Investment Rating - The investment rating for the company is "Buy" (maintained) [1][6] Core Views - The company is positioned at the bottom of the market, awaiting recovery, with its leading advantages becoming more pronounced [1][5] - In the first half of 2025, the company achieved operating revenue of 6.505 billion yuan, a year-on-year decrease of 6.46%, while the net profit attributable to shareholders increased by 2.84% to 928 million yuan [3][4] - The dye industry remains competitive, with domestic overcapacity leading to relatively low sales prices [3][5] Financial Performance - In the first half of 2025, the average price of reactive dyes was 22.7 yuan/kg, up 2.4 yuan/kg year-on-year, while the price of disperse dyes decreased to 17.5 yuan/kg, down 0.3 yuan/kg year-on-year [3][4] - The company’s sales expenses decreased by 7.3% to 340 million yuan, while management expenses increased by 11.17% to 429 million yuan [4] - As of the end of the first half of 2025, the company's contract liabilities increased by 59.47% year-on-year to 11.593 billion yuan, mainly due to significant pre-sale amounts from its real estate subsidiary [4] Market Position and Strategy - The company is focusing on direct sales in the dye sector and maintaining its distribution business, which has led to a stable growth in market share, with sales volume slightly increasing to 115,400 tons [5] - In the intermediate products sector, the company has managed to maintain stable production and sales despite industry challenges, achieving sales of 49,500 tons [5] Earnings Forecast - The company’s revenue is projected to be 17.324 billion yuan in 2025, with net profit expected to reach 2.097 billion yuan, corresponding to a PE ratio of 16 [6][8] - For the years 2026 and 2027, revenue is expected to grow to 19.989 billion yuan and 20.846 billion yuan, with net profits of 2.445 billion yuan and 2.552 billion yuan respectively [6][8]

Core Viewpoint - Zhejiang Longsheng's net profit attributable to shareholders for H1 2025 increased by 2.84% year-on-year, primarily due to pressure on domestic dye prices, while sales growth in key products compensated for price declines, leading to profit enhancement [1] Group 1: Business Performance - The company's main business includes textile chemicals focused on dyes and auxiliaries, as well as intermediates primarily based on para-phenylenediamine and para-phenol [1] - Dye business: Sales reached 115,400 tons in H1, a year-on-year increase of 0.79%, with a focus on developing direct sales and maintaining distribution channels for stable sales growth [1] - Intermediate business: Sales were 49,500 tons in H1, a year-on-year decrease of 4.99% [1] Group 2: Future Outlook - The company aims to become a comprehensive service provider for specialty chemicals through a dual approach of independent research and strategic acquisitions [1] - Forecasted net profits attributable to shareholders for 2025, 2026, and 2027 are 2.07 billion, 2.21 billion, and 2.39 billion respectively, with current stock prices corresponding to P/E ratios of 17.0, 15.9, and 14.7 times [1] - The investment rating is maintained at "Buy" [1]

Investment Rating - The report maintains a "Buy" investment rating for the company [9] Core Views - The company achieved a revenue of 6.505 billion yuan in H1 2025, a year-on-year decrease of 6.46%, while the net profit attributable to shareholders was 928 million yuan, an increase of 2.84% year-on-year [4][5] - The growth in net profit is attributed to stable sales volume in the dye business, which compensated for price pressures [5] - The company has solidified its position as a leading provider of textile chemicals globally, with a focus on expanding its product offerings into specialty chemicals [7][8] Summary by Sections Market Performance - The company's stock price is currently at 10.82 yuan, with a market capitalization of 35.2 billion yuan [1] Financial Performance - In H1 2025, the company sold 115,400 tons of dyes, a year-on-year increase of 0.79%, while intermediate products saw a sales volume of 49,500 tons, a decrease of 4.99% [5] - The financial expense ratio decreased due to lower bank loan interest expenses and increased interest income from deposits [6] Strategic Positioning - The company has integrated advantages in technology, brand, channel, and capacity, becoming the world's largest producer of textile chemicals [7] - It is pursuing a vertical extension strategy to enhance its market position in specialty chemicals, focusing on key intermediates [8] Profit Forecast - The company is expected to achieve net profits of 2.07 billion yuan, 2.21 billion yuan, and 2.39 billion yuan for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 17.0, 15.9, and 14.7 [9][11]

Core Viewpoint - Zhejiang Longsheng plans to acquire 37.57% of DyStar Global Holdings for approximately $697 million to resolve an ongoing lawsuit and gain full ownership of the company, which is a leading global supplier of textile dyes and chemicals [1][5][6]. Group 1: Acquisition Details - The acquisition will increase Zhejiang Longsheng's stake in DyStar from 62.43% to 100% [5]. - The transaction is expected to resolve litigation issues with KIRI Company, the seller, and prevent DyStar from being sold as a whole [5][6]. - DyStar has a strong market position and is profitable, with a projected net profit of $103 million for 2024 [1][6]. Group 2: Financial Performance - In 2024, Zhejiang Longsheng reported a net profit of 2.03 billion yuan, a year-on-year increase of 32.36% [8]. - The company achieved a net profit of 396 million yuan in Q1 2024, representing a 100.44% increase year-on-year [7][8]. - Cumulatively, since its listing in 2003, Zhejiang Longsheng has achieved a total net profit of 39.2 billion yuan [2][11]. Group 3: Market Position and Industry Context - Zhejiang Longsheng is a leading player in the textile chemicals market, with a global market share and production capacity of 300,000 tons of dyes and 100,000 tons of auxiliaries annually [9]. - The Chinese dye industry accounts for over 70% of global production, making China the largest producer and consumer of dyes [8][9]. - Despite market pressures and declining profits in recent years, the company's competitive advantages have allowed it to maintain strong profitability [10][11].

Core Insights - Zhejiang Longsheng achieved operating revenue of 15.884 billion yuan, a year-on-year increase of 3.79%, and a net profit attributable to shareholders of 2.03 billion yuan, up 32.36% [1] - The company focuses on "steady progress and quality improvement" to enhance market expansion and internal management optimization, ensuring robust operational support for high-quality development [1] - The main business areas include textile chemical products, primarily dyes and additives, and intermediates such as meta-phenylenediamine and meta-phenol [1] Revenue Breakdown - The dye segment generated operating revenue of 7.591 billion yuan, a slight increase of 0.94%, with sales volume reaching 238,400 tons, up 7.17% [1] - The intermediates segment reported operating revenue of 3.282 billion yuan, a growth of 4.58%, with sales volume of 106,200 tons, increasing by 16.55% [2] - The additives business also showed stable growth, achieving operating revenue of 1.002 billion yuan, a rise of 7.63% [3] Strategic Initiatives - The company is extending its industrial chain vertically, moving from a single dye business to the specialty chemicals sector, focusing on key intermediate products to enhance upstream raw material control and supply chain stability [2] - By integrating the MAP-EF production system, the company aims to reduce costs and improve efficiency amid increasing market competition [2] - The integrated layout in the intermediates sector provides significant advantages, enhancing cost control and product quality stability [3] Future Outlook - The company aims to focus on the specialty chemicals field, planning to build a globally leading production service system [4] - Future strategies include promoting high-end, green, and intelligent manufacturing, alongside continuous technological innovation and product structure optimization [4]

Core Viewpoint - The Ministry of Commerce of China has decided to conduct a final review investigation on the anti-dumping measures applicable to imported m-dihydroxybenzene (also known as resorcinol) originating from Japan, effective from March 23, 2024, due to the potential continuation or recurrence of dumping and damage to the domestic industry if the measures are terminated [1]. Anti-Dumping Measures - The Ministry of Commerce will recommend to the State Council Tariff Commission to continue imposing anti-dumping duties on imported m-dihydroxybenzene from Japan for another five years starting from March 23, 2025, based on the investigation results [2]. - The scope of the products subject to the anti-dumping duties remains consistent with the previous announcements [2]. Product Information - The chemical formula for m-dihydroxybenzene is C6H6O2, and it typically appears as white needle-like crystals that can turn red when exposed to air. It is soluble in water, ethanol, and ether, but insoluble in benzene [4]. - M-dihydroxybenzene is a significant chemical intermediate and fine chemical raw material, primarily used in the production of rubber adhesives and UV absorbers, as well as in wood adhesives, flame retardants, and various pharmaceutical and pesticide intermediates [4]. Anti-Dumping Tax Rates - The anti-dumping tax rates for Japanese companies are as follows: - Sumitomo Chemical Company: 40.5% - Mitsui Chemicals, Inc.: 40.5% - Other Japanese companies: 40.5% [5]. Tax Collection Method - Starting from March 23, 2025, importers of m-dihydroxybenzene from Japan will be required to pay the corresponding anti-dumping tax based on the customs-determined taxable price of the imported goods [5]. Legal Recourse - Parties dissatisfied with the final review decision may apply for administrative reconsideration or file a lawsuit in accordance with the Anti-Dumping Regulations of the People's Republic of China [6]. Implementation Date - The announcement regarding the continuation of anti-dumping measures will take effect from March 23, 2025 [7].