Core Viewpoint - The leading electrolyte manufacturer, Shida Shenghua, is facing significant operational challenges due to a slowdown in global new energy demand and intensified competition in upstream materials, resulting in a substantial decline in profitability despite revenue growth [1][3]. Financial Performance - In the first half of 2025, Shida Shenghua reported a revenue of 3.011 billion yuan, a year-on-year increase of 14.87%, but the net profit attributable to shareholders turned into a loss of 56.34 million yuan from a profit of 38.06 million yuan in the same period last year [1][3]. - The increase in operating costs, which rose by 16.99%, outpaced revenue growth, compressing profit margins [3]. Market Conditions - The domestic electrolyte solvent market continues to experience supply-demand imbalances, leading to persistently low prices for carbonate products, which severely impacted the company's profitability [3][4]. - The market downturn is characterized by price pressures on key products such as MTBE, further exacerbating the company's financial challenges [3]. Subsidiary Performance - Several subsidiaries of Shida Shenghua are reporting losses, contributing significantly to the overall decline in performance. For instance, the Wuhan subsidiary reported a net loss of 52.11 million yuan despite generating 380 million yuan in revenue [4]. - The total net losses from the four mentioned subsidiaries exceeded 118 million yuan in the first half of 2025, highlighting the burden of new capacity investments during a market downturn [5]. Financial Health - As of June 30, 2025, Shida Shenghua's accounts receivable stood at 1.608 billion yuan, a year-on-year increase of 15.79%, indicating potential cash flow pressures and increased risk of bad debts [6]. - The company reported a positive net cash flow from operating activities of 90.14 million yuan, a significant improvement from a negative 590 million yuan in the previous year, primarily due to the collection of past receivables [6]. - Total assets increased from 9.649 billion yuan at the beginning of the year to 10.166 billion yuan by mid-year, reflecting a 5.36% growth, mainly driven by increases in cash and receivables [6]. Research and Development - Despite facing financial pressures, Shida Shenghua maintained a strong commitment to research and development, with R&D expenses reaching 125 million yuan, a year-on-year increase of 21.85% [7].

Report Industry Investment Rating - Not provided Core View - The domestic LPG market is expected to continue a narrow - range oscillating trend. International LPG prices are weak, with a significant increase in warehouse receipts suppressing the market. Although domestic chemical demand is increasing, weak combustion demand restricts upward movement [1]. Summary by Relevant Content Price and Market Data - On Monday, the cheapest deliverable was East China civil LPG at 4413 yuan/ton. FEI and CP prices dropped, PP prices declined sharply, and the production profit of FEI and CP for PP worsened, with CP having a lower production cost than FEI. The PG market weakened, with the 08 - 09 spread at - 7 and the 08 - 10 spread at - 411. The US - to - Far East arbitrage window closed [1]. - The PG market oscillated. The basis weakened to 370 (-63), and the inter - month reverse spread continued to strengthen. Warehouse receipt registrations reached 9804 lots (+1000), with Qingdao Yunda adding 1000 lots. External market prices continued to weaken, and the oil - gas ratio declined [1]. Regional and Spread Data - In terms of regional spreads, PG - CP reached 43 (+18), FEI - MB was 155 (-6), FEI - CP was 4.5 (+4.5), and the US - Asia arbitrage window closed. FEI propane discount continued to fall, and the CP arrival discount oscillated. FEI - MOPJ changed little, at - 47.5 (-3.75) [1]. Profit and Demand Data - PDH profit improved, while MTBE export profit declined. The arrival volume decreased significantly. Chemical demand was strong; PDH operating rate increased significantly to 73.13% (+2.01 pct), and next week, Liaoning Jinfa plans to resume operation. Alkylation operating rate increased, and Henan Chengxin's alkylation unit has a restart plan. MTBE operating load increased, with manufacturers focusing on exports and overall stable operation. Combustion demand was weak [1].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Report's Core View - PG futures prices have been oscillating downward. Although the chemical demand outlook is relatively strong, the decline in oil prices and the weakening of international LPG prices have led to a weaker futures market. The cheapest deliverable is East China civil LPG at 4486. The basis has strengthened to 433 (+93). The inter - month reverse arbitrage has strengthened due to weak spot prices and the shift of the main contract. The number of registered warrants is 8804 lots (+500), with 500 lots added by Qingdao Yunda. The external market prices have continued to weaken, and the oil - gas ratio has increased. [1] - Despite the strong chemical demand expectations, under the suppression of weak combustion demand, the domestic LPG market is expected to continue the narrow - range oscillating trend. [1] Group 3: Summary by Related Catalogs Daily Data Summary - On July 18, 2025, the prices of South China LPG, East China LPG, and Shandong LPG were 4530, 4486, and 4610 respectively. The propane CFR South China was 553, propane CIF Japan was 505, MB propane spot was 71, and CP forecast contract price was 538. The price of Shandong ether - after carbon four was 4890, and Shandong alkylated oil was 8000. The daily changes were - 40, 0, 20, - 2, - 2, 1, - 8, 40, 80 respectively. The PG futures price decreased, the monthly spread declined, and the 08 - 09 spread was 63. The US - Far East arbitrage window opened. [1] Weekly View Summary - **Market Trend**: The PG futures market oscillated downward. The domestic LPG market is expected to continue the narrow - range oscillation due to weak combustion demand, despite strong chemical demand expectations. [1] - **Basis and Spread**: The basis strengthened to 433 (+93), and the inter - month reverse arbitrage strengthened. The number of registered warrants increased to 8804 lots (+500). [1] - **External Market**: The external market prices continued to weaken, and the oil - gas ratio increased. The regional spreads such as PG - CP, FEI - MB, FEI - CP, and FEI - MOPJ changed, and the US - Asia arbitrage window opened. [1] - **Profit Situation**: The PDH profit improved, while the MTBE export profit declined. [1] - **Inventory and Supply**: Port inventories increased significantly, and factory inventories increased slightly. The commodity volume decreased by 0.98% due to reduced supply in South China, increased self - use in Shandong, and limited supply in East China. [1] - **Chemical Demand**: Chemical demand is strong. The PDH operating rate increased significantly to 71.78% (+10.91pct), and the alkylation operating rate increased. MTBE export orders increased. [1]

Report Summary 1) Report Industry Investment Rating - Not provided 2) Core Viewpoints - The cheapest deliverable is Shandong civil gas at 4580. PP prices fluctuate, FEI and CP prices decline, CP discount remains unchanged, PDH production profit improves, and FEI production cost is higher than CP. The PG futures market weakens, the monthly spread changes little, and the 08 - 09 spread is 95. The US - Far East arbitrage window closes [1]. - Civil gas prices rise first and then fall. Geopolitical tensions at the beginning of the week lead to a bullish market, but overall supply is abundant, high prices are resisted by downstream, and the easing of the Middle - East situation causes a sharp drop in oil prices, pressuring the market later in the week. The PG futures market falls sharply, the basis strengthens to 345, and the monthly spread changes little. External market prices weaken significantly, and the oil - gas ratio first suppresses and then rises. The internal - external price difference drops significantly, PG - CP weakens to - 4 (-33), FEI - CP weakens significantly, and the US - Asia arbitrage window closes. Import prices drop significantly, AFEI propane discount drops slightly, and CP propane - butane discount drops significantly. PDH spot production profit improves, paper - based production profit rises, FEI is lower than CP; alkylation oil profit rises significantly; MTBE gas - fractionation etherification profit is basically flat, isomerization etherification profit increases; FEI - MOPJ moves up [1]. - Fundamentally, increased arrivals lead to port inventory accumulation; factory inventory accumulates slightly with regional differentiation, East China destocks, and South China and Shandong accumulate inventory; external sales increase; PDH operating rate rises to 70.54% (+4.33 pct), alkylation operating rate is 46.02% (-1.84 pct), and MTBE production remains basically flat. The number of registered warrants is 8358 lots (+0). Next week, PDH and alkylation operating rates are expected to rise slightly, combustion demand remains weak, low prices stimulate sales, and subsequent prices will generally stabilize [1]. 3) Summaries by Related Catalogs Price Data - From June 24 - 30, 2025, prices of South China LPG, Shandong LPG, Shandong ether - post C4, and other related products change. For example, South China LPG prices range from 4710 - 4755, Shandong LPG prices range from 4599 - 4667 [1]. Market Conditions - Futures market: The PG futures market weakens, and the monthly spread changes little [1]. - External market: FEI and CP prices decline, and the US - Far East and US - Asia arbitrage windows close [1]. - Spot market: Civil gas prices show a trend of rising first and then falling [1]. Profit and Cost - PDH production profit improves, and FEI production cost is higher than CP. PDH spot production profit improves, and paper - based production profit rises [1]. Inventory and Production - Port inventory accumulates due to increased arrivals, factory inventory accumulates slightly with regional differentiation. PDH operating rate rises to 70.54% (+4.33 pct), and alkylation operating rate is 46.02% (-1.84 pct) [1].

Group 1: Report Industry Investment Rating - No industry investment rating is provided in the report. Group 2: Core Viewpoints - The supply increase is expected, while the expected increase in chemical demand provides some support. Shandong is expected to be boosted, and East and South China markets are more likely to fluctuate. Geopolitical tensions have significantly escalated, with the US attacking three Iranian nuclear facilities, which is expected to have a significant impact on market sentiment, so cautious operation is recommended [1]. Group 3: Summary by Relevant Data Price and Margin Data - From June 20 - 26, 2025, the prices of South China LPG, Shandong LPG, and other products fluctuated. For example, South China LPG prices ranged from 4660 to 4755. There were also changes in propane CFR prices, MB propane prices, etc. PDH production profit improved, with FEI production cost higher than CP. The daily change on June 26 showed 0 for South China LPG, -25 for Shandong LPG, etc. [1] Market Structure Data - The cheapest deliverable is East China civil gas at 4642. The PG futures price increased, with the 07 - 09 spread dropping 3 to 107. The US - Far East arbitrage window is closed. The 07 contract basis weakened to 80 (-141), and the monthly spreads (07 - 08, 07 - 09) changed significantly [1]. International Market Data - Outer - market prices continued to strengthen, and the oil - gas ratio increased. Regional spreads showed different trends: internal - external spreads strengthened, FEI - MB strengthened slightly, while FEI - CP and MB - CP weakened. The AFEI propane FOB discount weakened slightly to 2.25, and the CP CIF discount dropped significantly to 12 dollars. Freight rates increased slightly [1]. Downstream Profit Data - PDH spot profit improved due to rising拉丝 prices. FEI's profit from producing PP decreased, while CP's production profit increased. Alkylation and MTBE profits decreased, and the FEI - MOPJ spread shifted downward [1]. Fundamental Data - Due to delayed arrivals and a slight increase in chemical demand, port inventories and storage ratios decreased, while factory inventories remained basically flat, and external releases were also basically unchanged. Chemical demand was supported, with PDH and MTBE operating rates increasing and alkylation remaining basically flat. Multiple PDH plants are expected to increase their loads in the future [1]. Warehouse Receipt Data - The number of registered warehouse receipts was 8358 lots (-647), mainly due to Jinneng Chemical reducing by 270 and Shanghai Yuchi reducing by 377 [1].

Report Summary 1. Industry Investment Rating - No industry investment rating is provided in the report. 2. Core View - In the context of expected supply increase, the anticipated rise in chemical demand provides some support. It is expected that Shandong will see an improvement, while East and South China markets will be more volatile. Geopolitical tensions have significantly escalated, with the US attacking three Iranian nuclear facilities, which is expected to have a major impact on market sentiment, so cautious operation is recommended [1]. 3. Summary by Related Content 3.1 Price and Margin Changes - From June 1 to June 23, prices of products such as propane CFR South China, propane CIF Japan, and MB propane fluctuated. For example, the price of South China LPG decreased from 4690 on June 1 to 4660 on June 20, then rose to 4695 on June 23. The price of SD alkylated oil increased from 7800 on June 1 to 8300 on June 23 [1]. - The cheapest deliverable is East China civil gas, with a price of 4623. PP prices rose, PDH production margins improved, and FEI production costs were higher than CP. The PG futures price declined, and the spread between the July and September contracts increased by 2 to 99 [1]. 3.2 Market and Spread Analysis - The US to Far - East arbitrage window is closed. The PG futures price strengthened unilaterally, mainly due to geopolitical shocks. The basis of the July contract weakened to 80 (-141), and the spreads between different contracts changed significantly, with the July - August spread at 10 and the July - September spread at 195 [1]. - Outer - market prices continued to strengthen, and the oil - gas ratio increased. Regional spreads showed different trends: the internal - external spread strengthened, FEI - MB strengthened slightly, while FEI - CP and MB - CP weakened. The AFEI propane FOB discount weakened slightly to 2.25, and the CP CIF discount dropped significantly to 12 dollars. Freight rates increased slightly [1]. 3.3 Downstream Profit and Demand - Downstream profit situations varied. PDH spot margins improved due to rising wire drawing prices, FEI production margins for PP decreased, CP production margins increased, alkylation and MTBE margins decreased, and the FEI - MOPJ spread shifted downward [1]. - In terms of fundamentals, port arrivals were delayed, chemical demand increased slightly, port inventories and storage ratios decreased, factory inventories remained basically flat, and external sales were basically unchanged. Chemical demand was supported, with increased PDH and MTBE operating rates and stable alkylation operating rates. Multiple PDH plants are expected to increase their loads in the future, driving up the PDH operating rate [1]. 3.4 Warehouse Receipts - The number of registered warehouse receipts was 8358 lots (-647), mainly due to a decrease of 270 in Jinneng Chemical and a decrease of 377 in Shanghai Yuchi [1].

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The fundamentals of the LPG market are expected to be weak overall, with expected supply growth, increased chemical demand, and weak combustion demand [1] 3. Summary According to Relevant Catalogs 3.1 Price Changes - On Wednesday, for civil gas, prices in Shandong increased by 20 to 4490, in East China decreased by 9 to 4517, and in South China decreased by 20 to 4800; ether - post carbon four remained stable at 4740; the cheapest deliverable was Shandong civil gas at 4490 [1] - The CP import cost increased, PP remained flat, and PP production profit decreased. The PG futures market was strong, the basis of the 06 contract slightly strengthened to 413, the 06 - 07 monthly spread increased by 27 to 95, and the 07 - 09 monthly spread increased by 16 to 159 [1] - The price of civil gas decreased significantly, ether - post carbon four rebounded, and the cheapest deliverable was Shandong civil gas at 4480. The PG futures market declined due to weak spot prices. The basis of the 06 contract was 385 (+139), the 06 - 07 monthly spread was 54 (-27), and the 07 - 08 monthly spread was 61 (-15) [1] - In the external market, FEI and MB decreased, CP increased, and the oil - gas ratio fluctuated; the internal - external price difference decreased significantly, and FEI - MOPJ decreased slightly; the freight rates from the US Gulf to Japan and from the Middle East to the Far East decreased [1] 3.2 Supply and Demand - Supply: The arrival of goods decreased significantly, exports were sluggish, and overall port inventories decreased; factory inventories were basically flat. The commodity volume increased slightly and is expected to continue to increase, and the expected arrival of goods is also expected to increase [1] - Demand: The PDH operating rate rebounded to 61.15% (+3.17pct), production margins declined, and the PDH operating rate is expected to continue to rise next week; the alkylation operating rate and commodity volume remained flat, profitability declined significantly to - 40.5 (-308), and the operating rate is expected to increase slightly next week; the MTBE price generally decreased by 50 - 150 yuan/ton, MTBE production was basically flat, the profits of gas - fractionation etherification and isomerization etherification declined. The expected MTBE supply will fluctuate slightly, and gasoline demand is difficult to increase, so the price may not fluctuate much. With rising temperatures, combustion demand is expected to decline [1]