Core Viewpoint - The chemical industry is transitioning from a focus on market share to profitability, indicating a potential new cycle as production expansion comes to an end and policies are implemented [1][7]. Industry Challenges - Since 2022, the chemical industry has faced price declines and increased competition, leading to many companies experiencing revenue growth without profit [2]. - Despite domestic demand stabilization from various policies, intensified competition and limited overseas demand have exacerbated price weakness and low capacity utilization, resulting in overall low profit levels [2][3]. Current Industry Position - The bottom position of the industry is considered relatively certain, with high concentration in most sub-industries limiting further optimization through concentration increases [3]. - The driving force of the chemical market is shifting from demand stimulation to supply-side reform, necessitating breakthroughs from the supply side to improve the supply-demand structure and promote high-quality development [3][6]. Self-Regulation and Policy Coordination - The current phase of the chemical industry's anti-involution process is at the initial stage of policy and industry assessment, with industry associations promoting self-regulation among companies [4]. - Historical experiences suggest that self-regulation effects are often short-lived, and temporary production cuts can lead to a rebound in operating rates, returning to a state of oversupply [4]. Specific Industry Insights - The polyester filament industry is entering a period of slow capacity growth, with profitability improvements driven by policies to eliminate about 10% of outdated capacity and joint production cuts by leading companies [5][6]. - The viscose staple fiber industry has seen no new capacity in the past five years, maintaining a stable supply-demand balance, with strict carbon emission policies curbing new capacity as a driving factor [5]. Future Industry Outlook - The chemical industry is expected to enter a new cycle as it shifts focus from market share to profit, with measures such as eliminating outdated capacity and enhancing industry self-regulation [7]. - The importance of pricing power is emphasized, as high concentration in many sub-industries means that if leading companies cease harmful competition, prices can stabilize and potentially gain global pricing power [7]. - Investment opportunities are anticipated in major sectors like petrochemicals and coal chemicals, with a focus on sub-industries nearing cyclical turning points, such as polyester filament [7][8].

● 刘英杰 谭丁豪 当下化工行业供需错配，价格走弱、盈利承压。不过，开源证券研究所副所长、化工首席分析师金益腾 日前在接受中国证券报记者专访时表示，随着扩产进入尾声、政策逐步落地，化工行业正从"要市占 率"转向"要利润"，有望开启周期新起点。 行业正面临多重挑战 金益腾表示，2022年以来，受供需错配影响，化工品价格持续走弱，竞争加剧导致企业盈利承压，不少 企业陷入"增收不增利"局面。 他表示，今年以来，尽管多项扩内需政策落地有望带动国内需求企稳修复，但供给端竞争进一步加剧、 海外需求提升空间有限，使得产品价格走弱、产能利用率走低问题愈发凸显，导致行业整体利润水平偏 低，多数企业迫切希望改善竞争格局以回归正常盈利水平，在反内卷浪潮下，新一轮供给侧改革势在必 行。 作为典型的周期性行业，化工行业的景气度波动有迹可循。2008年底至2015年，国际金融危机后的需求 刺激计划推动制造业景气度快速回升；2015年底至2020年中，供给侧结构性改革通过"三去一降一补"等 措施，显著提升了工业景气度；2020年底至2023年，我国率先从全球公共卫生事件冲击中恢复生产，叠 加出口需求旺盛、新能源产业高速发展及"双碳"目标推 ...

Group 1: Company Performance and Stock Issues - The company's stock price has significantly declined, currently far below its net asset value, raising concerns about its investment value and the lack of action from major shareholders regarding buybacks and increases [1][2][29]. - The company has conducted multiple buybacks and is considering further actions, but specific plans are still under research [1][2][29]. - The company reported a gross margin of only 3.86% in Q1 2025, despite stable product prices, indicating challenges in profitability [2][3]. Group 2: Industry Competition and Market Dynamics - The BOPET industry is experiencing intense competition, with some new entrants engaging in price wars despite a self-regulatory declaration aimed at reducing internal competition [2][3]. - The company is positioned as a leading player in the BOPET market, with a comprehensive product range, but is currently facing short-term fluctuations due to industry capacity releases [2][3][4]. - The market demand for BOPET products is expected to grow at over 10% annually, driven by domestic replacements of imports and expanding applications [4][10]. Group 3: Product Development and Future Outlook - The company aims to achieve a production capacity of 500 million square meters for MLCC release films within the year, with a projected market value based on product structure [4][10]. - There are ongoing efforts to develop new products, with 32 new product and technology development projects planned for the year [8][10]. - The company is exploring strategic collaborations with leading battery manufacturers to enhance its market position [6][10]. Group 4: Financial Health and Management Responses - The company's asset-liability ratio was reported at 32.12% at the end of Q1 2025, indicating a healthy financial status despite recent challenges [10]. - Management emphasizes the need for maintaining operational stability and innovation to navigate the current market environment [10]. - The company is committed to improving investor relations and enhancing communication with stakeholders to rebuild confidence [5][10].

Core Viewpoint - *ST Lvkang is facing significant uncertainty regarding its ability to continue operations due to insolvency, while simultaneously engaging in a series of capital actions such as equity transfers that appear to be self-rescue efforts. The question arises whether the company will pursue a backdoor listing or engage in "tri-party transactions" in its capital operations, with the former being potentially more uncertain given the urgency of maintaining its listing status [1] Group 1: Financial Performance and Business Transition - Lvkang Biotech, originally focused on veterinary drug raw materials and probiotics, has seen a decline in performance since its listing in 2017, with a net profit drop of 6.97%, 13.08%, 23.73%, and 24.15% from 2017 to 2020 [2] - In 2021, the company reported a revenue of 363 million yuan, a year-on-year increase of 17.93%, but incurred a net loss of 26.04 million yuan, a decline of 160.28% compared to the previous year [2] - The company entered the photovoltaic film sector in 2022 through acquisitions, leading to a significant stock price increase from around 10 yuan to a peak of 65.9 yuan, representing a more than fivefold increase [2] Group 2: Ongoing Losses and Financial Challenges - Lvkang Biotech has continued to incur losses, with net profits of -122 million yuan, -222 million yuan, and -445 million yuan projected for 2022, 2023, and 2024 respectively, indicating a worsening financial situation [3] - The photovoltaic film business has negatively impacted the company's financial statements due to low gross margins and high financial costs associated with increased bank loans and financing leases [3] - As of December 31, 2024, the company's current liabilities exceeded current assets by over 1 billion yuan, raising significant doubts about its ability to continue as a going concern [4] Group 3: Shareholder Changes and Market Reactions - On April 24, 2025, Lvkang Biotech announced a change in control, with major shareholders transferring shares to Zongteng Network at a price of 13.73 yuan per share, totaling approximately 639.93 million yuan [5] - This transfer will increase Zongteng Network's ownership to 29.99%, surpassing the previous controlling shareholder's stake [5] - The market is speculating whether Zongteng Network's involvement indicates a backdoor listing or a different capital strategy, especially as the company also announced plans to divest its photovoltaic assets [9] Group 4: Strategic Moves and Future Outlook - Lvkang Biotech's recent capital operations, including the divestiture of its photovoltaic film business, may be aimed at clearing obstacles for future transactions [9] - The company signed an asset transfer agreement on April 24, 2025, to sell all assets and liabilities related to its photovoltaic film business to a joint venture established by its shareholders [9] - The potential for a backdoor listing or tri-party transaction remains uncertain, with regulatory hurdles and the urgency of maintaining its listing status complicating the situation [9]

Group 1: Financial Performance and Projections - The company aims for revenue growth in 2025, with a focus on maintaining production and sales of high-margin products like the Ningbo Wanshang high-voltage capacitor film [2][3] - The net profit for 2024 and Q1 2025 has been positive, indicating a profitable period [3][4] - The company reported a 12.04% increase in R&D investment for 2024, amounting to 44.54 million yuan [8] Group 2: Market and Product Development - Ningbo Wanshang has achieved scale production of capacitor films, with a favorable market situation where some products are in short supply [9][10] - The company is actively developing new products, including a new energy metalized film and capacitor testing center, to enhance product quality and profitability [8][19] - The company is not currently developing PEEK materials but is focusing on core business areas and digital transformation [4][18] Group 3: Shareholder Concerns and Stock Performance - The company has not distributed dividends due to negative distributable profits, despite having unallocated profits on the books [20] - The stock price has remained low, influenced by various factors including macroeconomic conditions and market sentiment [3][11] - The company is considering market value management strategies but has not implemented a formal plan yet [9][18] Group 4: Corporate Governance and Strategic Decisions - The major shareholder's equity transfer process is ongoing, with updates to be provided as they become available [6][14] - The company is not currently considering divesting or restructuring its business segments, focusing instead on improving product quality and reducing production costs [4][8] - The company acknowledges the competitive pressure in the film market and is working to enhance its differentiation strategy [9][10]

Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 15.22 CNY based on its strong operational performance and growth potential [5]. Core Insights - The company has established a comprehensive integrated layout across the entire industrial chain, enhancing its operational performance and dividend potential. In 2023, the company's revenue reached 234.9 billion CNY, a year-on-year increase of 5.62% [1][2]. - The company’s refinery has a higher proportion of heavy oil feedstock (60%), yet it maintains a leading complexity and processing depth in the industry, thanks to advanced technologies such as ebullated bed hydrocracking [2][46]. - The profitability of the company's products is expected to improve continuously, particularly in the aromatics and polyester segments, driven by a decrease in supply growth and low inventory levels [2][3]. Summary by Sections 1. Integrated Refining and Chemical Platform - The company has developed a "one drop of oil to all things" business layout, expanding from its origins in textile manufacturing to a comprehensive petrochemical platform [10]. - The company’s revenue has shown steady growth, exceeding 234.9 billion CNY in 2023, with a significant contribution from refining products, which accounted for over 51% of total revenue [23][17]. - The company has a strong cash position, with 27.7 billion CNY in cash as of Q3 2024, and is expected to reduce capital expenditure intensity, enhancing its dividend potential [26][30]. 2. Refinery Efficiency and Cost Advantages - The company’s refinery demonstrates a higher conversion rate and cost advantages, with a significant portion of heavy oil feedstock processed efficiently [2][46]. - The application of ebullated bed hydrocracking technology has significantly enhanced the refinery's competitiveness, allowing for higher conversion rates of heavy oil into more valuable products [55][52]. - The integration of coal chemical projects provides additional cost advantages, supplying hydrogen and other chemicals to the refinery [58][65]. 3. Profitability Improvement and Domestic Substitution - The company is expanding into new materials, with a focus on high-performance resins and biodegradable materials, which are expected to enhance its product offerings and reduce reliance on bulk chemicals [67]. - The aromatics segment has a significant production capacity of 4.5 million tons per year, with potential for profitability recovery as downstream demand improves [68]. - The polyester segment is poised for profitability improvement due to a slowdown in supply growth and low inventory levels, which is expected to drive demand [81][76].