Investment Rating - The industry investment rating is maintained at "Neutral" as of July 16, 2025 [2]. Core Insights - The current cycle is nearing its end, with expectations for demand recovery. Infrastructure and export demand are expected to remain robust in 2024, while the real estate cycle continues to decline. The consumption sector has shown resilience after two years of recovery [4]. - On the supply side, global chemical capital growth is projected to turn negative in 2024. Domestic construction projects are seeing a rapid decline, nearing a bottom by Q2 2024, while fixed asset investments maintain a growth rate exceeding 15% [4]. - The chemical industry is entering a replenishment phase after a year of destocking, with inventory growth turning positive by Q3 2024. However, the overall price and profit levels in the chemical industry are expected to face pressure throughout the year [4]. Summary by Sections Industry Valuation and Economic Indicators - The report tracks various indicators including the chemical industry's comprehensive prosperity index and industrial added value [3]. Price Indicators - The report includes PPI, PPIRM, CCPI, and price differentials for chemical products, highlighting recent trends and historical positions [3]. Supply-Side Indicators - Key metrics include capacity utilization rates, energy consumption, fixed asset investments, inventory levels, and ongoing construction projects [3]. Import and Export Indicators - The report analyzes the contribution of import and export values to the industry [3]. Downstream Industry Performance - The report examines performance indicators for downstream sectors such as PMI, real estate, home appliances, automotive, and textiles [3]. Global Macro and End-Market Indicators - It includes global procurement manager indices, GDP year-on-year changes, civil construction starts, consumer confidence indices, and automotive sales [3]. Global Chemical Product Prices and Differentials - The report provides insights into the pricing and differentials of chemical raw materials, intermediate products, and sub-industries like resins and fibers [3]. Global Industry Economic Indicators - It covers sales revenue changes, profitability, growth potential, debt repayment capacity, operational efficiency, and per-share metrics [3]. Recommendations for Investment Opportunities - The report suggests focusing on industries with stable demand and supply logic, such as refrigerants, phosphates, and amino acids, while also highlighting sectors with improving supply-demand dynamics like organic silicon [7]. - Key recommended companies include Juhua Co., Sanmei Co., and Dongyue Group for refrigerants, and Wanhua Chemical for MDI [7]. Market Trends and Strategic Directions - The report emphasizes the shift from a cost-efficiency-driven global investment model to a stability and security-oriented regional cooperation model, suggesting investment opportunities in both domestic and international markets [7]. - Companies recommended for investment include Lite-On Technology, Ruile New Materials, and Wanrun Co. in the OLED materials sector [7].

Core Viewpoint - The March manufacturing PMI has returned to a one-year high, raising questions about whether it will repeat last year's pattern of a peak followed by a decline [1] Group 1: Comparison with Last Year - Similar to last year, the March PMI has seasonal increases following the end of the Spring Festival impact, but this year relies more on marginal improvements and enhanced "scientific content" rather than a short-term pulse effect [2] - The Longjiang Business School BCI for March is at 54.8%, higher than last year's 52.1%, and the EPMI has seen a significant month-on-month increase of 10.6 percentage points, marking the highest growth rate in two years [2] Group 2: PMI Performance Analysis - The new orders index for March PMI recorded 51.8%, a month-on-month increase of 0.7 percentage points, becoming the largest driving factor for the manufacturing PMI [4] - The production index's month-on-month growth is only 0.1 percentage points, indicating that production recovery is lagging behind demand, possibly due to prior production being at sufficient levels [4] Group 3: Export and Demand Insights - The new export orders index for March PMI has increased by 0.4 percentage points, indicating ongoing efforts to "seize exports" [7] - Small enterprises have shown the most significant increase in PMI, with a month-on-month growth of 3.3 percentage points, contrasting with large enterprises' decline of 1.3 percentage points and medium enterprises' increase of 0.7 percentage points [7] Group 4: Sustainability of Demand Recovery - Despite positive signals from the March PMI, there are underlying risks, including weak performance in two major price indicators, with the raw material purchase price index at 49.8% and the factory price index at 47.9% [9] - The import index for March PMI is at 47.5%, reflecting a significant month-on-month decline of 2.0 percentage points, indicating insufficient domestic demand [12] - There is a prevailing cautious sentiment among enterprises, as the production activity expectation index has decreased from 54.5% in February to 53.8% in March, and the employment index has also declined [12]