Trends - The bulk supply chain market in China is expected to show a trend of concentration among leading companies, which will leverage economies of scale to capture larger market shares over the next decade [1][16] - Despite the current low concentration in the market, leading companies are anticipated to achieve sustained growth and resilience through natural market share concentration [16][17] Financial Performance - The industry has experienced fluctuations in profit margins due to intensified competition, accounting standard changes, and improved resource turnover efficiency [14][15] - Companies like Xiamen Xiangyu have maintained net profit margins around 0.5% to 0.6%, indicating significant elasticity in profitability during favorable market conditions [3][5] Risk Management - Bulk supply chain companies employ various strategies to mitigate price risks, including collecting a 15% deposit from customers and using a combination of futures and spot contracts for hedging [13][24] - Effective risk management is crucial for long-term stability, especially given the low profit margins where any risk event can significantly impact net profits [25] Recent Developments - In the first half of 2025, the profitability of bulk supply chain companies showed improvement, with some companies achieving approximately 30% year-on-year growth through volume increases and customer structure optimization [30][31] - Companies have adapted to industry downturns by lowering service fees for quality clients and focusing resources on stronger operational partners to enhance stability and profitability [29][30] Future Outlook - The bulk supply chain industry is expected to continue evolving towards modernization and specialization, enhancing risk control and capital management [11][26] - The market remains promising, with opportunities for leading companies to expand overseas and optimize customer structures to recover and enhance profitability [31][32]

Core Insights - The company is positioned as a low-valuation, high-dividend quality stock, with a recovery in momentum under supply-demand rebalancing and moderate raw material prices [1] - The company has a strong customer base and is expected to leverage its mature overseas production capacity to secure more orders in the future [1] Company Overview - The company has over 20 years of experience in elastic fabric and a stable management team [1] - Currently, 55.4% of the company's revenue comes from sports fabrics, with established partnerships with renowned brands such as ARC'TERYX, Lululemon, NIKE, adidas, Anta, and Li Ning [1] - The company has mature production capacities in China, Vietnam, and Sri Lanka, with overseas factory space comparable to domestic facilities [1] Financial Analysis - The company’s revenue CAGR from 2011 to 2024 is projected at +10.4%, with sports fabric revenue CAGR leading at +38.2% [2] - Gross margins are influenced by capacity utilization and crude oil prices, with expectations for margin improvement due to mature overseas capacity and favorable raw material price trends [2] - The company maintains stable expense ratios and has shown improved operational efficiency, with robust operating cash flow [2] Industry Insights - The sportswear segment is growing faster than other apparel categories, benefiting elastic fabric suppliers due to increased demand for features like elasticity, breathability, and antibacterial properties [2] - The underwear market is expected to maintain steady growth, with simple and comfortable designs replacing traditional lace and underwire options [2] - The company is a leading player in elastic fabric production, having accumulated advantages over traditional knitted fabric manufacturers, though there is still room for improvement compared to industry leaders in elastic fabrics [2] Future Outlook - The company is recognized as a low-valuation, high-dividend quality stock, with a consistent dividend payout since its listing and a stable dividend ratio of 50% in recent years, achieving a dividend yield of over 9% for four consecutive years [2] - The company is expected to benefit from its mature production capacities in Vietnam and Sri Lanka, allowing it to capture more orders as brands adjust their production strategies [2] - The company has established long-term partnerships with well-known sports and outdoor brands, with expectations for continued order flow as collaborations deepen [2]

Investment Rating - The report assigns a rating of "Buy" for the company [2]. Core Views - The company is considered a high-quality target with low valuation and high dividends, showing potential for growth due to a favorable supply-demand rebalancing and moderate raw material prices [3]. - The company has a strong customer base and is expected to leverage its mature overseas production capacity to secure more orders in the future [3]. Financial Summary - The projected total revenue for 2024 is HKD 5,061 million, with a year-on-year growth of 20.5%. The net profit attributable to the parent company is expected to be HKD 608 million, reflecting a significant increase of 75.3% [5]. - The company’s PE ratio is projected to be 4.80 in 2024, indicating a low valuation compared to historical averages [5]. Company Overview - The company has over 20 years of experience in elastic fabric production and has established itself as a leader in the lingerie materials market, providing comprehensive procurement solutions for well-known brands [16]. - The company has successfully transitioned to become a significant supplier of sports fabrics, with major clients including ARC'TERYX, NIKE, and adidas [16][27]. Growth Drivers - The company’s revenue has shown a compound annual growth rate (CAGR) of 10.4% from 2011 to 2024, with sports fabric revenue growing at a CAGR of 38.2%, outpacing other categories [44]. - The demand for sports apparel is expected to continue growing, benefiting elastic fabric suppliers as consumer health awareness increases [59]. Future Outlook - The company is well-positioned to benefit from the adjustment of production capacity under new trade dynamics, with a focus on high-quality clients and long-term partnerships [11]. - The company has maintained a stable dividend payout ratio of around 50%, with a dividend yield exceeding 9% for four consecutive years [11].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Maintain the view of overweighting crude oil as the current oil price is relatively undervalued, and the fundamental factors will support the current price. If the geopolitical premium re - emerges, the oil price will have more upside potential [2] - For methanol, expect the fundamental situation to gradually improve, and suggest paying attention to long - position opportunities at low prices and 1 - 5 positive spread opportunities [4] - For urea, due to weak demand and high inventory, the price is expected to move within a range, and it is recommended to consider long - position opportunities at low prices [6] - For rubber, maintain a long - term bullish view, and suggest waiting and seeing in the short term as it follows the trend of industrial products [11] - For PVC, due to strong supply, weak demand, and high valuation, it is recommended to consider short - position opportunities at high prices, but beware of short - covering rallies [13] - For pure benzene and styrene, it is recommended to go long on the pure benzene US - South Korea spread at low prices, and the styrene price may rebound when the inventory drawdown inflection point appears [16] - For polyethylene, expect the price to oscillate upwards in the long term, and suggest waiting and seeing in the short term [18] - For polypropylene, due to high inventory pressure and no prominent short - term contradictions, it is recommended to wait and see [19] - For PX, due to lack of upward drivers, it is recommended to wait and see in the short term and pay attention to the subsequent improvement in the terminal market [22] - For PTA, due to high unexpected maintenance and weak long - term outlook, it is recommended to wait and see [23] - For ethylene glycol, due to high supply and expected inventory build - up in the fourth quarter, it is recommended to go short at high prices, but beware of the risk of the weak expectation not being realized [24] 3. Summary by Related Catalogs Crude Oil - **Market Quotes**: INE's main crude oil futures rose 5.60 yuan/barrel, or 1.15%, to 493.60 yuan/barrel; high - sulfur fuel oil rose 8.00 yuan/ton, or 0.29%, to 2795.00 yuan/ton; low - sulfur fuel oil rose 42.00 yuan/ton, or 1.25%, to 3395.00 yuan/ton [1] - **Data**: In the weekly data of Fujeirah Port's oil products, gasoline inventory decreased by 1.94 million barrels to 6.07 million barrels, a 24.26% decrease; diesel inventory decreased by 0.18 million barrels to 1.82 million barrels, an 8.79% decrease; fuel oil inventory decreased by 0.67 million barrels to 6.32 million barrels, a 9.58% decrease; total refined oil inventory decreased by 2.79 million barrels to 14.21 million barrels, a 16.41% decrease [1] Methanol - **Market Quotes**: On September 16, the 01 contract fell 21 yuan/ton to 2375 yuan/ton, and the spot price fell 3 yuan/ton, with a basis of - 83 [4] - **Fundamentals**: The high - inventory pattern at ports remains unchanged, and the market structure is still weak, but most of the negative factors have been priced in. Supply is sufficient, and demand is expected to improve marginally. The inventory at ports has reached a new high, while the inventory of inland enterprises is relatively low [4] - **Strategy**: Consider long - position opportunities at low prices and 1 - 5 positive spread opportunities [4] Urea - **Market Quotes**: On September 16, the 01 contract rose 3 yuan/ton to 1686 yuan/ton, and the spot price rose 10 yuan/ton, with a basis of - 46 [6] - **Fundamentals**: Domestic enterprise inventory is slowly rising, and the overall inventory level is high. Agricultural demand is in the off - season, and compound fertilizer production has rebounded but is still in the seasonal decline stage. Demand is weak, and exports provide limited support [6] - **Strategy**: Consider long - position opportunities at low prices [6] Rubber - **Supply**: The expected rainfall in Thailand in the next 7 days is decreasing, reducing the positive supply factors [8] - **Market Sentiment**: Bulls believe in limited rubber production growth, seasonal price increases, and improved demand in China; bears are concerned about uncertain macro - expectations, seasonal weak demand, and less - than - expected supply benefits [9] - **Industry Conditions**: As of September 11, 2025, the operating rate of all - steel tires in Shandong increased both week - on - week and year - on - year, while the operating rate of semi - steel tires increased week - on - week but decreased year - on - year. The export expectation has declined. As of September 7, 2025, China's natural rubber social inventory decreased [10] - **Spot Prices**: Thai standard mixed rubber was at 15100 (0) yuan, STR20 was at 1865 (+10) dollars, and STR20 mixed was at 1865 (0) dollars [11] - **Strategy**: Adopt a long - term bullish view and wait and see in the short term [11] PVC - **Market Quotes**: The PVC01 contract rose 39 yuan to 4960 yuan, the spot price of Changzhou SG - 5 was 4790 (+50) yuan/ton, the basis was - 170 (+11) yuan/ton, and the 1 - 5 spread was - 301 (+2) yuan/ton [13] - **Cost**: The price of calcium carbide in Wuhai increased, the price of semi - coke remained unchanged, the price of ethylene remained unchanged, and the price of caustic soda decreased [13] - **Supply and Demand**: The overall operating rate increased, and the downstream operating rate also increased. Factory inventory decreased, while social inventory increased. Enterprises' comprehensive profits are at a high level for the year, and the valuation pressure is large [13] - **Strategy**: Consider short - position opportunities at high prices, but beware of short - covering rallies [13] Pure Benzene and Styrene - **Market Quotes**: Spot and futures prices rose, and the basis strengthened. The BZN spread is at a relatively low level for the same period, with significant upward correction potential [15][16] - **Fundamentals**: The cost - side pure benzene production is fluctuating moderately, and the supply is still abundant. The supply - side ethylbenzene dehydrogenation profit has increased, and the benzene - ethylene production has been continuously increasing. The port inventory of benzene - ethylene has been significantly decreasing, and the demand - side three - S overall operating rate is fluctuating downward [16] - **Strategy**: Go long on the pure benzene US - South Korea spread at low prices [16] Polyethylene - **Market Quotes**: The futures price rose. The market is expecting favorable policies from the Chinese Ministry of Finance in the third quarter, and cost support remains [18] - **Supply and Demand**: There are only 400,000 tons of planned production capacity left. The overall inventory is decreasing from a high level, and the demand - side agricultural film raw material procurement has started. The long - term contradiction has shifted from cost - driven price decline to South Korean ethylene clearance policy [18] - **Strategy**: Wait and see in the short term [18] Polypropylene - **Market Quotes**: The futures price rose. The supply - side still has 1.45 million tons of planned production capacity, and the pressure is high [19] - **Supply and Demand**: The demand - side downstream operating rate has rebounded from a seasonal low. The overall inventory pressure is high, and there are no prominent short - term contradictions [19] - **Strategy**: Wait and see [19] PX - **Market Quotes**: The PX11 contract rose 10 yuan to 6762 yuan, and the PX CFR price fell 2 dollars to 834 dollars. The basis was 66 yuan (- 29), and the 11 - 1 spread was 42 yuan (- 4) [21] - **Supply**: The operating rate in China and Asia has increased. Some domestic and overseas plants have increased production or restarted [21] - **Demand**: The PTA operating rate has increased, and some plants have restarted [21] - **Inventory**: The inventory decreased month - on - month at the end of July [21] - **Valuation**: The PXN is 228 dollars (- 6), and the naphtha cracking spread is 114 dollars (+6) [21] - **Strategy**: Wait and see in the short term and pay attention to the subsequent improvement in the terminal market [22] PTA - **Market Quotes**: The PTA01 contract rose 16 yuan to 4688 yuan, the East China spot price rose 10 yuan to 4610 yuan, the basis was - 80 yuan (0), and the 1 - 5 spread was - 46 yuan (- 2) [23] - **Supply**: The operating rate increased, and some plants restarted. Unexpected maintenance is still high, and the de - stocking pattern continues [23] - **Demand**: The downstream operating rate increased slightly, and the terminal draw - texturing and weaving operating rates remained unchanged [23] - **Inventory**: Social inventory decreased in early September [23] - **Valuation**: The spot processing fee and the futures processing fee both increased [23] - **Strategy**: Wait and see [23] Ethylene Glycol - **Market Quotes**: The EG01 contract fell 16 yuan to 4272 yuan, the East China spot price rose 7 yuan to 4385 yuan, the basis was 91 yuan (- 11), and the 1 - 5 spread was - 50 yuan (- 5) [24] - **Supply**: The overall operating rate increased, with the synthetic gas - based operating rate increasing significantly. Some domestic and overseas plants had production changes [24] - **Demand**: The downstream operating rate increased slightly, and the terminal draw - texturing and weaving operating rates remained unchanged [24] - **Inventory**: The port inventory increased, and the import arrival forecast is 94,000 tons [24] - **Valuation**: The profit of naphtha - based production is - 645 yuan, the profit of domestic ethylene - based production is - 792 yuan, and the profit of coal - based production is 812 yuan [24] - **Strategy**: Go short at high prices, but beware of the risk of the weak expectation not being realized [24]