Market Performance - The new materials sector experienced an increase this week, with the new materials index rising by 1.11%, outperforming the ChiNext index by 0.46% [1] - Over the past five trading days, the synthetic biology index rose by 3.07%, while semiconductor materials fell by 4.58%, electronic chemicals decreased by 2.53%, biodegradable plastics increased by 3.46%, industrial gases dropped by 1.29%, and battery chemicals surged by 8.24% [1] Price Tracking - Amino acids prices showed mixed results: valine at 12,550 CNY/ton (up 1.21%), arginine at 21,500 CNY/ton (down 0.69%), tryptophan remained unchanged at 32,500 CNY/ton, and methionine at 20,250 CNY/ton (down 2.64%) [2] - Biodegradable materials prices remained stable for PLA (FY201 injection grade at 17,800 CNY/ton and PLA (REVODE201 film grade at 17,000 CNY/ton), while PBS decreased by 1.69% to 17,500 CNY/ton and PBAT fell by 0.51% to 9,800 CNY/ton [2] - Vitamins prices remained unchanged: vitamin A at 63,000 CNY/ton, vitamin E at 52,500 CNY/ton, vitamin D3 at 212,500 CNY/ton, calcium pantothenate at 42,000 CNY/ton, and inositol at 30,500 CNY/ton [2] - Industrial gases and wet electronic chemicals prices remained stable: UPSSS grade hydrofluoric acid at 11,000 CNY/ton and EL grade hydrofluoric acid at 6,100 CNY/ton [2] - In the plastics and fibers category, carbon fiber remained at 83,750 CNY/ton, polyester industrial yarn at 8,400 CNY/ton, and aramid at 81,800 CNY/ton (down 13.44%) [2] Investment Recommendations - The State Council released a white paper on "China's Action for Carbon Peak and Carbon Neutrality," emphasizing the focus on renewable energy such as wind power for future development [3] - The white paper projects that by 2030, China's cumulative installed wind power capacity will reach 1.3 billion kW, with expectations of 2 billion kW by 2035 and 5 billion kW by 2060 [3] - The wind power industry is expected to maintain a high prosperity pattern, presenting significant development opportunities for upstream materials, with recommendations to focus on companies like Times New Material and Mega Chip Color [3] Lithium Hexafluorophosphate Price Recovery - Lithium hexafluorophosphate, a key raw material for electrolytes, saw a price rebound, rising from a low of 50,000 CNY/ton to 121,500 CNY/ton as of November 7, 2025 [4] - The demand from the downstream electric vehicle and energy storage industries has surged, significantly increasing the procurement volume of lithium hexafluorophosphate by electrolyte manufacturers [4] - Despite leading companies operating at full capacity, the overall supply remains tight due to previous overcapacity leading to industry consolidation, suggesting potential for further price increases and recovery of profitability in the supply chain [4]

Group 1 - The core viewpoint is that the implementation of policies aimed at plastic pollution control is expected to significantly boost the demand for biodegradable materials, particularly biodegradable plastics [1][2] - Since the release of the policy by the National Development and Reform Commission and the Ministry of Ecology and Environment in 2020, various provinces and industries have issued related implementation opinions and plans, which, if executed, could lead to rapid growth in the demand for biodegradable materials [1] - The main application areas for biodegradable plastics in the future are expected to be biodegradable films and express packaging [1] Group 2 - The current market price of PBAT is at a historical low of 9,850 yuan/ton as of September 21, 2025, with a low capacity utilization rate of 15.8% projected for 2025 [2] - The average operating rates for raw materials BDO, PTA, and AA in August were 45%, 74%, and 53% respectively, indicating a challenging market environment for PBAT [2] - PLA market prices have been under pressure, with the average price stabilizing at 17,200 yuan/ton as of September 21, 2025, reflecting a 1.7% decline since the beginning of the year and a 42.7% drop from the 2021 peak [3] Group 3 - Companies involved in the biodegradable plastic industry include PBAT producers such as Jinfat Technology (600143.SH), Changhong High-Tech (605008.SH), and Hengli Petrochemical (600346.SH), as well as PLA producers like Haizheng Biomaterials (688203.SH), Jindan Technology (300829.SZ), and Lianhong Xinke (003022.SZ) [4] - Raw material suppliers include adipic acid producers like Hualu Hengsheng (600426.SH) and Huafeng Chemical (002064.SZ), and BDO suppliers such as Sanwei Co., Ltd. (603033.SH) and Zhongtai Chemical (002092.SZ) [4]

Investment Rating - The report maintains an investment rating of "B" for the new materials sector, indicating a positive outlook compared to the market [1]. Core Insights - The new materials sector has shown strong performance, with the new materials index rising by 2.50%, outperforming the ChiNext index by 0.39%. Key sub-sectors such as semiconductor materials and battery chemicals have seen significant increases, with battery chemicals up by 13.68% [3][19]. - The report highlights opportunities in upstream new materials for the automotive industry, driven by government policies aimed at stabilizing growth in the sector. The target for total vehicle sales in 2025 is approximately 32.3 million units, with a projected 20% increase in new energy vehicle sales [6]. Market Performance - The new materials sector has outperformed the broader market, with significant gains in various sub-sectors over the past week. The synthetic biology index increased by 2.88%, semiconductor materials by 9.04%, and electronic chemicals by 6.88% [3][19]. - The report notes that 60.67% of stocks in the new materials sector achieved positive returns, with notable performers including Xiamen Tungsten (up 26.79%) and Hengshen Co. (up 20.33%) [24]. Price Tracking - The report provides weekly price updates for key materials. For instance, the price of valine is 12,600 CNY/ton, down 1.18%, while the price of lysine (98.5%) is 6,950 CNY/ton, up 2.21% [29]. - In the biodegradable plastics segment, the price of PLA (injection grade) remains stable at 17,800 CNY/ton, while PBS is also stable at 17,800 CNY/ton [33]. Investment Recommendations - The report suggests focusing on companies such as Times New Material and Jun Ding Da, which are positioned to benefit from the growth in the automotive sector and new materials [6].

Group 1: Core Insights - The report from Huazhong Securities highlights the active development in synthetic biology, emphasizing its role in addressing major challenges such as health, climate change, and resource security [2] - The National Energy Administration announced the first batch of pilot projects for green liquid fuel technology, with nine projects selected to promote new technologies and business models in the energy sector [3] Group 2: Industry Developments - The synthetic biology index from Huazhong Securities decreased by 5.72 points to 1549.03 during the week of August 4-8, 2025, underperforming compared to the Shanghai Composite Index and the ChiNext Index [2] - Microgen announced a partnership with Cargill to expand the market application of allulose sugar in China, leveraging Cargill's resources and networks [4] - The first biodegradable plastic production facility in Chongqing, with an annual capacity of 60,000 tons, has been successfully launched, filling a gap in the biodegradable plastic industry in the region [5] - The Shenzhen Institute of Advanced Technology developed a new mini CRISPR nuclease, MiniCasUltra, which significantly enhances gene editing efficiency while maintaining a compact size [5] - PHA water-based barrier coatings have successfully completed industrial-scale production, marking a significant advancement in the commercialization of biodegradable materials [5]

Core Viewpoint - The upgrade of the "plastic ban" has led to a significant increase in the demand for polylactic acid (PLA) in various sectors, including packaging and disposable tableware, with China's PLA consumption expected to reach 240,000 tons in 2024, a year-on-year increase of 60% [1][12]. Industry Overview - Polylactic acid (PLA) is a biodegradable polymer material derived from the polymerization of lactic acid, which can be obtained from renewable plant resources through fermentation [4]. - PLA has good biocompatibility and can be decomposed by microorganisms in the natural environment, making it an environmentally friendly material [4]. Industry Development History - The PLA industry in China has gone through three main stages: the embryonic stage (1979-2006), the initiation stage (2007-2019), and the explosive growth stage (2020-present) [4][5]. - The government has implemented policies to restrict the use of non-degradable plastics, which has significantly boosted the demand for PLA [5][6]. Industry Chain - The PLA industry chain includes upstream raw materials (corn, sugarcane, etc.), midstream PLA production, and downstream applications in food packaging, disposable tableware, and medical devices [8]. Current Industry Status - The demand for PLA has surged due to the expanded scope of the plastic ban, with significant advancements in domestic production technology leading to lower costs and improved product quality [12]. - In the first four months of 2025, China's imports of primary PLA amounted to $48.39 million, a year-on-year increase of 42.69%, while exports reached $22.24 million, up 35.53% [14]. Key Companies' Performance - The PLA industry in China is characterized by strong leading companies, such as Anhui Fengyuan and Zhejiang Haizheng, which have established comprehensive industry chains and technological advantages [16][20]. - Anhui Fengyuan has a complete industry chain from corn planting to PLA deep processing, while Zhejiang Haizheng has achieved significant breakthroughs in the industrialization of key PLA raw materials [17][20]. Industry Development Trends 1. The global upgrade of plastic ban policies is a core driver for the PLA industry's growth, with increasing consumer awareness of environmental issues further boosting demand [22]. 2. Technological innovations and industry chain integration are accelerating, with domestic companies reducing reliance on imported technologies [23][24]. 3. The demand for high-end PLA products is growing, leading to a transformation towards high-value-added sectors, while international competition is intensifying [25].