Investment Rating - Industry Rating: Neutral (Maintained Rating) [4] Core Insights - The report emphasizes the progressive policies for the renovation and upgrading of old equipment in the chemical industry, which are expected to redefine cost factors in the sector [2][3] - The old equipment renovation policies are anticipated to optimize supply and stimulate demand, contributing to economic growth [3][2] - The report highlights the need for a systematic approach to manage aging equipment risks and establish a long-term mechanism for aging management in the chemical industry [22][25] Summary by Sections 1. Policy Developments - The Ministry of Industry and Information Technology and other departments have issued notifications to assess old equipment in the petrochemical and chemical industries, with specific guidelines and deadlines for evaluations [10][11][18] - A series of policies have been introduced since 2022 to address safety risks and promote the replacement of outdated equipment [20][21] 2. Old Equipment Capacity Statistics - The report provides statistics on the capacity of chemical sub-industries with equipment over 20 years old, indicating significant portions of production capacity are tied to aging facilities [25][26] - Specific data shows that certain products have a high percentage of production capacity linked to equipment installed before 2005, highlighting the urgency for upgrades [26][27] 3. Evaluation and Assessment - The evaluation process includes assessing the basic conditions of old equipment, safety risks, and compliance with national standards [11][12][18] - The report outlines the need for a comprehensive database of old equipment to facilitate better management and decision-making [19][25]

Investment Rating - The report does not explicitly state an investment rating for the chemical industry Core Insights - In June 2025, the basic chemical index increased by 6.42%, ranking 10th among primary industries, driven by rising oil prices affecting certain chemical product prices [2][11] - Among the 600 chemical products monitored, the top ten products with the highest price increases included butanone (16.36%) and ammonium sulfate (14.39%) [3][24] - The report highlights that 407 companies in the basic chemical sector achieved positive returns, while 130 companies reported negative returns in June 2025 [20] Market Overview - Major market indices in June 2025 showed the following changes: Shanghai Composite Index increased by 2.90%, Shenzhen Component Index by 4.23%, and the ChiNext Index by 8.02% [11] - The basic chemical sector's performance was notably strong, with sub-industry growth rates such as plastics and products at 7.79% and other chemical products II at 7.36% [16] Product Price Movements - The report identifies significant price movements in various chemical products, with the top gainers being butanone and ammonium sulfate, while the largest declines were seen in vitamin E (-27.66%) and vitamin D3 (-26.32%) [24][28] - The report provides detailed price data for key products, indicating a general upward trend in prices for many chemicals due to rising raw material costs [26][27] Industry Profitability - From January to May 2025, the total profit of the chemical raw materials and products manufacturing industry decreased by 4.7%, with a total profit of 151.58 billion yuan [4][32] - The report notes a decline in factory prices by 4.1% year-on-year, reflecting broader economic challenges faced by the industry [4][32] Company Performance - The report lists the top ten basic chemical companies by monthly performance, with notable increases in stock prices for companies like Keheng Co. (122.00%) and Xingye Co. (97.50%) [21][22] - Conversely, companies such as Shanghai Jahwa and Yongguan New Materials experienced significant declines, with monthly drops of -11.32% and -11.68% respectively [23]