Investment Rating - The report maintains a neutral rating for the chemical industry [2]. Core Insights - The current cycle may be nearing its end, with expectations for demand recovery. Infrastructure and export demand are expected to remain strong in 2024, while the real estate cycle continues to decline. The chemical industry is anticipated to experience a phase of price and profit level rebound in Q2 2024, although overall performance for the year will remain under pressure [4][5]. - The report emphasizes the importance of identifying industries with marginal supply-demand changes, focusing on both domestic and global market dynamics [6][7]. Summary by Sections Industry Valuation and Economic Indicators - The report tracks various indicators such as the comprehensive prosperity index of the chemical industry and industrial added value [3]. Price Indicators - It includes analysis of PPI, PPIRM, and CCPI, along with price differentials for chemical products [3]. Supply-side Indicators - Key metrics include capacity utilization rates, energy consumption, fixed asset investment, inventory levels, and ongoing construction projects [3]. Import and Export Indicators - The report breaks down the contribution of import and export values [3]. Downstream Industry Performance - It examines the performance of downstream sectors such as PMI, real estate, home appliances, automotive, and textiles [3]. Economic Efficiency Indicators - The report discusses three major economic efficiency indicators for the industry [3]. Global Macro and End Market Indicators - It analyzes global macroeconomic indicators including purchasing manager indices, GDP year-on-year growth, civil construction starts, consumer confidence indices, and automotive sales [3]. Global Chemical Product Prices and Differentials - The report provides insights into the prices and differentials of chemical raw materials, intermediate products, and sub-industries like resins and fibers [3]. Global Industry Economic Efficiency Indicators - It covers changes in sales revenue, profitability, growth capacity, solvency, operational capacity, and per-share indicators [3]. Chemical Product Prices and Production Indicators in Europe and the US - The report includes prosperity indicators, confidence indices, capacity utilization rates, production indices, PPI, and production indices for the chemical industry in Europe and the US [3].

Group 1 - The core viewpoint of the report indicates that the chemical industry is approaching the end of its current cycle, with a focus on demand recovery in 2024, particularly in infrastructure and exports, while the real estate cycle continues to decline [1][4] - From the demand side, infrastructure and export are expected to remain robust in 2024, with consumption showing resilience after two years of recovery [1][3] - On the supply side, global chemical capital growth is projected to turn negative in 2024, while domestic construction projects are seeing a rapid decline in growth, nearing a bottom by Q2 2024 [1][3] Group 2 - The report outlines various industry indicators, including valuation metrics, price indices, supply-side metrics, import/export contributions, downstream industry performance, and global macroeconomic indicators [2] - Specific recommendations for investment opportunities include sectors such as refrigerants, phosphates, amino acids, and organic silicon, with suggested companies for each sector [4][5] - The report emphasizes the need for companies to adapt to changing global trade dynamics, focusing on both internal production capabilities and external market opportunities [5]

Investment Rating - The report maintains a neutral rating for the chemical industry [2]. Core Insights - The current cycle may be nearing its end, with expectations for demand recovery. Infrastructure and export remain robust, while the real estate cycle continues to decline. The chemical industry is expected to see a phase of price and profit level rebound in Q2 2024, but overall performance will remain under pressure throughout the year [4][5]. - The report emphasizes the importance of identifying industries with marginal supply-demand changes, focusing on both domestic and global market dynamics [6][7]. Summary by Relevant Sections Industry Valuation and Economic Indicators - The report tracks various indicators such as the chemical industry's comprehensive prosperity index and industrial added value [3]. - It highlights the importance of price indicators like PPI, PPIRM, and CCPI, along with supply-side metrics including capacity utilization and fixed asset investment [3]. Supply and Demand Dynamics - The report suggests that the domestic supply pressure remains significant, but the pace of capital expenditure is slowing down. Inventory levels are expected to enter a replenishment phase after a year of destocking [4]. - It identifies specific sectors to watch based on supply stability and demand logic, recommending companies such as Juhua Co., Sanmei Co., and Dongyue Group for refrigerants, and Yuntianhua and Chuanheng Co. for phosphate and fertilizers [7]. Global Market Trends - The report notes a shift in global investment and trade patterns due to rising protectionism and geopolitical tensions, leading to a reconfiguration of the global supply chain [7]. - It emphasizes the need for Chinese companies to adapt to these changes by focusing on both internal and external market opportunities [7]. Price Trends and Economic Performance - The report indicates that from January to August 2025, the CCPI has shown a decline of approximately 7.3% from the beginning of the year, with PPI also reflecting negative growth trends [15]. - It provides detailed insights into the price movements of various chemical products, indicating a complex landscape of price fluctuations and historical performance [20][22].

Investment Rating - The industry investment rating is maintained at "Neutral" [2] Core Viewpoints - The current cycle may be nearing its end, with expectations for demand recovery. Infrastructure and export demand are expected to remain robust in 2024, while the real estate cycle continues to decline. The consumer market has shown resilience after two years of recovery [4][5] - Supply-side pressures remain significant, with global chemical capital growth expected to turn negative in 2024. Domestic construction projects are seeing a rapid decline, but fixed asset investment continues to grow at over 15% [4] - The chemical industry is entering a replenishment phase after a year of destocking, with inventory growth turning positive by Q3 2024. However, the overall price and profit levels in the chemical industry are expected to face pressure throughout the year [4] Summary by Sections Industry Valuation and Economic Indicators - The report tracks various indicators including the chemical industry's comprehensive prosperity index and industrial added value [3] - Price indicators such as PPI, PPIRM, and CCPI are monitored, along with supply-side metrics like capacity utilization and fixed asset investment [3] Demand and Supply Dynamics - Demand stability is sought in industries led by supply logic, such as refrigerants and phosphates, with specific companies recommended for investment [7] - Conversely, industries with stable supply but driven by demand logic include MDI and explosives, with key companies highlighted [7] Global Market Trends - The report notes a shift in global investment and trade patterns due to rising protectionism and geopolitical tensions, emphasizing the need for regional cooperation and stability [7] - Investment opportunities are identified in both domestic and international markets, focusing on new production capabilities and breakthroughs in material science [7] Price Trends and Economic Performance - The chemical product price index (CCPI) has shown fluctuations, with a notable decline of approximately 6.9% from January to April 2025 [14] - The PPI for chemical raw materials and products has also experienced a downward trend, with June 2025 figures showing a year-on-year decrease of 6.1% [16]

Investment Rating - Industry rating is Neutral (maintained rating) [1] Core Viewpoints - The basic chemical industry saw a slight increase in revenue in 2024, with a year-on-year growth of 2.6%, reaching a total revenue of 22,285 billion yuan. However, profits faced pressure, with a net profit decrease of 5.7% to 1,211 billion yuan [4][13]. - In Q1 2025, the industry experienced a year-on-year revenue increase of 5.4%, totaling 5,345 billion yuan, while net profit rose by 10.6% to 374 billion yuan [6][10]. - The overall gross profit margin for the industry in 2024 was 12.8%, a decline of 0.7 percentage points year-on-year, while the net profit margin was 5.6%, down 0.5 percentage points [4][13]. Summary by Sections Revenue and Profit Trends - In 2024, the basic chemical industry achieved a total operating revenue of 22,285 billion yuan, with a slight year-on-year increase of 2.6%. Operating profit was 1,564 billion yuan, down 4.1% year-on-year, and net profit attributable to shareholders was 1,211 billion yuan, down 5.7% [4][13]. - For Q1 2025, the industry reported operating revenue of 5,345 billion yuan, a year-on-year increase of 5.4%, and a net profit of 374 billion yuan, reflecting a 10.6% increase [6][10]. Profitability Metrics - The industry’s overall gross profit margin was 12.8% in 2024, a decrease of 0.7 percentage points from the previous year. The net profit margin stood at 5.6%, down 0.5 percentage points year-on-year [4][13]. - In Q1 2025, the net profit margin improved to 7.2%, with a year-on-year increase of 0.3 percentage points and a quarter-on-quarter increase of 4.7 percentage points [6][10]. Investment Recommendations - The report suggests focusing on industries with stable demand and supply logic, such as refrigerants, phosphate fertilizers, and amino acids, while also considering sectors with stable supply and demand logic, including MDI and agricultural chemicals [8]. - It emphasizes the importance of identifying industries with marginal improvements in both supply and demand, such as organic silicon [8]. Construction and Fixed Assets - In Q1 2025, the growth rate of construction in progress fell into negative territory for the first time since 2018, indicating a shift in capital expenditure trends within the industry [7]. - The total fixed assets for the industry reached 13,979 billion yuan, reflecting an 11.9% year-on-year increase [7].