Core Viewpoint - The successful commissioning of the 400,000 tons/year high-density polyethylene (HDPE) unit at Jilin Petrochemical's ethylene plant marks a significant advancement in the company's transformation and upgrade project, addressing the domestic demand gap for high-end polyethylene products [1] Group 1: Project Details - The HDPE unit has achieved a successful first run, producing polyethylene pellets and is expected to fill the demand gap for PE100+ pipe materials and other high-end polyolefin products [1] - On July 21, the 1,000,000 tons/year catalytic gasoline hydrogenation unit also successfully commenced operations, becoming the first of four units in the ethylene plant's upgrade project to be put into production [1] - The HDPE unit utilizes advanced low-pressure slurry technology from Germany's LyondellBasell, capable of producing 29 high-performance grades for injection molding, blow molding, and piping applications [1] Group 2: Technological and Economic Aspects - The catalytic gasoline hydrogenation unit is a core supporting facility of the Jilin Petrochemical upgrade project, employing technology from Sinopec Engineering Incorporation (SEI), known for its advanced, mature, safe, and reliable processes with low material and energy consumption [1] - The Jilin Petrochemical refining and chemical transformation project is the first large-scale petrochemical project approved by the state since the 14th Five-Year Plan and represents the largest single industrial investment in Jilin Province, with a total investment of 33.9 billion yuan [1] - This project aims to transition Jilin Petrochemical from a "fuel-type" to a "chemical products and organic materials-type" company [1]

Investment Rating - The report maintains an "Increase" rating for the oil and petrochemical industry [5] Core Viewpoints - International oil prices have shown a downward trend recently, with Brent crude settling at approximately $63.90 per barrel, down about 1.30% week-on-week, and down approximately 15.80% since the beginning of the year [19][21] - The North American active rig count has decreased week-on-week, with a notable year-on-year decline of 37 rigs, indicating a potential future increase in global drilling platform activity [31] - The refining sector shows promising recovery potential, with significant increases in price differentials for various products, suggesting improved profitability for refining companies [35] Market Performance - The CITIC oil and petrochemical sector rose approximately 0.37% during the week of May 26 to May 30, outperforming the Shanghai Composite Index by about 0.39 percentage points [16] - Key stocks that led the gains include Hengtong Co., Hongtian Co., and Compton, while stocks like Guangju Energy and Dongfang Shenghong saw declines [17][18] Investment Recommendations - The report identifies four main investment themes: 1. Focus on major energy state-owned enterprises like China National Petroleum and China National Offshore Oil Corporation, which are pushing for oil and gas exploration and green transformation [53] 2. Increased global upstream capital expenditure benefiting oil service companies such as CNOOC Services and Offshore Engineering [53] 3. Accelerated development of coal chemical projects and natural gas resources in Xinjiang, with a focus on companies like Baofeng Energy and New Natural Gas [53] 4. Refining companies planning new capacities and accelerating new material projects, recommending companies like Satellite Chemical and Hengli Petrochemical [53]