Investment Rating - The report initiates coverage with a "Buy" rating for the company, which is the largest and most comprehensive manufacturer of photoinitiators in China, actively advancing its semiconductor materials layout to create a second growth curve [3]. Core Viewpoints - The company has a leading position in the photoinitiator industry, with a market share of approximately 30%. It has been focusing on the photopolymerization industry for over 20 years and is expanding into semiconductor chemical materials [19]. - The company's revenue and operating performance are closely tied to the cyclical nature of the photopolymer materials market, with expectations for recovery as the industry improves [23]. - The company has strong R&D capabilities and is actively developing a full industrial chain from raw materials to downstream photolithography products, enhancing its diversified growth strategy [4][22]. Financial Summary - Revenue is projected to grow from 1,235 million yuan in 2023 to 2,090 million yuan in 2027, with a compound annual growth rate (CAGR) of approximately 13.13% [2]. - The net profit attributable to the parent company is expected to turn from a loss of 96 million yuan in 2023 to a profit of 197 million yuan in 2027, indicating a significant recovery [2]. - Earnings per share (EPS) is forecasted to improve from -0.89 yuan in 2023 to 1.22 yuan in 2027, reflecting a positive trend in profitability [2]. Industry Overview - The photoinitiator market is expected to benefit from the growing demand for UV coatings and inks, driven by environmental policies and the increasing penetration of UV technology in various applications [5][64]. - The domestic UV coating production has grown from 68,200 tons in 2015 to 194,200 tons in 2023, with a CAGR of 14%, indicating substantial growth potential in the market [5]. - The company is well-positioned to capitalize on the recovery of the PCB industry, with the market value of domestic UV inks increasing from 3.291 billion yuan in 2018 to 5.537 billion yuan in 2023, achieving a CAGR of 11% [5]. R&D and Product Development - The company has developed over ten types of photoinitiators, including 184, TPO, and 1173, and has a production capacity of 22,850 tons, making it the largest manufacturer in the country [6][21]. - The company is also advancing its semiconductor materials layout, with projects in photolithography and core raw materials expected to enter trial production in 2024 [22]. Management and Governance - The company has a stable ownership structure, with significant shareholding by executives, reflecting confidence in long-term development [47].

Investment Rating - The report maintains a "Positive" investment rating for the chemical industry [11] Core Insights - The report emphasizes the importance of addressing "involution" in the chemical industry, with multiple government meetings in 2024 highlighting the need to combat "malicious competition" and promote product quality [6][16] - The focus is on identifying potential investment opportunities within the chemical sector that can benefit from the government's "anti-involution" policies [17] Summary by Sections Why Focus on Chemical Industry Investment Opportunities? - The report outlines the government's commitment to addressing "involution" through various meetings and policy announcements, including the emphasis on supply-side structural reforms and the need for industry self-discipline [6][16] - The report suggests that the chemical industry can find opportunities under the current "anti-involution" policies, particularly through the identification of sectors with stable supply-demand dynamics [17] Which Sub-industries May Benefit from Anti-involution? - The report identifies several sub-industries likely to benefit from the anti-involution policies, including: 1. Comprehensive Chain: Chromium salts, caustic soda, industrial silicon, organic silicon 2. Agricultural Chain: Glyphosate, urea, methanol, sucralose/aspartame, MSG, lysine 3. Real Estate Chain: PVC, soda ash, titanium dioxide, MDI/TDI 4. Electronics Chain: Photoinitiators, refrigerants R134a/R32 5. Textile Chain: Dyes, viscose staple fiber, spandex, viscose filament, polyester filament 6. Automotive Chain: Polyester industrial yarn [7][8][20] Investment Recommendations - The report recommends focusing on sub-industries that meet specific criteria such as slowing capacity growth, high operating rates, high concentration, minimal cost differences among leading companies, and products at the bottom of the price cycle [8][9] - Key sub-industries to watch include organic silicon, polyester filament, photoinitiators, glyphosate, industrial silicon, and MSG/amino acids, with specific companies highlighted for potential investment [9][29]

Summary of Key Points from Conference Call Records Industry Overview Chemical Industry - **Chlorinated Sugar Market**: The price of chlorinated sugar is expected to rise significantly as it is currently at a historical low. Manufacturers are pushing for price increases, with a potential profit increase of approximately 200 million yuan if the price rises by 10,000 yuan per ton for the 23,000 tons of capacity [1][2]. - **Chlorinated Sugar Supply and Demand**: The industry is projected to start collaborative efforts to counteract internal competition in 2024. Currently, there is an excess capacity of about 7,000 tons, but with a natural annual growth of 2,000 tons, supply-demand balance is expected to improve by 2026 [1][3][4]. Organic Silicon Market - **Market Conditions**: The organic silicon market has experienced a three-year bottom cycle, with supply-demand relationships improving. Demand is growing at an annual rate of approximately 15%, despite a decline in the construction sector [5]. - **Supply Adjustments**: The supply side has seen excessive investment in recent years, leading to a decrease in operating rates. Future adjustments in supply are critical to align with stable demand [5][8]. - **Foreign Investment Exit**: Foreign companies are actively exiting the organic silicon market, which may lead to significant changes in the supply side and create new opportunities for domestic companies [6][7]. Company-Specific Insights Jiurui New Materials - **Chlorinated Sugar Production**: Jiurui New Materials has a production capacity of 23,000 tons. A price increase of 10,000 yuan per ton could yield an additional profit of about 200 million yuan, indicating significant profit elasticity [2][3]. - **Strategic Plans**: The company is considering mergers and acquisitions to optimize pricing and enhance technology in response to industry competition [13][14]. Sanli Sugar - **Market Response**: Sanli Sugar's price increase has not been reflected in its stock price due to severe overcapacity. The company is attempting to reduce production to elevate prices, with market reactions to be observed in the upcoming quarters [15][16]. Jinhe Company - **Profit Potential**: Jinhe Company stands to benefit from price increases in chlorinated sugar, with potential profit increases of 70-80 million yuan for every 10,000 yuan price rise [4][16]. Additional Considerations - **Market Dynamics**: The organic silicon market is expected to reach a balance between supply and demand by the end of 2024, with no new large-scale expansions planned, which may stabilize prices and profitability [8][11][12]. - **Impact of External Factors**: The closure of Dow's peroxide plant in the UK has reduced European capacity by approximately 140,000 to 150,000 tons, positively impacting global supply optimization [7]. This summary encapsulates the key insights and projections from the conference call, highlighting the dynamics within the chemical and organic silicon industries, as well as specific company strategies and market conditions.

Group 1 - The supply-demand pattern in the light curing agent industry is improving, leading to potential profitability recovery [3][4][8] - The demand side shows a rebound in traditional sectors and new opportunities in emerging applications such as UV coatings, inks, and adhesives [4][5] - The light curing agent market in China is projected to grow, with a demand increase of 9% in 2023, reaching 35,000 tons [5][6] Group 2 - The production capacity of leading light curing agent companies in China is concentrated, with major players like Jiu Ri New Materials and Qiangli New Materials holding significant market shares [7][8] - The industry is expected to see a further increase in concentration as weaker players exit the market, enhancing competitive dynamics [6][8] - The light curing agent industry is rated as "recommended" due to the anticipated recovery in profitability and demand [8] Group 3 - The refrigerant market is experiencing a price increase due to quota restrictions, with R32 and R134a showing significant price rises [11][12] - The demand for refrigerants is driven by the growth in household and automotive air conditioning markets, with production expected to rise [15][16] - The refrigerant industry is rated as "recommended" based on tightening supply-demand relationships and continuous demand growth [16][17] Group 4 - The macroeconomic environment in China is showing resilience, with a stable growth outlook supported by strong consumer demand and manufacturing investment [19][20] - The government is implementing proactive fiscal policies, including increased budget deficits and special bond issuances to stimulate economic growth [27][28] - The export sector is expected to maintain resilience, supported by diversified trade partners and optimized product structures [45][46]

Investment Rating - The report assigns a "Recommended" rating to the photoinitiator industry, marking its first coverage [2]. Core Viewpoints - The supply-demand dynamics in the photoinitiator industry are improving, leading to a potential recovery in industry profitability [3][10]. - The demand side is witnessing a revival in traditional sectors, while emerging applications are opening new opportunities [6][10]. - The industry is expected to see a concentration of production capacity among companies with scale, cost, and technological advantages [9][10]. Summary by Sections Supply and Demand Dynamics - The prices of various photoinitiator products have increased significantly in 2025, with notable price changes: - Photoinitiator 907: 88 CNY/kg (+27.54% since the beginning of the year) - Photoinitiator 184: 45 CNY/kg (+32.35%) - Photoinitiator TPO: 83 CNY/kg (+10.67%) - Photoinitiator ITX: 155 CNY/kg (+16.54%) [5]. - The photoinitiator market in China is projected to grow, with the UV coating market reaching 6.2 billion CNY in 2023 (+8% YoY), UV ink at 5.5 billion CNY (+11% YoY), and UV adhesive at 2.6 billion CNY (+238% YoY) [6][7]. Demand Drivers - The demand for photoinitiators is expected to rise due to recovery in the real estate sector and growth in downstream applications such as UV inks and adhesives used in electronics and packaging [7][10]. - The global 3D printing industry is projected to grow from 20 billion USD in 2023 to 21.9 billion USD in 2024 (+9.1%), with a compound annual growth rate (CAGR) of 18% expected from 2024 to 2034 [7]. - The PCB market is also on an upward trend, with a projected value of 73.6 billion USD in 2024 (+5.8% YoY) and an expected market size of 94.7 billion USD by 2029 [8]. Supply Side and Industry Structure - The production capacity of leading photoinitiator companies in China for 2024 is as follows: - Jiu Ri New Materials: 23,000 tons - Qiang Li New Materials: 17,000 tons - Wo Kai Long: 13,000 tons [9]. - The industry is experiencing a consolidation trend, with production capacity increasingly concentrated among companies with competitive advantages [9][10]. Investment Strategy - The report suggests that the photoinitiator industry is poised for a rebound in profitability as supply-demand conditions improve, and it highlights the potential for price recovery [10]. - Key companies to watch include Jiu Ri New Materials, Qiang Li New Materials, Yang Fan New Materials, and Xin Han New Materials [11].

Macro Strategy - The overall consumption rate in China is low, with a 2019 resident consumption rate of 39.3%, compared to 55.2% in 43 countries, indicating room for improvement in both service and goods consumption [1][9] - China's service consumption rate is not low when compared to countries with a GDP per capita below $25,000, with a service consumption rate of 53.8% in 2019, higher than most countries at a similar development level [1][9] - The structure of service consumption in China shows a preference for basic services, with significant spending on housing, healthcare, and education, while entertainment and leisure services are less prioritized [1][9][10] Fixed Income - The report on Japanese residents' wealth allocation highlights a shift from non-financial assets to diversified financial assets since the 1990s, driven by low interest rates and demographic changes [2][12] - The proportion of non-financial assets in Japan decreased from 63.8% in 1990 to 42.7% in 2003, while financial assets increased to 57.3%, indicating a significant change in investment behavior [2][12] - The aging population in Japan has led to increased demand for savings and pension products, with insurance and pension assets becoming a significant part of financial asset allocation [2][12][13] Industry Analysis - The price of mainstream photoinitiators has increased, with notable price rises of 28% for 907 grade, 32% for 184 grade, and 11% for TPO grade since the beginning of the year, indicating a recovery in industry prosperity [6] - The supply side of the photoinitiator market is becoming concentrated due to the shutdown of major domestic manufacturers, which may lead to collaborative development among remaining firms [6] - The demand for photoinitiators is growing in emerging fields, driven by their essential role in light curing applications [6] Company Recommendations - The report on Xiaopeng Motors forecasts significant revenue growth, with expected revenues of 947 billion, 1,676 billion, and 2,491 billion yuan for 2025 to 2027, representing year-on-year growth rates of 132%, 77%, and 49% respectively [7] - The report on Daotong Technology highlights the company's strategic response to new tariffs and its expansion in the overseas charging pile market, indicating strong growth potential [8] - The analysis of Libor Convertible Bonds suggests a listing price range of 128.57 to 142.73 yuan, with a good debt protection feature and an expected subscription rate of 0.0028% [4][15]

Investment Rating - The industry investment rating is "Add" (Maintain) [1] Core Viewpoints - The supply of photoinitiators is becoming concentrated, and demand in emerging fields is booming, leading to a recovery in industry prosperity [1] - Photoinitiators are essential raw materials for light-curing materials, accounting for 3%-5% of the total usage in these materials, but their cost constitutes 10%-15% of the overall cost of light-curing products [2] - The demand for photoinitiators is expected to grow due to the expansion of applications in both traditional and emerging fields, such as automotive parts, electronics, PCB manufacturing, and 3D printing [2] Summary by Sections Basic Information - Photoinitiators are crucial for UV coatings, inks, and adhesives, enabling the curing process through exposure to specific wavelengths of light [2] - Light-curing materials are environmentally friendly and energy-efficient alternatives to traditional solvent-based products, contributing to the reduction of VOC emissions [2] Industry Trends - The main domestic manufacturers of photoinitiators have faced production halts, which may lead to collaborative development within the industry [5] - The competitive landscape shows that China is a major producer of photoinitiators, with significant production capacities from companies like Jiu Ri New Materials and Qiangli New Materials [5] Supply and Demand Dynamics - Supply-side challenges include production stoppages due to safety and environmental issues at key manufacturers, which may hinder recovery efforts [5] - The demand for photoinitiators is driven by the growth of light-curing applications in new sectors, indicating a positive outlook for the industry [5] Related Companies - Key companies in the industry include Jiu Ri New Materials, Qiangli New Materials, Yangfan New Materials, and Gurin Technology [6]

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2] Core Viewpoints - The report highlights the recovery in demand for photoinitiators driven by the continuous growth in the downstream PCB industry, with various grades of photoinitiators seeing price increases [5] - The global PCB market is expected to recover, with a projected total output value of USD 73.57 billion in 2024, reflecting a year-on-year growth of 5.8% [5] - The concentration of production capacity in the photoinitiator industry is increasing, leading to a more favorable supply-side environment for leading companies [5] Summary by Relevant Sections Market Performance - The report indicates a significant price increase for various grades of photoinitiators, with the 907 grade price at CNY 88/kg, up 19% year-to-date [5] Demand Side - The demand for photoinitiators is driven by their critical role in photopolymerization systems, with applications in various sectors including electronics, coatings, and healthcare [5] - The global PCB market value was USD 81.74 billion in 2022, declining to USD 69.52 billion in 2023, but is expected to rebound in 2024 [5] Supply Side - China is the world's largest producer and exporter of photoinitiators, with a significant portion of global production capacity concentrated in leading firms [5] - The report notes that leading companies are expanding their production capacities, while weaker firms may face elimination as industry concentration increases [5] Recommendations - The report suggests focusing on companies such as Jiu Ri New Materials, Yangfan New Materials, and Strongly New Materials as potential investment opportunities [5]

Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2][4] Core Viewpoints - The report highlights an expected improvement in supply-demand dynamics for photoinitiators, with a potential recovery in market conditions [4] - The report emphasizes the concentration of production in China, which has become the world's leading producer and exporter of photoinitiators, accounting for 13.21% of global exports in 2023 [4] - The report suggests that the price of photoinitiators is likely to rebound due to expanding applications in UV curing technology and a shift towards environmentally friendly solutions [4] Summary by Sections Market Performance - The report indicates a market performance trend with fluctuations ranging from -17% to 26% from July 2024 to March 2025, compared to the CSI 300 index [3] Supply Side - China is the main production country for photoinitiators, with a concentrated industry structure favoring leading companies [4] - Major domestic producers include Jiurui New Materials, Yangfan New Materials, and others, with capacities of 23,000 tons, 17,000 tons, and 13,000 tons respectively [4] - The report notes that the industry is experiencing consolidation, with smaller players facing challenges due to safety and environmental compliance issues [4] Demand Side - The report discusses the expanding application areas for UV curing technology, which is gaining traction due to its advantages over traditional methods [4] - Historical data shows a significant decline in photoinitiator prices, with a 27.8% year-on-year decrease in 2023 and a further 16.3% drop expected in 2024 [4][7] - The report anticipates a price recovery as demand in high-end applications continues to grow [4] Recommendations - The report recommends focusing on companies such as Jiurui New Materials, Yangfan New Materials, and Strong Power New Materials as potential investment opportunities [4]

Group 1: Baijiu Industry - The baijiu industry may experience a "double bottom" in valuation and performance by 2025, based on a four-year adjustment period and current low market valuation levels (dynamic P/E ratio of 18, lower than the 19 for the entire A-share market) [2] - The current dividend yield in the baijiu sector is attractive, especially against the backdrop of declining government bond yields, suggesting that baijiu stock prices may stabilize before performance does [2] - Despite an overall slowdown in industry growth, emerging sectors such as prepared dishes, baking, health products, and tea drinks are performing well, reflecting trends of consumption upgrading and diversified demand [2] Group 2: Photoinitiators Market - The market demand for photoinitiators is gradually increasing due to their expanding applications across various industries, and the rising prices of photoinitiator products are expected to enhance the profitability of related companies [2][3] - Photoinitiators are core raw materials for light-curing materials, widely used in solvent-based coatings, inks, and adhesives, with market growth driven by environmental regulations and emerging applications like 3D printing [2][3] - The domestic photoinitiator industry holds a significant position globally, with leading companies demonstrating strong competitiveness in production scale, product quality, and R&D capabilities [3] Group 3: Hong Kong Insurance Market - The impending "cap" policy for Hong Kong insurance is driving a surge in demand for high expected returns from participating insurance, particularly among mainland investors [4] - The Hong Kong Insurance Authority has set the upper limit for the benefit illustration interest rate for participating insurance at 6.0%-6.5%, which may lead to a downward adjustment in expected returns [4] - Despite the cap, actual returns may not be immediately affected, as insurance companies can still pay dividends exceeding the cap based on actual investment performance [5] Group 4: New Energy Vehicles (NEVs) - By 2025, new technologies in the automotive industry are expected to enhance the penetration of advanced intelligent driving technologies in the mid-to-low-end market, driving rapid growth in the smart automotive sector [4] - The expansion of the smart automotive industry chain is anticipated, with related sectors and stocks potentially experiencing rapid profit growth, leading to a "Davis double hit" by 2025 [4] - The promotion of fuel cell vehicles is expected to significantly increase, with over 28,000 fuel cell vehicles projected to be promoted in China by the end of 2024 [4] Group 5: African Currency Payment System - Africa is making substantial progress in establishing a local currency payment system, particularly through the Pan-African Payment and Settlement System (PAPSS), which reduces trade costs and enhances economic autonomy [5] - The PAPSS has been implemented in 15 countries since its launch in 2022, allowing transactions between countries like Zambia and Kenya to be settled in local currencies, potentially saving the continent $5 billion annually [5] - The push for a regional payment system in Africa has received international support, emphasizing the need for integration and the use of local currencies in trade and settlement [5]