Group 1 - The central government has increased its holdings in the chemical ETF, with the largest holder owning 248 million shares, accounting for 10.02% of the ETF's total shares [1] - The social security fund holds over 6 billion in the chemical sector, leading the industry, with a total market value of 33.2 billion across 129 stocks [2] - The chemical sector is experiencing a resurgence, with expectations of improved conditions due to the reduction of excessive competition and capacity in certain sub-industries [4] Group 2 - The chemical ETF has seen significant growth in scale, increasing from 1.8 billion to 12 billion since mid-July, indicating a strong investment preference for this sector [5] - The chemical industry is at a critical point for inventory cycles, with potential demand recovery expected to impact production rates positively [4] - The current market conditions suggest that the chemical sector may outperform the broader market, particularly as PPI trends show signs of recovery [4]

Market Overview - On August 22, A-shares saw all three major indices rise, with the Shanghai Composite Index up 1.45% to 3825.76 points, the Shenzhen Component Index up 2.07%, and the ChiNext Index up 3.36% [1] - The STAR Market 50 Index experienced the most significant increase, rising by 8.59% [1] - The total trading volume in the Shanghai and Shenzhen markets reached 25,467 billion RMB, showing a slight increase compared to the previous trading day [2] Sector Performance - The electronic, communication, and computer sectors led the gains, with increases of 4.82%, 3.77%, and 3.50% respectively [5] - Conversely, the banking, textile and apparel, and coal sectors saw declines of -0.30%, -0.20%, and -0.15% respectively [5] Semiconductor Sector - Nvidia's request for some suppliers to halt production of H20 chips tailored for the Chinese market led to a surge in semiconductor stocks, with the semiconductor ETF (159813) rising by 10% [5] - Analysts noted that the national commitment to technological self-reliance remains unchanged, and domestic leading companies are expected to accelerate iterations to overcome overseas restrictions [5] Securities Sector - The Shanghai Composite Index broke through the 3800-point mark, reaching its highest level since August 20, 2015, with the leading securities ETF (159993) rising by 3.99% [7] - Huatai Securities reported a significant increase in market trading activity and new account openings since the beginning of the year, indicating a recovery phase for securities firms [7] Chemical Sector - The chemical sector showed strength, with significant inflows into the chemical ETF (159870), which saw over 10 billion RMB in subscriptions over two consecutive days [8] - Analysts highlighted the potential for a rebound in the chemical sector as inventory cycles restart, with the possibility of structural demand surges [9] Investment Products - Key investment products include the semiconductor ETF (159813) and the chemical ETF (159870), which are positioned to benefit from current market trends [10][11]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The current oil price is relatively undervalued, and its static fundamentals and dynamic forecasts are still favorable. It is a good time for left - hand side layout. If the geopolitical premium re - emerges, the oil price will have more upside potential [2] - For methanol, the current situation is weak, but demand is expected to improve with the arrival of the peak season. It is recommended to wait and see [4] - For urea, the current situation is weak, but the downside space is limited due to low corporate profits. It is advisable to pay attention to long - position opportunities on dips [6] - For rubber, it is expected that the rubber price will fluctuate weakly, and it is recommended to wait and see. Partial closing of the long RU2601 and short RU2509 positions can be considered [11] - For PVC, the fundamentals are poor with strong supply, weak demand, and high valuation. It is recommended to wait and see [13] - For styrene, the BZN spread may be repaired, and the port inventory may decline from a high level. The styrene price may fluctuate upward following the cost side [15][16] - For polyethylene, the price may fluctuate upward, with the long - term contradiction shifting from cost - driven decline to South Korean ethylene clearance policy [18] - For polypropylene, there is high inventory pressure in the context of weak supply and demand. It is recommended to go long on the LL - PP2601 contract on dips [19] - For PX, it is expected to maintain low inventory, with support at the lower end of the valuation but limited upside in the short term. Pay attention to long - position opportunities following the oil price on dips during the peak season [21][22] - For PTA, the supply is in a de - stocking pattern, and the processing fee is expected to be repaired. Pay attention to long - position opportunities following PX on dips [23] - For ethylene glycol, the fundamentals are expected to turn from strong to weak, and there is downward pressure on the medium - term valuation [24] 3. Summaries According to Relevant Catalogs 3.1 Energy (Crude Oil) - **Market Quotes**: WTI main crude oil futures rose $0.34, or 0.54%, to $63.48; Brent main crude oil futures rose $0.63, or 0.94%, to $67.67; INE main crude oil futures rose 8.80 yuan, or 1.85%, to 484.7 yuan [1] - **Data**: Singapore ESG weekly oil product data showed that gasoline inventory increased by 0.91 million barrels to 15.15 million barrels, a 6.42% increase; diesel inventory increased by 0.37 million barrels to 9.70 million barrels, a 3.98% increase; fuel oil inventory decreased by 1.61 million barrels to 23.04 million barrels, a 6.53% decrease; total refined oil inventory decreased by 0.33 million barrels to 47.89 million barrels, a 0.67% decrease [1] 3.2 Methanol - **Market Quotes**: On August 21, the 01 contract rose 1 yuan/ton to 2425 yuan/ton, and the spot price rose 5 yuan/ton, with a basis of - 115 [4] - **Supply**: Coal prices have bottomed out and risen, increasing methanol costs, but coal - to - methanol profits are still at a high level compared to the same period. Domestic production starts are gradually bottoming out and increasing, and overseas plant starts have returned to the same - period high, with imports expected to increase [4] - **Demand**: Most traditional demand sectors have low profits. Olefin profits have improved, but port production starts are low, and demand is weak. It is necessary to pay attention to the actual demand during the "Golden September and Silver October" [4] 3.3 Urea - **Market Quotes**: On August 21, the 01 contract fell 12 yuan/ton to 1764 yuan/ton, and the spot price fell 20 yuan/ton, with a basis of - 24 [6] - **Supply**: Domestic production starts have changed from a decline to an increase. Although corporate profits are still low, they are expected to gradually bottom out and recover. The overall supply is relatively loose [6] - **Demand**: Domestic agricultural demand is ending and entering the off - season. Compound fertilizer production starts have further increased, with high finished product inventories. Exports are progressing steadily, and overall demand is average [6] 3.4 Rubber - **Market Quotes**: NR and RU prices declined and then fluctuated weakly [8] - **Supply and Demand Factors**: Bulls believe that the weather and rubber forest conditions in Southeast Asia, especially Thailand, may help increase rubber production to a limited extent, and the seasonal pattern usually turns upward in the second half of the year, with improved demand expectations in China. Bears think that macro expectations are uncertain, demand is in the seasonal off - season, and the positive impact on supply may be less than expected [9] - **Inventory and Production Starts**: As of August 21, 2025, the operating load of all - steel tires in Shandong tire enterprises was 64.54%, up 1.47 percentage points from the previous week and 6.25 percentage points from the same period last year. The operating load of semi - steel tires in domestic tire enterprises was 74.38%, up 2.13 percentage points from the previous week and down 4.28 percentage points from the same period last year. As of August 10, 2025, China's natural rubber social inventory was 127.8 tons, a decrease of 1.1 tons or 0.85% from the previous period [10] 3.5 PVC - **Market Quotes**: The PVC01 contract fell 4 yuan to 5004 yuan. The spot price of Changzhou SG - 5 was 4740 (+20) yuan/ton, with a basis of - 264 (+24) yuan/ton, and the 9 - 1 spread was - 132 (+5) yuan/ton [13] - **Supply and Demand**: The overall production start of PVC was 80.3%, up 0.9% from the previous period. The downstream demand start was 42.8%, down 0.1% from the previous period. Factory inventory was 32.7 tons (-1), and social inventory was 81.2 tons (+3.5). The supply is strong, demand is weak, and the valuation is high [13] 3.6 Styrene - **Market Quotes**: The spot price and futures price of styrene both increased, and the basis strengthened [15] - **Supply and Demand**: The cost side still has support, the BZN spread is at a relatively low level in the same period, with large upward repair space. The supply side has increasing production starts, and the port inventory has been continuously increasing significantly. At the end of the seasonal off - season, the demand side's overall operating rate of three S products has been rising [15][16] 3.7 Polyolefins 3.7.1 Polyethylene - **Market Quotes**: The futures price of polyethylene increased [18] - **Supply and Demand**: The market expects favorable policies from the Chinese Ministry of Finance in the third quarter, and the cost side has support. The overall inventory is declining from a high level, and the demand side's agricultural film raw material procurement has started, with the overall operating rate stabilizing at a low level [18] 3.7.2 Polypropylene - **Market Quotes**: The futures price of polypropylene decreased [19] - **Supply and Demand**: The profit of Shandong refineries has stopped falling and rebounded, and the production start is expected to gradually recover. The downstream demand operating rate is fluctuating at a low level. There is high inventory pressure in the context of weak supply and demand [19] 3.8 PX, PTA, and MEG 3.8.1 PX - **Market Quotes**: The PX11 contract rose 114 yuan to 6958 yuan, and the PX CFR rose 17 dollars to 854 dollars [21] - **Supply and Demand**: The PX load is at a high level, and there are many unexpected short - term maintenance of downstream PTA. However, due to the commissioning of new PTA plants, PX is expected to maintain low inventory [21] 3.8.2 PTA - **Market Quotes**: The PTA01 contract rose 82 yuan to 4860 yuan, and the East China spot price rose 120 yuan/ton to 4810 yuan [23] - **Supply and Demand**: The PTA load decreased by 4.8% to 71.6%. The downstream load increased by 0.6% to 90%. The supply is in a de - stocking pattern, and the processing fee is expected to be repaired [23] 3.8.3 MEG - **Market Quotes**: The EG01 contract fell 4 yuan to 4473 yuan, and the East China spot price rose 4 yuan to 4511 yuan [24] - **Supply and Demand**: The MEG load increased by 6.2% to 73.2%. The downstream load increased by 0.6% to 90%. The port inventory decreased by 0.6 tons to 54.7 tons. The fundamentals are expected to turn from strong to weak, and there is downward pressure on the medium - term valuation [24]

Summary of Conference Call on Black Industry Chain Industry Overview - The black industry chain has seen a significant reduction in the premium from anti-involution, with materials like polysilicon and lithium carbonate entering a period of expected adjustment, necessitating attention to steel demand in Q4 to avoid downward risks [1][2] - Iron ore has shown strong resistance to declines, but its sustainability is questionable if steel demand expectations are weak [1][5] - Coal production recovery post-inspection and the rapid increase in sea and Mongolian coal imports are critical factors to monitor [1][5] Key Points and Arguments Steel Market - Steel inventory is currently low, and the peak season demand has yet to be validated, leading to a gradual accumulation of inventory [1][9] - Price fluctuations are influenced by downstream replenishment willingness; lower prices encourage buying, while higher prices face resistance [1][9] - The forecast for rebar prices in Q3 and Q4 is between 3,100 to 3,400 RMB, with hot-rolled steel expected to be 100 RMB higher [3][25] Coal Market - The core driver for coking coal is policy regulation; without production limits, output may continue to rise, leading to potential oversupply [1][6] - The daily consumption of thermal coal is nearing its peak, with improving import volumes and domestic supply recovering to high levels, indicating potential price weakness ahead [1][7] - The Xinjiang overproduction issue is a significant concern for the coal market [1][8] Iron Ore Market - The iron ore market is expected to remain balanced, with port inventories projected to rise to 150 million tons by year-end [3][23] - The equilibrium price for iron ore is estimated around 240 USD, with fluctuations expected based on demand conditions [12] Future Outlook - The overall sentiment for Q4 is cautious, with potential for a weak market due to insufficient consumption drivers and weakening realities [1][28] - The steel export market is performing well, driven by the Belt and Road Initiative and domestic cost advantages, with a projected increase in exports of 1.3 to 1.5 million tons [20][21] - The focus for investment strategies should be on raw materials, particularly coking coal, as the market navigates through potential negative feedback loops [1][28][29] Additional Important Insights - The impact of recent policies, such as consumer loan interest subsidies, is expected to stimulate some demand but overall internal demand growth remains limited [19] - The black industry chain's performance is increasingly influenced by macroeconomic factors rather than fundamental supply-demand dynamics [13][17] - The market is currently characterized by a cautious approach, with a need for new expectations to drive price movements [1][30]

Group 1: Social Security Fund Holdings - As of August 21, the Social Security Fund holds 129 stocks with a total market value of 33.2 billion yuan [1] - The top ten stocks by market value include Changshu Bank, Pengding Holdings, Haida Group, and Wanhua Chemical [1] - The chemical sector has the highest market value among the holdings, reaching 6 billion yuan [1] Group 2: Chemical Sector Dynamics - The chemical sector is experiencing a resurgence, with stocks like titanium dioxide and nitrogen fertilizers seeing significant price increases [3] - Central China Securities indicates that the rectification of overcapacity in the chemical industry may lead to a phase of improved market conditions [3] - The chemical industry is under pressure from both supply and demand, with some products showing high operating rates but low profitability [3][4] Group 3: Inventory Cycle and Market Trends - The past two years have seen a significant reduction in inventory cycles due to overseas de-stocking and domestic economic challenges [4] - The industry is at a critical point for restarting the inventory cycle, with potential demand recovery expected to impact chemical products positively [4] - Recent inflows into chemical ETFs indicate a growing investor preference for specific sectors, reflecting a shift in market sentiment [4]

Group 1: Non-ferrous Metals - In July, rare earth product exports reached a record high for the year at 6,422 tons, a month-on-month increase of 69%, with magnets being the dominant product [1] - The price of praseodymium and neodymium oxide exceeded 600,000 yuan per ton, and the rare earth index rose by 6% in a single day [1] - Supply constraints are expected due to increased uncertainty in Myanmar mineral imports and a closure of the U.S. mineral window, potentially reducing annual imports by 40,000 tons (10%) [1] - Domestic indicators continue to be strictly controlled, and the supply of scrap materials is unlikely to increase in the short term due to price inversions [1] - Demand for magnetic materials has rebounded, with exports in June reaching 3,000 tons, and major companies have robust overseas orders [1] - The traditional peak season for new energy vehicles, wind power, and variable frequency air conditioners is expected to drive inventory restocking, with prices likely to continue rising in Q3 [1] Group 2: Semiconductor/Chip Industry - The domestic localization rate for semiconductor equipment and materials is increasing, with Yangtze Memory Technologies and Changxin Memory's localization targets raised to 80% and 70%, respectively [2] - Huahong's acquisition of Huali's five factories is expected to increase annual revenue by 25% and net profit by 187%, with depreciation nearly complete, indicating room for revaluation [2] - Cambrian's 4 billion yuan private placement is expected to be completed within two months after approval, with domestic computing power gradually being "unlocked" as SMIC's processes advance [2] Group 3: AI Computing Chips - Haiguang Information is the only domestic company with both CPU and GPU capabilities, showing significant underlying synergy [3] - Jingjia Micro plans to take a controlling stake in Chengheng Micro, focusing on military drones and missiles while also developing software stacks for civilian clients [3] - Aibulu has increased its stake in Zhonghao Xinying to nearly 10%, with the latter's AI TPU performance exceeding NVIDIA's by 1.5 times, leading to a full transformation into AI chips [3] Group 4: Media and Broadcasting - The regulatory environment for the film and television industry has been significantly relaxed, allowing for the potential certification of backlog dramas [4] - The resumption of nationwide talent shows is marked by Mango Super Media's upcoming launch of "Voice of the Future," which aims to replicate the success of "Super Girl" [4] Group 5: Chemical Industry - The domestic market is at a critical point of restarting the inventory cycle, with U.S. durable goods inventory expected to return to positive year-on-year growth [5] - A reversal in overseas inventory cycles could lead to a demand explosion in certain sectors, with significant elasticity in chemical products [5] Group 6: Pharmaceuticals - Novo Nordisk's semaglutide has been approved in the U.S. for treating F2-F3 stage MASH, marking a significant milestone for GLP-1 drugs in the liver disease market [6] - This approval establishes GLP-1's foundational role in MASH treatment and highlights the potential for multi-target therapies, providing new valuation anchors for domestic companies with differentiated pipelines [6] Group 7: Optical Communication Switches - Lumentum and Coherent have reported revenue from OCS optical switches, indicating a shift from proprietary use by companies like Google to commercial viability [7] - This development validates OCS technology as a feasible next-generation data center network architecture, with upstream core component manufacturers expected to benefit first [7]

Group 1 - The core index of Shanghai Composite Index rose by 0.20% to 3690.88 points on August 14 [1] - The liquor sector closed at 2231.73 points, with a slight increase of 0.06%, and 17 liquor stocks experienced gains, with JiuGuiJiu leading at 3.24% [1] - Individual stock performance included Kweichow Moutai closing at 1430.04 CNY per share, up 0.70%; Wuliangye at 123.46 CNY, up 0.22%; Shanxi Fenjiu at 188.95 CNY, up 0.46%; and Luzhou Laojiao at 125.80 CNY [1] Group 2 - Guotai Junan Securities highlighted that the inventory cycle is fundamentally about the rebalancing of supply and demand, indicating that the bottoming process requires passing through inventory bottom, performance bottom, and channel profit bottom in that order [1]

Core Viewpoint - The article discusses the performance of the liquor sector, particularly high-end liquor stocks, amidst a broader market context, indicating a potential recovery in the industry by 2026 [1] Market Performance - On August 14, the Shanghai Composite Index rose by 0.20% to 3690.88 points - The liquor sector closed at 2231.73 points, up 0.06%, with 17 liquor stocks increasing in value, led by Jiu Gui Jiu with a rise of 3.24% [1] Individual Stock Performance - Kweichow Moutai closed at 1430.04 CNY per share, up 0.70% - Wuliangye closed at 123.46 CNY per share, up 0.22% - Shanxi Fenjiu closed at 188.95 CNY per share, up 0.46% - Luzhou Laojiao closed at 125.80 CNY per share, up 0.03% - Yanghe Brewery closed at 70.25 CNY per share, up 1.99% [1] Industry Analysis - Guotai Junan Securities notes that the inventory cycle is fundamentally about the rebalancing of supply and demand - The analysis suggests that the industry is currently at the channel bottom, moving towards the performance bottom and inventory bottom - It is predicted that the industry will likely confirm the performance bottom and inventory bottom by 2026, which may relieve pressure on the sector [1]

Investment Rating - The report maintains a "Positive" investment rating for the textile, apparel, and luxury goods industry [12]. Core Insights - The inventory cycle is a significant phenomenon in economic operations, reflecting changes in market supply and demand relationships and companies' adaptability to market environments. The cycle typically consists of four stages: proactive restocking, passive accumulation, proactive destocking, and passive destocking. The transition from proactive destocking to proactive restocking is expected to catalyze stock prices and valuation levels for brand companies [3][6]. - The textile and apparel industry generally experiences a cycle of destocking to restocking or accumulation lasting 1-3 years. Currently, the accumulation phase has persisted for over a year. With stable retail growth and favorable policies, it is anticipated that the industry will enter a destocking phase by Q3 2025, leading to potential upward movement in stock prices and valuations [8][9]. Summary by Sections Inventory Cycle Overview - The inventory cycle can be divided into four stages: proactive restocking, passive accumulation, proactive destocking, and passive destocking. Key indicators include GDP growth, apparel retail growth, and inventory year-on-year (yoy) changes, which reflect demand conditions and inventory trends [6][20]. - The report identifies four notable destocking to restocking phases from 2012 to present: Q4 2014 to Q1 2016, Q3 2017 to Q1 2019, Q2 2020 to Q4 2022, and Q1 2023 to Q1 2025 [23][26]. Current Inventory Cycle Status - The current inventory situation is relatively controllable, with significant inventory clearance achieved in 2023. Although retail performance has been weak since Q2 2024, overall inventory levels remain healthy. The future progress of the inventory cycle will depend on terminal retail performance [9][10]. - Retail levels are stable, with a reported 1.9% year-on-year increase in sales for clothing and footwear in June 2025. Despite some fluctuations, the retail sector is expected to improve gradually, particularly in H2 2025 [9][10]. Brand Performance and Market Outlook - The report highlights that the brand sector typically experiences a beta market phase during the late proactive destocking to passive destocking stages, correlating closely with retail growth trends. The retail sector is expected to stabilize in Q3 2024, with potential improvements in Q1 2025 as the base effects diminish [9][10]. - The sportswear sector is currently experiencing a weak beta market, with domestic brands expected to outperform international counterparts. The demand for functional and specialized products remains weak, leading brands to seek new market channels and product categories [10].

Investment Rating - The report maintains a "Positive" investment rating for the textile, apparel, and luxury goods industry [11]. Core Insights - Revenue performance in Q1 2025 shows divergence among brands, with On (+40%) and Adidas (+13%) performing well, while Nike (-7%) and Under Armour (-11%) face revenue declines due to weak demand and inventory adjustments [6][20]. - The cautious revenue guidance from key companies indicates a continuation of this divergent performance in upcoming quarters, with some brands canceling their full-year guidance [7][25]. - The industry is entering a replenishment phase, but weak end-consumer demand necessitates close monitoring of recovery trends [9][34]. Revenue Performance - In Q1 2025, On and Adidas exhibited strong revenue growth, while Nike and UA struggled with declines [6][18]. - The overall revenue growth rates varied significantly across regions, with North America and Greater China showing relative weakness [20][22]. Inventory Dynamics - The apparel industry has returned to a healthy inventory level but is now entering a replenishment phase, with some brands beginning to accumulate stock [8][9]. - Retailers' inventory-to-sales ratios are normal, but certain brands are still in a destocking phase, particularly Nike and VF [8][9]. Future Outlook - The report emphasizes the need to monitor the pace of consumer demand recovery, especially as the industry faces challenges from weak demand and inflationary pressures [9][34]. - Nike's gradual operational improvement may alleviate some negative pressures on the industry, suggesting potential for a rebound in the manufacturing sector [9][34].