Core Viewpoint - The domestic methanol market is gradually strengthening amid rising international geopolitical tensions, but the rebound in prices is expected to be limited due to insufficient demand support [1] Supply and Demand Analysis - The methanol market in 2025 is projected to experience a supply-demand imbalance due to increased supply and weak demand, leading to a price decline of over 15% by year-end compared to the beginning of the year [2] - Supply-side factors include high operating rates of coal and natural gas methanol production facilities at 80% and 49% respectively, with an overall industry operating rate exceeding 78%, resulting in ample production [2] - The demand side is constrained by weak traditional downstream demand and insufficient growth in emerging demand, particularly in the methanol-to-olefins (MTO) sector, which is affected by negative margins [2] External Influences - International geopolitical situations and changes in imports significantly impact the methanol market, with Iranian methanol production currently at a low operating rate of around 16% due to domestic issues, leading to a substantial decrease in exports to China [3] - In January, China's methanol import volume is estimated to be between 1.05 million and 1.1 million tons, a decrease of approximately 400,000 tons from the previous month, which may boost market confidence [3] Market Dynamics - The current methanol spot market is characterized by platform consolidation, with expectations of inventory reduction at ports, but weakened demand from sectors like MTO may limit price movements [4] - In 2026, methanol prices may exhibit seasonal volatility, with potential price increases in the first half due to lower import pressure, while the second half may face significant import challenges [4] - Long-term prospects indicate that green methanol could become a core focus due to its applications in shipping and electric vehicles, driven by EU carbon border adjustment mechanisms, leading to a shift towards higher industry concentration and green transformation [4]

Core Viewpoint - Methanol prices have ended a downward trend since July of the previous year and have entered an upward market in 2026, supported by low valuations, expectations of inventory reduction at ports, and geopolitical factors that have increased price volatility [1] Group 1: Inventory and Supply Dynamics - Methanol port inventory has been in a seasonal accumulation cycle since May of the previous year, reaching a historical high in September, which has suppressed prices [2] - Due to the cold weather, Iranian methanol production facilities began to shut down in November 2025, leading to a significant reduction in methanol imports to China, which is expected to alleviate port inventory pressure [3] - As of January 15, 2026, coastal methanol inventory stands at 1.42 million tons, down approximately 220,000 tons from the peak in mid-November 2025, indicating a marginal improvement in supply-demand dynamics [3] Group 2: Price and Profitability Trends - Domestic methanol production is characterized by high supply and low profitability, with overall operating rates at 77.91% as of January 15, 2026, slightly down from the previous week but up year-on-year [4] - Production profits have significantly decreased, with coal-based methanol in Inner Mongolia showing a loss of 251.60 yuan/ton, a 17.79% decrease month-on-month, and similar declines observed in other regions [4] - The upward movement in methanol prices is constrained by rising raw material costs, particularly during the winter demand peak for coal and natural gas [4] Group 3: Downstream Demand and Market Sentiment - The operating rate of methanol-to-olefins (MTO) facilities has decreased to 80.75%, with several plants undergoing maintenance, indicating pressure on downstream demand for methanol [5] - Traditional downstream sectors such as formaldehyde and acetic acid are performing poorly, with overall operating rates at historically low levels, limiting demand support for methanol as the Spring Festival approaches [6] - The geopolitical situation, particularly tensions between the U.S. and Venezuela, has raised concerns about methanol supply, further contributing to price volatility [3][6]

1. Report Industry Investment Rating - The investment rating for methanol is "oscillating with a slight upward bias" [2] 2. Core Viewpoints of the Report - Short - term methanol investment will be mainly oscillating, supported by reduced imports and the expectation of tight supply - demand balance. High port inventory but increasing de - stocking expectations, stable coal prices providing cost support, and geopolitical sentiment enhancing market resilience. The core price range is expected to be 2200 - 2300 yuan/ton [2] 3. Summary by Related Catalogs Supply - This week, methanol supply contracted overall, affected by both import and domestic production adjustments. Import volume decreased significantly, and although domestic capacity utilization increased slightly, total output declined due to new maintenance and production cuts in some plants. Next period, supply is expected to recover as more plants plan to resume production and there will be fewer maintenance and production cuts. Different production processes have different operating rates, with coal - based methanol operation relatively stable and natural - gas - based processes fluctuating slightly [2] Demand - This week, methanol demand remained weak in the off - season, showing significant structural differentiation. Total consumption decreased slightly week - on - week, lacking an upward driver. The main downstream methanol - to - olefins (MTO) industry was mediocre, with regional differences in operating rates. Traditional downstream industries generally had weak demand, with most industries' loads declining. In the short term, the demand side will remain weak and needs the resumption of downstream plants, the release of terminal demand, or favorable policies [2] Inventory - This week, methanol inventory increased at a high level, and the pressure to reduce inventory has not been alleviated. Inland enterprise inventory has been increasing for four weeks, and port inventory also rose. Although the unloading of foreign vessels was smooth, the提货 volume in some warehouses decreased. Overall, the current inventory is at a high level, and the supply - demand contradiction has eased but not fundamentally improved [2] Methanol Profit - This week, the profits of methanol and its downstream industrial chain showed obvious differentiation. Methanol - end profits improved slightly, while most downstream industries were still under pressure. The losses of coal - based and natural - gas - based methanol production processes narrowed, and only the profit of coke - oven - gas - based production decreased slightly but remained profitable. Most downstream industries saw increased losses, and only a few products like glacial acetic acid and MTBE had improved profits [2] Politics - This week, the political situation in Iran was tense both domestically and internationally. Domestically, there were sporadic demonstrations due to rising prices and currency depreciation, and the situation was gradually stabilizing. Internationally, the US and Israel were accused of interfering in Iran's internal affairs, and Iran's military, president, and permanent representative to the UN strongly responded [2] Trading Strategy - For unilateral trading, the strategy is "oscillating with a slight upward bias"; for arbitrage, it is to "wait and see". Key factors to watch include downstream demand, olefin procurement, spring maintenance, and geopolitics [2]

Core Viewpoint - The announcement from Lianhong New Materials indicates the successful commissioning of its integrated project, which is expected to enhance product diversity and demonstrate industry chain advantages, positively impacting performance despite uncertainties in product profitability [1] Group 1: Project Details - The integrated project by Lianhong New Materials commenced construction in April 2024 and is scheduled for overall completion by September 2025 [1] - Key production units include: - 300,000 tons/year of Propylene Oxide (PO) - 1,300,000 tons/year of Methanol-to-Olefins (MTO) - 200,000 tons/year of Ethylene-Vinyl Acetate (EVA) - 240,000 tons/year of Polyether Polyols (PPG) - All major units have successfully started operations and produced qualified products, currently running stably [1] Group 2: Impact on Company Performance - The project is expected to enrich the company's product structure and highlight its industry chain advantages [1] - There is an anticipation of a positive impact on the company's performance due to the project, although product profitability remains uncertain [1]

Core Insights - The Lianhong Gelun integrated project has achieved a significant milestone with the successful commissioning of a 1.3 million tons/year Methanol-to-Olefins (MTO) unit and a 200,000 tons/year Ethylene-Vinyl Acetate (EVA) unit, marking a smooth operation and production of qualified products [1] Group 1: Project Progress - The project team has systematically advanced the trial production preparations since the overall completion of the Lianhong Gelun integrated project in late September 2025, including developing various contingency plans and conducting equipment checks [1] - After the initiation of feedstock input, the team meticulously calculated and controlled the reaction parameters and conditions of each unit to ensure a successful startup [1] Group 2: Production Achievements - The MTO unit commenced methanol feed on December 10 at 18:18, with qualified ethylene and propylene products entering storage by December 11 at 01:30, achieving a 100% qualification rate for the first batch, setting a new record for similar units [1] - Following the commissioning of the EVA unit, Lianhong New Materials' EVA production capacity has increased from 160,000 tons/year to 360,000 tons/year, enhancing production flexibility and market competitiveness [2]

Group 1 - The Lianhong Gelun integrated project achieved a significant milestone on December 10, with the successful commissioning of a 1.3 million tons/year Methanol-to-Olefins (MTO) unit and a 200,000 tons/year Ethylene-Vinyl Acetate (EVA) unit, marking a smooth operation and qualified product output [1][3] - Since the overall completion of the Lianhong Gelun integrated project in late September 2025, the project team has systematically advanced trial production preparations, ensuring orderly operations through comprehensive planning and training [1] - The MTO unit achieved a 100% product qualification rate during its first feed, setting a new record for similar units, and will provide stable raw material support for downstream high-end new material products [1] Group 2 - Following the commissioning of the EVA unit, Lianhong New Materials' EVA production capacity increased from 160,000 tons/year to 360,000 tons/year, enhancing production flexibility and market competitiveness [3] - The integrated project’s ongoing commissioning of various units is expected to further drive the company's scale and profitability growth [3]

Core Insights - The Lianhong New Materials' subsidiary, Lianhong Gerun, has achieved significant progress with the successful commissioning of its 130,000 tons/year Methanol-to-Olefins (MTO) unit and 20,000 tons/year Ethylene-Vinyl Acetate (EVA) unit, marking a smooth operation and qualified product output [1] Group 1 - The MTO unit commenced methanol feed on December 10 at 18:18, with qualified ethylene and propylene products entering storage by December 11 at 01:30, achieving a 100% product qualification rate on the first run, setting a new record for similar units [1] - The EVA unit's production capacity has increased from 160,000 tons/year to 360,000 tons/year, enhancing production flexibility with both tubular and kettle methods, better meeting the diverse application needs in photovoltaic, cable, and foaming sectors, thus strengthening market competitiveness [2] - The ongoing commissioning of the integrated project’s units is expected to further drive the company's scale and profitability growth [3]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Views of the Report - The upward space of methanol 01 contract is limited. The downstream MTO profit is poor, and further price increases may lead to negative demand feedback. The downstream restocking willingness is weak due to profit levels and high inventories, and the inland profit is also poor [4][39]. - Previously, it was recommended to sell out - of - the - money put options for the 01 contract and pay attention to long opportunities in the far - month contracts. Currently, it is suggested to hold the 01 put - selling option until maturity, and it is not recommended to chase the rise of the 01 contract [4][39]. Group 3: Summaries by Relevant Catalogs 1. Market Review - From November 17 to December 1, the methanol market rebounded from the bottom, mainly due to the expected changes brought by the implementation of Iranian plant shutdowns, which was in line with previous judgments [4][9][39]. 2. Basis and Spread - The basis remained stable, and the near - far month spread rebounded slightly. The near - month price, which was previously oversold, rebounded relatively more due to the change in expectations. On November 17, the basis in East China was - 19 yuan/ton, and on December 1, it was - 16 yuan/ton. The 01 - 05 spread was - 116 yuan/ton on November 17, dropped to - 137 yuan/ton on November 19, and rebounded to - 96 yuan/ton on December 1 [10]. 3. Supply - side Analysis 3.1 Cost and Operation - The profit of upstream coal - to - methanol slightly rebounded. The inland methanol price was relatively stronger than that in coastal areas, and the recent slight decline in coal prices led to the profit rebound. However, it is still the peak coal - using season, and the cost is unlikely to drop significantly, which supports the methanol price. Last week, the coal - to - methanol operation rate remained stable at a high level, while the gas - to - methanol operation rate declined. As of December 1, the Qinhuangdao steam - coal closing price was 821 yuan/ton, a decrease of 10 yuan/ton compared to November 17, and the Datong steam - coal wagon - board price was 710 yuan/ton, a decrease of 15 yuan/ton. As of November 27, the weekly operation rate of coal - to - methanol enterprises was 82.42%, a month - on - month increase of 0.11 percentage points and a year - on - year increase of 2.17 percentage points; the weekly operation rate of gas - to - methanol enterprises was 45.71%, a month - on - month decrease of 4.87 percentage points and a year - on - year decrease of 2.19 percentage points [12]. 3.2 Inventory - The turning point of port inventory accumulation has appeared. After the implementation of Iranian plant shutdowns, the import pressure of methanol in the first quarter of next year will be greatly relieved. As of the week of November 27, the total port inventory was 116.75 million tons, a month - on - month decrease of 7.64 million tons and a year - on - year increase of 16.57 million tons. The inland inventory was lower than the same period in previous years. However, the impact of Iranian plant shutdowns on imports is mainly in January - February next year, and the short - term supply - demand contradiction and high port inventory are difficult to solve in the 01 contract [18]. 4. Demand - side Analysis 4.1 MTO Demand - The profit of downstream MTO has significantly deteriorated, especially in the northwest region, mainly due to the weak price of downstream polyolefins. As of November 27, the weekly operation rate of downstream methanol - to - olefins was 86.47%, a month - on - month decrease of 0.55 percentage points and a year - on - year increase of 1.76 percentage points; the weekly operation rate of enterprises purchasing methanol externally for olefin production was 82.31%, a month - on - month decrease of 0.65 percentage points and a year - on - year decrease of 0.75 percentage points. The MTO demand restricts the upward movement of methanol prices [22]. 4.2 Traditional Demand - The weighted operation rate of traditional downstream industries slightly rebounded, mainly due to the increase in the acetic acid operation rate. However, winter is still the off - season for traditional demand, and the demand for methanol is limited [29]. 5. Summary and Outlook - The market review is the same as the previous part. The view is that the 01 contract put - selling option should be held until maturity, and it is not recommended to chase the rise of the 01 contract. The strategy is to hold the 01 put - selling option until maturity [39][40].

Report Industry Investment Rating - Not provided Core View of the Report - The supply - demand structure of the methanol market is expected to improve, and the methanol futures 2601 contract is expected to maintain a volatile trend [2][3] Summary by Relevant Catalogs Iran Export Restrictions - On October 9, 9 ships responsible for Iran's methanol transportation to China were included in the SDN list, with a total annual transportation capacity of over 4 million tons, accounting for about 40% of Iran's methanol exports to China, which may cause a significant short - term reduction in Iran's methanol arrivals [2] - The sanctions cut off some logistics channels and led to insurance suspension, causing some ships to be stranded. In the short term, the unloading in East China ports will slow down, and the futures price will rise. In the long term, a new transportation network may be built, and the proportion of non - Iran sources may increase, but the cost will be higher [2] Decline in China's Imports - China imports 25% - 30% of its methanol from Iran. The sanctions have cut off logistics channels and increased "secondary sanctions" risks, leading to shipping insurance suspension and ship scheduling tension [2] - In the short term, due to insufficient alternative capacity and longer voyages, the unloading in East China ports will slow down, and the futures price will rise. In the long term, new transportation networks may be built, and non - Iran sources may increase, but the cost will be 300 - 400 yuan/ton higher [2] Demand Recovery - After the National Day holiday, MTO devices restarted, and the average operating load reached 87.97% as of October 10, 2025, a 4.94 - percentage - point increase. The futures profit of methanol - to - olefins decreased by 14 yuan/ton [3] - As of October 10, 2025, the methanol inventory in East and South China ports was 1273000 tons, a slight increase. If Iran's arrivals decline and MTO devices' operating load rises, the inventory may fall [3]

Core Viewpoint - The company, Huisheng Engineering, reported a strong financial turnaround in 2024, with significant revenue growth and profitability recovery, indicating a positive shift in its business trajectory [1][4]. Financial Performance - The total revenue for 2024 reached approximately 5.65 billion yuan, marking a year-on-year increase of 47.0%, ending a previous downward trend [1]. - The net profit attributable to shareholders was 140 million yuan, a significant recovery from losses in the previous year [1]. - Operating cash flow improved dramatically, with a net cash flow from operating activities of about 3.09 billion yuan, up from 650 million yuan in the same period last year [2]. Business Segments - The core petrochemical segment generated approximately 4.66 billion yuan in revenue, reflecting a year-on-year growth of 54.7% [2]. - The coal chemical segment reported revenue of about 820 million yuan, an increase of 33.8% [2]. - The new energy segment achieved a breakthrough with revenue of approximately 26.8 million yuan [2]. Order Growth and Talent Acquisition - New signed orders surged to approximately 10.87 billion yuan, representing a staggering year-on-year increase of 2,563.6% [3]. - The total value of uncompleted contracts reached about 25.72 billion yuan, ensuring future revenue growth [3]. - The company expanded its workforce significantly, hiring over 30 key professionals and more than 100 senior talents, increasing total employees to 1,867, up by 259 from the previous year [3]. Green Transformation and International Strategy - Huisheng Engineering has made substantial progress in green transformation, successfully implementing technologies for green hydrogen, green ammonia, and biomass [4]. - The company has expanded its international project footprint, with overseas revenue exceeding 70% for the first time, becoming a major growth driver [4]. - Strategic collaborations with industry giants like Saudi Aramco and ADNOC have been deepened, with several high-profile projects actively progressing [4]. Valuation Perspective - The current price-to-earnings ratio is below 8 times, and the price-to-book ratio is approximately 0.4 times, indicating that the company is significantly undervalued [4].