Investment Rating - The report indicates a cautious outlook on the chemical sector, with a focus on specific stocks that are expected to perform better in the current market conditions [3][4]. Core Insights - The overall allocation of public funds in the chemical sector has decreased, reaching a low of 1.81% in Q2 2025, down 0.19 percentage points from the previous quarter [10][17]. - The top ten chemical stocks held by public funds have seen their market value share decline by over 50% in the past year, suggesting that market sentiment may have bottomed out [17][18]. - The report highlights a shift in focus towards refrigerants, civil explosives, and certain new materials, while the share of export-oriented stocks has decreased [17][18]. Summary by Sections 1.1 National and Regional Allocation of Chemical Stocks - In Q2 2025, the allocation of chemical stocks by public funds has continued to decline across all regions, with East China at 2.01%, South China at 2.13%, and North China at 1.24% [10][22]. 1.2 Changes in Fund Holdings of Chemical Stocks - The number of funds holding major export-oriented stocks has significantly decreased due to external trade tensions, with notable declines in holdings for Wanhu Chemical and Sailun Tire [22][30]. - The total market value of the top 30 chemical stocks held by funds was 47.835 billion yuan, down 9.4% from the previous quarter, indicating a slight decrease in concentration [6][33]. Investment Analysis Recommendations - The report suggests focusing on traditional cyclical stocks such as Wanhu Chemical, coal chemical companies like Hualu Hengsheng and Baofeng Energy, and specific agricultural chemicals [4][18]. - For fluorochemical refrigerants, the long-term upward trend remains intact, with recommendations for stocks like Juhua Co., Sanmei Co., and Dongyue Group [4][18]. - In the semiconductor materials sector, stocks with low valuations and stable earnings such as Yake Technology and Dinglong Co. are highlighted as potential investments [4][18].