Investor Presentation | Japan M Foundation Chemicals: Wave of Industry Restructuring Sweeping Across Asia Simplified Version) l Petrochemical majors (industry view: Attractive): Expecting continued weak petrochemical demand and ethylene utilization rates, but in addition to China's anti-involution policies, there are signs of naphtha cracker downsizing in South Korea; believe the overall mood is improving. Asia petchem prices and spreads unlikely to fall further, but probably lack recovery momentum. Added i ...

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: Electronic Chemicals and Fine Chemicals in Japan - **Industry View**: Both Electronic Chemicals and Fine Chemicals are rated as "In-Line" by Morgan Stanley, indicating expected performance in line with the broader market [5][6] Company Insights - **Resonac Holdings (4004)**: - Rating: Overweight (OW) - Market Cap: JPY 1,116.8 billion - Price Potential: Target return of -5.6% for 2025, with P/E ratios projected at 14.9 for 2025 and 31.1 for 2026 [7][8] - Focus on expanding targets beyond High Bandwidth Memory (HBM) and Graphics Processing Units (GPU) [6] - **Sumitomo Bakelite (4203)**: - Rating: Overweight (OW) - Market Cap: JPY 472.7 billion - Price Potential: Target return of 9.1% for 2025, with P/E ratios of 24.1 for 2025 and 15.6 for 2026 [7][8] - Strong performance in encapsulants [6] - **Tokyo Ohka Kogyo (4186)**: - Rating: Equal-weight (EW) - Market Cap: JPY 804.1 billion - Price Potential: Target return of -28.5% for 2025, with a declining market share in photoresists [6][7] - **Mitsubishi Gas Chemical (4182)**: - Rating: Overweight (OW) - Market Cap: JPY 563.5 billion - Price Potential: Target return of 24.0% for 2025, with strong advanced packaging materials [6][7] - **NOF Corporation (4403)**: - Rating: Equal-weight (EW) - Market Cap: JPY 654.0 billion - Price Potential: Target return of 1.3% for 2025, with a focus on defense-related products [6][7] Financial Metrics - **Stock Price Performance**: - As of November 17, 2023, stock prices for key companies in the sector are being monitored, with Resonac Holdings and Tokyo Ohka Kogyo showing significant movements [9][10][11][13][15]. - **Valuation Ratios**: - Various companies exhibit differing P/E ratios, P/BV ratios, and dividend yields, indicating varied market expectations and financial health [7][8]. Market Trends - **AI-related Products**: - There is a notable trend towards AI-related products, with companies like Resonac focusing on semiconductor materials driven by increased demand for AI technologies [40][45]. - **Market Share Dynamics**: - Companies like Tokyo Ohka Kogyo are experiencing a downward trend in market share for specific products, indicating competitive pressures within the industry [6][7]. Other Important Considerations - **Forex Sensitivity**: - Companies are sensitive to foreign exchange fluctuations, which can impact operational profits [8]. - **Shareholder Returns**: - Companies are focusing on shareholder returns through dividends and buybacks, with varying payout ratios [8]. - **Medium-term Plans**: - Companies have outlined medium-term plans with specific operational goals and target margins, indicating strategic focus areas for growth [8]. This summary encapsulates the key insights from the conference call, highlighting the performance outlook, financial metrics, and strategic directions of the companies within the Electronic Chemicals and Fine Chemicals sectors in Japan.

LUOYANG, China, Oct. 20, 2025 (GLOBE NEWSWIRE) -- TRUNNANO, a leading global nanomaterials manufacturer, officially announced that its R&D team has achieved a breakthrough in the preparation technology of spherical silica SiO2 powder, successfully launching a new generation of high-performance spherical silica SiO2 powder. This marks a technological leap for TRUNNANO in the field of fine chemicals and will provide superior material solutions for multiple key industries worldwide. Spherical silica SiO2, a fu ...

Core Insights - The chemical industry is a pillar of the national economy but is also a high-energy and high-carbon emission sector, making it crucial for China's "dual carbon" goals [1] - Under the guidance of the People's Bank of China, Jiujiang has become the first city in Jiangxi Province to implement a financial pilot program for chemical transformation, aimed at supporting green and low-carbon upgrades in the industry [1] Group 1 - The People's Bank of China, Jiangxi Branch, and Jiujiang Branch have facilitated the first chemical transformation loan in the province, supporting a project for heat recovery in a fine chemical enterprise [2] - The enterprise, which produces products like ortho-chlorobenzoic acid and quinaldic acid, previously wasted a significant amount of high-heat steam during production, leading to energy inefficiency [2] - The new heat recovery system will convert waste steam into reusable high-quality thermal energy, significantly reducing energy waste and improving energy efficiency [2] Group 2 - The enterprise has developed a transformation action plan that includes current carbon emission levels, short, medium, and long-term reduction targets, and a financing plan, aiming to reduce carbon emissions by 1,296 tons and decrease carbon intensity by 22% by the end of 2025 [2] - This loan marks another innovative practice by Jiangxi Bank in the field of transformation finance, following previous loans for agricultural and copper industry transformations [2] - Jiangxi Bank focuses on the financing needs of traditional industries for low-carbon transformation, continuously enhancing its financial service system for key sectors like chemicals, agriculture, and copper [2]

Summary of Investor Presentation on Chemicals Industry Industry Overview - The chemicals industry is undergoing a significant restructuring wave across Asia, particularly affecting petrochemical majors and electronic chemicals [1][3][6] Key Insights on Petrochemical Majors - **Industry View**: Attractive - **Demand and Utilization**: Continued weak demand for petrochemicals and low ethylene utilization rates are expected. However, there are signs of improvement in the overall mood, influenced by China's anti-involution policies and naphtha cracker downsizing in South Korea [6] - **Price Trends**: Asia's petrochemical prices and spreads are unlikely to decline further but may lack recovery momentum [6] - **Investment Indicators**: Remain low, with shares generally viewed as undervalued [6] - **Recommended Stocks**: - **Sumitomo Chemical (4005)**: Focused on growth in agrochemicals and IT sectors, with a V-shaped recovery in pharmaceutical earnings. Current price: ¥482, target price: ¥760 [9][12] - **Asahi Kasei (3407)**: Current price: ¥1,196, target price: ¥1,450 [9][12] - **Mitsui Chemicals (4183)**: Current price: ¥3,719, target price: ¥4,500 [9][12] Insights on Electronic Chemicals - **Industry View**: In-line - **Demand Recovery**: Gradual recovery in demand for legacy semiconductors alongside the expansion of AI semiconductors. Silicon wafer recovery continues, particularly for 300mm wafers [6] - **Stock Recommendations**: - **ZEON (4205)**: Current price: ¥1,700, target price: ¥2,000 [9][12] - **Shin-Etsu Chemical (4063)**: Current price: ¥4,545, target price: ¥5,500 [9][12] Insights on Fine Chemicals - **Industry View**: In-line - **Revenue Improvement**: Significant revenue growth in carbon fiber composite materials due to recovery in aircraft applications. **Toray (3402)** is highlighted as a top pick [6] - **Stock Recommendations**: - **Toray (3402)**: Current price: ¥970, target price: ¥1,350 [9][12] - **DIC (4631)**: Current price: ¥3,589, target price: ¥3,500 [9][12] Additional Observations - **Investment Appeal**: The overall investment appeal in the chemicals sector is driven by specific company strategies and market conditions, with a focus on undervalued stocks and sectors poised for growth [6][12] - **Market Metrics**: The report includes various financial metrics such as P/E ratios, P/CF ratios, and EV/EBITDA ratios for the recommended stocks, indicating a comprehensive analysis of the market landscape [12] Conclusion - The chemicals industry in Asia is positioned for restructuring, with specific companies showing strong potential for growth and recovery. Investors are encouraged to consider the recommended stocks based on their strategic focus and market conditions [6][12]

Summary of the Investor Presentation on Chemicals Industry Industry Overview - The chemicals industry is undergoing a significant restructuring wave across Asia, particularly affecting petrochemical majors and electronic chemicals [1][3][6]. - The overall sentiment in the petrochemical sector is improving despite continued weak demand and low utilization rates for ethylene [6]. Key Insights on Specific Sectors Petrochemical Majors - **Industry View**: Attractive - **Current Trends**: Weak demand for petrochemicals is expected to persist, but there are signs of naphtha cracker downsizing in South Korea, which may lead to a more favorable market environment [6]. - **Price and Spread Outlook**: Asia's petrochemical prices and spreads are unlikely to decline further but may lack recovery momentum [6]. - **Investment Recommendations**: - **Overweight (OW)**: Sumitomo Chemical (4005), Asahi Kasei (3407), Mitsui Chemicals (4183) - **Equal Weight (EW)**: Tosoh (4042), Mitsubishi Chemical (4188) [6][9]. Electronic Chemicals - **Industry View**: In-Line - **Current Trends**: Demand for both AI semiconductors and legacy semiconductors is gradually recovering, with a steady growth trend observed [6]. - **Investment Recommendations**: - **Overweight (OW)**: Zeon (4205), Shin-Etsu Chemical (4063) - **Equal Weight (EW)**: Nissan Chemical (4021), SUMCO (3436), Kuraray (3405), Dexerials (4980) - **Underweight (UW)**: Nitto Denko (6988) [6][9]. Fine Chemicals - **Industry View**: In-Line - **Current Trends**: Significant revenue improvement in carbon fiber composite materials due to recovery in aircraft applications [6]. - **Investment Recommendations**: - **Overweight (OW)**: Toray (3402) - **Equal Weight (EW)**: DIC (4631) - **Underweight (UW)**: Teijin (3401) [6][9]. Financial Metrics and Valuations - **Petrochemical Majors**: Average P/E ratio of 9.1, P/CF of 7.5, and EV/EBITDA of 6.6, indicating undervaluation [11]. - **Electronic Chemicals**: Average P/E ratio of 17.8, P/CF of 10.2, and EV/EBITDA of 8.8, suggesting a stable valuation [11]. - **Fine Chemicals**: Average P/E ratio of 29.9, indicating a premium valuation compared to other sectors [11]. Additional Insights - Investment indicators in the petrochemical sector remain low, suggesting that shares are generally undervalued [6]. - The focus on accelerating growth in agrochemicals and IT-related sectors is highlighted as a strategic move for companies like Sumitomo Chemicals [6]. - The recovery in earnings from pharmaceutical subsidiaries is noted as a positive factor for Sumitomo Chemicals [6]. Conclusion - The chemicals industry in Asia is poised for restructuring, with specific sectors showing potential for recovery and growth. Investment opportunities exist in selected companies, particularly those focusing on innovation and strategic growth areas.