Investment Rating - The industry investment rating is "Outperform the Market" (maintained) [2] Core Viewpoints - The H-acid market is experiencing significant price increases, with a current price of 41,750 RMB/ton, reflecting a month-on-month increase of 3.09% and a year-on-year increase of 22.79%, marking a three-year high [4][6] - The active dye market price is currently 23 RMB/kg, with a month-on-month increase of 4.55% and a year-on-year increase of 9.52% [4][6] - The H-acid industry faces long-term supply-demand gaps due to environmental pressures, leading to the elimination of many small producers and a gradual increase in industry concentration [6] Summary by Sections Market Performance - The report indicates a market performance trend with a range from -22% to +22% for the period from June 2024 to February 2025 [3] Industry Dynamics - H-acid is a key intermediate for producing over 90 types of dyes, which are essential for dyeing wool and cotton fabrics, as well as for pharmaceutical production [6] - The production of H-acid generates complex and toxic wastewater, leading to high treatment costs and significant environmental pressures [6] - As of May 2025, the effective domestic production capacity of H-acid is less than 60,000 tons, indicating a supply gap of over 10% [6] Price Trends - The price of H-acid has been rising, which supports the upward price trend of active dyes, as H-acid constitutes 30-50% of the production cost of active dyes [6] - The active dye industry in China has a high concentration, with a CR4 of 64.91%, suggesting that leading companies have a strong pricing power [6] Recommended Stocks - The report suggests focusing on the following companies: Jinchicken Co., Jihua Group, Runtu Co., Haisheng Pharmaceutical, and Zhejiang Longsheng [6]

Market Overview - The Shanghai Composite Index opened slightly higher, while the Shenzhen Component and ChiNext Index opened slightly lower, indicating mixed market sentiment [1] - By midday, the Shanghai Composite Index was at 3403.52 points, up 0.11%, with a trading volume of approximately 308.5 billion; the Shenzhen Component was at 10226.55 points, down 0.23%, with a trading volume of about 480.2 billion; the ChiNext Index was at 2053.94 points, down 0.36%, with a trading volume of around 235.3 billion [1] Sector Performance - The top-performing sectors included dispersed dyes, liquid-cooled servers, and cultural and recreational sectors at the market open [1] - Active sectors also included recombinant proteins, hair medical, innovative drugs, beauty care, sports concepts, and solid-state batteries, while sectors like financial digitalization, PEEK materials, and AI saw significant declines [1] Institutional Insights - CITIC Securities suggests that small-cap stocks have a short-term advantage and may continue to perform strongly, while large-cap stocks are expected to follow suit as the macro economy recovers [2] - Huaxi Securities notes that the technology sector may experience rotation opportunities, with limited downside potential and promising upside as the sector has not reached high congestion levels [2] - Dongwu Securities anticipates a sustained recovery in the electronics industry in the second half of the year, driven by inventory depletion and seasonal demand [3] Government Initiatives - The National Development and Reform Commission expects a 30% increase in central budget investment for social undertakings compared to the end of the 13th Five-Year Plan [4] - The Ministry of Finance is accelerating the establishment of a childcare subsidy system to enhance elderly and childcare services [5]

Group 1 - The modern life is highly coupled with the chemical industry, including daily chemicals, fragrances, dyes, coatings, fibers, plastics, fertilizers, and pesticides, with modern medicine also being a part of the chemical sector [1] - Every bull market sees significant gains in chemical stocks, particularly in daily chemicals and pharmaceuticals, with a focus on lesser-known stocks in the dye (pigment) sector [1] - United Chemical is noted as one of the earliest stocks to lead the rise in the dye (pigment) sector, with recent activity observed in the dye (pigment) stock Baihehua [1] Group 2 - There is a noted linkage in the textile dye sector, which appears to be a diffusion phenomenon [2] - Donglai Technology, a company involved in automotive coatings, is mentioned in the context of this sector [2] Group 3 - Companies involved in fragrances, such as Yaxiang Co. and Huaye Fragrance, are highlighted as part of the chemical industry [4]

Group 1 - The dye sector is experiencing a strong upward trend, with significant gains in stock prices [1] - Baolidi has reached a 20% limit up, indicating strong market interest and investor confidence [1] - Other companies in the sector, such as Jihua Group and United Chemical, have also seen substantial increases, with Jihua Group hitting the limit up and United Chemical rising over 7% [1] Group 2 - Additional companies benefiting from this trend include Jinjis Co., Qicai Chemical, Runtu Co., and Annuoqi, all of which have shown positive stock performance [1]

Group 1 - The dye sector experienced a short-term surge, with Polyride (300905) hitting the daily limit, indicating strong market interest [1] - Jihua Group (603980) previously reached its limit, suggesting a trend of investor confidence in the sector [1] - Other companies such as Wanfeng Co. (603172), Jinchicken Co. (300798), Qicai Chemical (300758), Annuoqi (300067), and Runtu Co. (002440) also saw price increases, reflecting a broader rally in the dye industry [1]

Group 1 - The dye concept sector increased by 3.71%, ranking 7th among concept sectors, with 26 stocks rising, including Jinji Co., which hit a 20% limit up [1][2] - Notable gainers in the dye sector include Runtu Co., Bluefeng Biochemical, and Jihua Group, all reaching the limit up, while the largest declines were seen in Runhe Materials, Fuchun Dyeing & Weaving, and Honghua Technology [1][2] Group 2 - The dye concept sector attracted a net inflow of 382 million yuan, with 13 stocks receiving net inflows, and 6 stocks exceeding 30 million yuan in net inflow, led by Jinji Co. with a net inflow of 145 million yuan [2][3] - Jihua Group, Runtu Co., and Baolidi also saw significant net inflows of 84.31 million yuan, 79.37 million yuan, and 42.89 million yuan respectively [2][3] Group 3 - The top net inflow ratios were recorded by Jihua Group (31.47%), Bluefeng Biochemical (31.19%), and Jinji Co. (20.71%) [3] - The trading volume and turnover rates for these stocks indicate strong investor interest, with Jinji Co. showing a turnover rate of 22.80% [3]

A股染料板块午后走高，吉华集团、蓝丰生化涨停，锦鸡股份涨超10%，闰土股份、宝丽迪、双乐股 份、信凯科技、七彩化学等跟涨。 ...

染料板块走高，吉华集团（603980）、蓝丰生化（002513）涨停，锦鸡股份（300798）涨超10%，闰土 股份（002440）、宝丽迪（300905）、双乐股份（301036）、信凯科技（001335）、七彩化学 （300758）等跟涨。 暗盘资金一眼洞悉庄家意图>> ...

Core Viewpoint - The acquisition of Dystar by Zhejiang Longsheng marks the end of a 15-year-long acquisition process, solidifying Longsheng's control over Dystar and resolving longstanding legal disputes with Kiri Industries [6][7][11]. Company Overview - Zhejiang Longsheng Group has signed a share purchase agreement to acquire 37.57% of Dystar from Kiri Industries, making Dystar a wholly-owned subsidiary [3][6]. - The acquisition price has reached $697 million, exceeding initial expectations but deemed strategically valuable for Longsheng [11]. Legal Background - The acquisition stems from a ruling by the Singapore International Commercial Court (SICC) that mandated the sale of Dystar's 100% equity [6]. - Kiri Industries had previously filed a lawsuit against Longsheng, alleging oppressive behavior and seeking fair value for its shares [8][9]. Financial Performance - Dystar reported a net profit of $116 million in 2024, with a projected annualized net profit of approximately $92 million for Q1 2025 [17]. - Longsheng's revenue for 2024 is expected to be around 15.88 billion yuan, with a net profit of 2.03 billion yuan, reflecting a growth of over 30% [13]. Strategic Implications - The acquisition is expected to create synergies by integrating Dystar's R&D, production, and sales resources, enhancing operational efficiency [13][15]. - Longsheng aims to expand its market presence, particularly in Southeast Asia and Europe, leveraging Dystar's established global sales network [13]. Future Outlook - Longsheng plans to extend its business from traditional dyeing to specialty chemicals, focusing on key intermediates and enhancing supply chain control [14]. - The integration of Dystar's patented technologies is anticipated to accelerate the development of high-value products, potentially increasing profit margins by 3-5 percentage points [15].

Core Viewpoint - Zhejiang Longsheng plans to acquire a 37.57% stake in DyStar from KIRI for $697 million, which will make DyStar a wholly-owned subsidiary, potentially ending a nearly decade-long legal dispute with KIRI [2][3][4] Group 1: Acquisition Details - The acquisition price of $697 million (approximately 5.02 billion RMB) is significantly higher than previous valuations, reflecting the rising value of DyStar's shares over the years [2][3] - DyStar is a leading provider of high-end dye and chemical solutions, and the acquisition is seen as a strategic move to consolidate resources and eliminate potential shareholder disputes [4][5] Group 2: Historical Context - DyStar faced bankruptcy in 2010 and was acquired by KIRI for €40 million, while Zhejiang Longsheng initially invested €22 million in KIRI's convertible bonds, later converting to a 62.43% stake in DyStar [3][4] - A series of legal battles began in 2015 when KIRI accused Zhejiang Longsheng of oppressing minority shareholders, leading to multiple court rulings that increased the valuation of the stake [3][4] Group 3: Financial Performance - Zhejiang Longsheng's revenue and profit have fluctuated significantly from 2020 to 2024, with a notable decline in 2023 due to intense market competition and price pressures [6][7] - The company reported a revenue of 156.05 billion RMB in 2020, down 26.96% year-on-year, and a net profit of 41.76 billion RMB, down 16.86% [6] - In 2024, the company anticipates a rebound with projected revenue of 158.84 billion RMB, a slight increase of 3.80%, and a net profit of 20.30 billion RMB, reflecting a growth of over 30% [7]