Core Viewpoint - The chemical industry has experienced a decline in profitability for three consecutive years since 2022, with some sectors facing intense competition and overall losses. However, there is a shift towards industry self-regulation to restore product supply-demand balance and improve profitability [1] Industry Overview - The agricultural chemicals, refrigerants, bioenergy, tires, and metal chromium sectors are currently in an upward cycle of prosperity [1] Market Trends - According to GGII statistics, domestic energy storage lithium battery shipments are expected to reach 430 GWh in the first three quarters of 2025, exceeding 30% of the total for 2024, with an anticipated annual total of 580 GWh, representing a 67% year-on-year growth. This surge in storage demand, coupled with pre-subsidy rushes, has led to strong demand for upstream lithium battery materials, resulting in a supply shortage and a continuous price recovery [1] - Nutrien forecasts that global potash demand may further increase to 74-77 million tons by 2026, with global potash prices expected to maintain high levels and potential for further increases due to major companies delaying capacity expansions [1] Investment Focus - CITIC Securities indicates that the chemical sector is currently trading around three main themes: 1. The rise in energy storage demand is enhancing the prosperity of the supply chain, with a reshaping of the supply-demand dynamics for upstream lithium battery materials, recommending a focus on new energy-related materials [1] 2. The ongoing "anti-involution" efforts in the chemical industry are leading to self-regulation across multiple sectors, which is likely to support a bottoming out and recovery in chemical product prices [1] 3. The chemical sector itself is experiencing high prosperity, with core businesses expected to maintain robust growth [1]

Group 1 - The recent fluctuations in the US stock market, particularly the Nasdaq, are attributed to high valuations encountering tightening liquidity, indicating a healthy correction phase [1] - The rise in the US dollar is primarily due to the government shutdown and the upcoming end of the Federal Reserve's balance sheet reduction, which is expected to release liquidity once normal spending resumes [1] - The current market turbulence provides an opportunity for investors who have been waiting to enter the market, suggesting that the fluctuations are not indicative of a major downturn [1] Group 2 - Investment opportunities are identified in the renewable energy sector, particularly in sub-industries such as wind, solar, nuclear, batteries, and power grids, which have shown no signs of reaching a peak since August 27 [2] - Recent capital inflows have been observed in agricultural chemicals and upstream battery sectors, indicating a focus on price increase trends [2] - The high tolerance for risk in a bull market allows investors to practice and refine their strategies, even if they face short-term losses [2]

Group 1 - The company plans to rename its wholly-owned subsidiary Hunan Changqing Runkangbao Agricultural Chemical Co., Ltd. to Hunan Shengrui Agricultural Biotechnology Co., Ltd. [1]

Investment Rating - The report maintains an "Outperform" rating for the agricultural chemical industry [6][9]. Core Views - The potassium fertilizer supply and demand are tightly balanced, with international prices remaining high. China, being the largest consumer, has a dependency on imports exceeding 60% [1][25]. - The long-term price center for phosphate rock is expected to remain high due to declining grades and increasing extraction costs in China, alongside growing demand from downstream sectors like lithium iron phosphate [2][5]. - The demand for lithium iron phosphate continues to rise, with production and prices increasing significantly, indicating a positive outlook for the industry [3][51]. Summary by Sections Potassium Fertilizer - China's potassium chloride production is projected to decrease by 2.7% to 5.5 million tons in 2024, while imports are expected to reach a record high of 12.633 million tons, up 9.1% year-on-year [1][25]. - As of October 2025, the average market price for potassium chloride is 3,228 CNY/ton, reflecting a year-on-year increase of 28.3% [1][45]. - The report recommends focusing on potassium fertilizer companies, particularly "Yaka International," which is expected to produce 2.8 million tons and 4 million tons of potassium chloride in 2025 and 2026, respectively [4][50]. Phosphate Chemicals - The phosphate rock supply-demand balance is tight, with the market price for 30% grade phosphate rock remaining high at 1,040 CNY/ton in Hubei and 970 CNY/ton in Yunnan [2][52]. - The report highlights the increasing demand for phosphate in new applications, particularly in the lithium battery sector, which is driving up prices for related products [3][51]. - Key companies recommended in the phosphate sector include "Yuntianhua" and "Xingfa Group," which have rich phosphate reserves [5][9]. Pesticides - The report anticipates an increase in exports of glyphosate and glufosinate to the Northern Hemisphere during the seasonal peak from November to January, with prices rebounding from historical lows [4][8]. - The domestic glyphosate industry is operating at a high capacity of 92.42%, with inventory levels at a two-year low, supporting price increases [4][8]. - Recommended companies in the pesticide sector include "Yangnong Chemical" and "Lier Chemical," which are well-positioned to benefit from the expected demand surge [8][9].

Core Viewpoint - The phosphorus chemical sector experienced significant market activity, leading to a 2.60% increase in the Chemical 50 ETF (516120), with over 90% of constituent stocks showing gains, driven by rising phosphorus prices and structural recovery in the industry [1] Group 1: Market Performance - The Chemical 50 ETF (516120) saw a rise of 2.60%, with a current increase of 2.47% at the time of reporting [1] - Major stocks such as Xin Fengming and Yuntianhua hit the 10% daily limit, while other constituents like Yangnong Chemical and Tongkun Co. also performed strongly [1] Group 2: Price Movements - The yellow phosphorus index increased by 4% on November 5, with a cumulative rise of over 7% in the past two weeks [1] - The price surge is attributed to the reduction in wet-process phosphoric acid production and the recovery in demand for downstream electrolyte raw materials [1] Group 3: Industry Outlook - Structural optimization is expected in the supply side of the basic chemical industry, supported by domestic "anti-involution" policies and rising overseas raw material costs [1] - The closure of European and American enterprises due to Asian capacity shocks allows China's chemical industry to fill international supply chain gaps, reshaping the global landscape [1] - In the medium to long term, demand recovery is anticipated under supportive policies, with significant growth potential in emerging fields such as semiconductors and new energy materials [1] Group 4: Sector Composition - The Chemical 50 ETF (516120) closely tracks the chemical sub-index (000813.CSI), with the top three sectors being chemical products (25.7%), agricultural chemicals (22.7%), and chemical raw materials (15%) [1] - The top ten weighted stocks include Wanhua Chemical, Salt Lake Co., Tianci Materials, Juhua Co., Cangge Mining, Jinfat Technology, Baofeng Energy, Hualu Hengsheng, Hengli Petrochemical, and Yuntianhua [1]

Group 1: Market Performance - The three major indices opened higher on November 6, with the Shanghai Composite Index up 0.10%, the Shenzhen Component Index up 0.37%, and the ChiNext Index up 0.60% [1] - The Tianhong Food and Beverage ETF (159736) rose by 0.28%, with a premium trading rate of 0.06% [1] - As of November 5, the Tianhong Food and Beverage ETF had a latest circulating scale of 5.622 billion yuan, ranking first among food and beverage ETFs in the Shenzhen market [1] Group 2: Fund Flows - The Tianhong Food and Beverage ETF experienced net inflows for 9 out of the last 10 days, accumulating nearly 120 million yuan [1] - The ETF tracks the CSI Food and Beverage Index, focusing on leading stocks in high-end and mid-range liquor, as well as segments like beverages, dairy, and condiments [1] Group 3: Agricultural Sector - The Tianhong Agricultural ETF (subscription code: 512623, listing code: 512620) officially launched on November 3, with fundraising set to end on November 7, 2025 [1] - This ETF tracks the CSI Agricultural Index, which selects 50 stocks covering sectors such as breeding and agricultural chemicals, including leading companies like Muyuan and Haida [1] Group 4: Industry Insights - Guizhou Province's Commerce Department is soliciting opinions on transforming "selling liquor" into "selling lifestyle," encouraging innovation in product offerings and service methods in retail and dining sectors [2] - As of October 30, over 90% of the autumn grain harvest has been completed nationwide, with the Northeast region nearing completion and expected to achieve a good harvest [2] Group 5: White Liquor Market Analysis - Guosen Securities reports that the white liquor market is facing pressure on both volume and price due to tightening regulations on public consumption and business banquets [3] - The report indicates that the worst period for white liquor sales pressure has passed, with expectations for demand recovery in the future [3] - Guosen Securities suggests focusing on stable industry leaders and high-quality stocks with long-term growth potential due to ongoing structural upgrades and channel strategy optimization [3]

Investment Rating - The investment rating for the company is "Accumulate" [5] Core Insights - The company reported a revenue of 9.156 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 14.23%, and a net profit attributable to the parent company of 1.055 billion yuan, up 2.88% year-on-year [1] - In Q3 2025, the company achieved a revenue of 2.923 billion yuan, with a year-on-year increase of 26.15% but a quarter-on-quarter decrease of 2.34%. The net profit for Q3 was 250 million yuan, down 5.01% year-on-year and 32.72% quarter-on-quarter [1][2] - The gross profit margin for Q1-Q3 2025 was 22.35%, a decrease of 1.67 percentage points year-on-year, while the net profit margin was 11.53%, down 1.27 percentage points year-on-year [2] - The company is experiencing a steady increase in the sales volume of raw materials, with Q3 raw material production at 29,200 tons and sales at 29,600 tons, a year-on-year increase of 13.53% [2][3] - The price of glyphosate has shown an upward trend, with a price of 27,295 yuan per ton as of October 27, 2025, reflecting a year-to-date increase of 15.62% [3] Financial Performance Summary - For 2025, the company is expected to achieve a net profit of 1.438 billion yuan, with a corresponding PE ratio of 19.0 [4][10] - The projected revenue for 2025 is 11.484 billion yuan, with a growth rate of 10.1% [4] - The company’s gross profit margin is expected to be 24.6% in 2025, with a net profit margin of 12.5% [4]

Group 1 - The Agricultural ETF Tianhong (subscription code: 512623) has officially launched, providing an efficient and convenient tool for investors to allocate resources in the agricultural sector [1] - The ETF is policy-backed, benefiting from the foundational role of agriculture in the national economy, with policies such as the 2025 Central Document No. 1 and the "Accelerating the Construction of a Strong Agricultural Country Plan" set to be implemented, ensuring a full-chain dividend [1] - The ETF tracks the CSI Agricultural Index, selecting 50 stocks across various fields, including breeding (42.3%) and agrochemicals (17.5%), featuring leading companies like Muyuan and Haida, which helps to diversify cyclical risks [1] Group 2 - The current index price-to-earnings ratio (TTM) is below the 10th percentile of the past decade, indicating a valuation trough, combined with rising pig prices and institutional capital inflow, suggesting potential for valuation recovery and earnings growth [3] - The president of the China Animal Husbandry Association stated that high-quality development in the pig farming industry does not exclude competition, emphasizing the need for innovation, cost reduction, and quality maintenance while controlling production capacity [3] - According to Guojin Securities, the average national pig price in Q3 2025 was 13.79 yuan/kg, down 29.05% year-on-year, with some companies facing losses due to falling prices, leading to an expected industry capacity reduction [3]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 86.10 CNY, based on a 21x PE ratio for 2025 [3][6]. Core Insights - The company's earnings per share (EPS) are projected to be 4.10 CNY, 4.89 CNY, and 5.94 CNY for the years 2025, 2026, and 2027 respectively, indicating a strong growth trajectory [3]. - The company has demonstrated a commitment to risk control, which has allowed it to navigate challenges in the South American market effectively [11]. - The report highlights a significant improvement in profitability, with a net profit of 334 million CNY in Q3 2025, reflecting a year-on-year growth of 109.13% [11]. Financial Summary - The company's revenue is expected to grow from 11,485 million CNY in 2023 to 19,900 million CNY in 2027, with a compound annual growth rate (CAGR) of approximately 14.5% [5][13]. - Operating profit is projected to increase from 945 million CNY in 2023 to 2,246 million CNY in 2027, with a notable growth rate of 248.7% in 2025 [5][13]. - The gross margin is expected to improve from 21.2% in 2023 to 21.9% in 2027, indicating ongoing operational efficiency [5][13]. - The net profit attributable to the parent company is forecasted to rise from 771 million CNY in 2023 to 1,668 million CNY in 2027, with a significant growth of 155.9% in 2025 [5][13].

Core Viewpoint - The company reported significant growth in Q3 2025, with revenue reaching 4.381 billion yuan and net profit of 334 million yuan, driven by reduced exchange losses and expansion in high-value regions and to C business [1] Group 1: Financial Performance - In Q3 2025, the company achieved a revenue increase of 6.76% quarter-on-quarter and 13.95% year-on-year, while net profit surged by 109.13% quarter-on-quarter and 11.80% year-on-year [1] - The gross profit margin for Q3 2025 was 23.08%, reflecting a year-on-year increase of 2.52 percentage points and a quarter-on-quarter increase of 0.16 percentage points [2] Group 2: Business Segments - The revenue share from North America and Europe increased to 13.6%, up by 2.7 percentage points year-on-year, with the to C business revenue share rising to 41.39%, an increase of 3.66 percentage points year-on-year [2] - The to C business revenue share for Q3 2025 was 43.25%, showing a year-on-year increase of 5.23 percentage points and a quarter-on-quarter increase of 1.9 percentage points [2] - The share of insecticides and fungicides in the product mix increased to 31.70% in Q3 2025, up by 5.58 percentage points quarter-on-quarter and 4.44 percentage points year-on-year [2] Group 3: Industry Outlook - The agricultural chemical industry is experiencing a recovery phase, with China's agricultural chemical exports in Q3 2025 reaching 2.612 billion USD, a year-on-year increase of 21.61% [3] - The export price of agricultural chemicals was 2.96 USD/kg in Q3 2025, showing a gradual increase since the beginning of the year [3] - China maintains strong export competitiveness in agricultural chemicals due to low costs and a complete supply chain, indicating a positive outlook for the industry's recovery [3] Group 4: Investment Recommendations - The company is expected to achieve net profits of 1.14 billion, 1.31 billion, and 1.60 billion yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 19, 17, and 14 times [4] - The company's global operations, growth in high-value regions, and improvements in product quality are viewed positively, maintaining a "Buy-B" rating [4]