Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - During the pre - Spring Festival off - season, downstream开工率continues to decline, with some factories shutting down for holidays. Pre - holiday demand support is limited. Supply - side weekly production remains high, increasing pressure and leading to inventory accumulation. After the Spring Festival, it is necessary to note that the planned maintenance volume in February and March is limited, and supply is expected to remain under high pressure. Attention should be paid to the intensity of continuous inventory transfer downward. It is expected that the PE main contract will fluctuate weakly within a range, with attention to the 6700 support level. The PP main contract will fluctuate weakly, with attention to the 6600 support level. The strategy is mainly to sell on rallies [8] Summary According to Relevant Catalogs 1. Plastic 1.1 Market Changes - On February 6th, the closing price of the plastic main contract was 6812 yuan/ton, a week - on - week decrease of 2.88%. The average price of LDPE was 8800 yuan/ton, a decrease of 2.94% compared to the previous period. The average price of HDPE was 7375 yuan/ton, a decrease of 1.01%. The average price of LLDPE (7042) in South China was 7018.89 yuan/ton, a decrease of 2.02%. The South China basis of LLDPE closed at 206.89 yuan/ton, a decrease of 27.63%. The May - September spread was - 52 yuan/ton [11] 1.2 Key Data Tracking 1.2.1 Month - to - Month Spread - On February 6th, 2026: the 1 - 5 month spread was 54 yuan/ton with a change of - 27 yuan/ton compared to January 30th; the 5 - 9 month spread was - 52 yuan/ton with a change of +3 yuan/ton; the 9 - 1 month spread was - 2 yuan/ton with a change of +24 yuan/ton [18] 1.2.2 Spot Price - The prices of various plastic products in different regions showed different degrees of change. For example, in Northeast China, the price of HDPE film decreased by 100 yuan/ton, and in North China, the price of LDPE film decreased by 75 yuan/ton [19] 1.2.3 Cost - Last week, WTI crude oil closed at 63.50 US dollars/barrel, a decrease of 2.24 US dollars/barrel compared to the previous week. Brent crude oil closed at 68.05 US dollars/barrel, a decrease of 1.78 US dollars/barrel. The quotation of anthracite at the Yangtze River Port was 1070 yuan/ton (no change) [22] 1.2.4 Profit - The profit of oil - based PE was - 695 yuan/ton, a decrease of 133 yuan/ton compared to the previous week. The profit of coal - based PE was 314 yuan/ton, a decrease of 50 yuan/ton [27] 1.2.5 Supply - This week, the operating rate of polyethylene production in China was 85.91%, an increase of 0.56 percentage points compared to the previous week. The weekly polyethylene production was 71.24 tons, a decrease of 1.72%. The maintenance loss this week was 7.86 tons, a decrease of 0.65 tons compared to the previous week [32] 1.2.6 2026 Production Capacity Expansion Plan - Multiple companies have production capacity expansion plans in 2026, with a total planned production capacity of 550 tons [35] 1.2.7 Maintenance Statistics - Many enterprises, such as Yanshan Petrochemical and Zhongyuan Petrochemical, have some production lines under maintenance, and some of the restart times are uncertain [36] 1.2.8 Demand - This week, the overall operating rate of domestic agricultural film was 30.18%, a decrease of 4.38% compared to the previous week. The operating rate of PE packaging film was 38.82%, a decrease of 3.25%. The operating rate of PE pipes was 23.67%, a decrease of 4.16% [38] 1.2.9 Downstream Production Ratio - Currently, the production ratio of linear film is the highest, accounting for 36.6%, which differs from the annual average by 2.9%. The data of low - pressure film differs significantly from the annual average, currently accounting for 11.5%, which differs from the annual average by 3.7% [42] 1.2.10 Inventory - This week, the social inventory of plastic enterprises was 48.50 tons, an increase of 0.54 tons compared to the previous week, a month - on - month increase of 1.13% [44] 1.2.11 Warehouse Receipt - The number of polyethylene warehouse receipts was 9428 lots, an increase of 49 lots compared to the previous week [47] 2. PP 2.1 Market Changes - On February 6th, the closing price of the polypropylene main contract was 6691 yuan/ton, a decrease of 133 yuan/ton compared to the previous weekend, a week - on - week decrease of 1.95% [51] 2.2 Key Data Tracking 2.2.1 Downstream Spot Price - The prices of various PP products and related products showed different degrees of change. For example, the price of PP granule T30S decreased by 7 yuan compared to the previous day [55] 2.2.2 Basis - On February 6th, the spot price of polypropylene reported by Shengyi.com was 6640 yuan/ton (+2.13%). The PP basis closed at - 51 yuan/ton (with a change of 53 yuan/ton), and the May - September spread was - 32 yuan/ton (with a change of 1 yuan/ton) [57] 2.2.3 Month - to - Month Spread - On February 6th, 2026: the 1 - 5 month spread was - 5 yuan/ton with a change of +18 yuan/ton compared to January 30th; the 5 - 9 month spread was - 32 yuan/ton with a change of +1 yuan/ton; the 9 - 1 month spread was 37 yuan/ton with a change of - 19 yuan/ton [63] 2.2.4 Cost - Last week, WTI crude oil closed at 63.50 US dollars/barrel, a decrease of 2.24 US dollars/barrel compared to the previous week. Brent crude oil closed at 68.05 US dollars/barrel, a decrease of 1.78 US dollars/barrel. The quotation of anthracite at the Yangtze River Port was 1070 yuan/ton (no change) [66] 2.2.5 Profit - The profit of oil - based PP was - 626.13 yuan/ton, a decrease of 78.01 yuan/ton compared to the previous week. The profit of coal - based PP was - 161.35 yuan/ton, a decrease of 79.61 yuan/ton [71] 2.2.6 Supply - This week, the operating rate of Chinese PP petrochemical enterprises was 73.92%, a decrease of 0.66 percentage points compared to the previous week. The weekly production of PP pellets reached 76.32 tons, a week - on - week decrease of 0.89%. The weekly production of PP powder reached 5.66 tons, a week - on - week decrease of 1.92% [75] 2.2.7 Maintenance Statistics - Many enterprises, such as Qilu Petrochemical and Luoyang Petrochemical, have production lines under maintenance, and some of the restart times are uncertain [79] 2.2.8 Demand - This week, the average operating rate of PP downstream was 49.84% (- 2.24%). The operating rate of plastic weaving was 36.74% (- 5.30%), the operating rate of BOPP was 64.55% (+0.38%), the operating rate of injection molding was 53.02% (- 4.60%), and the operating rate of pipes was 33.70% (- 3.17%) [81] 2.2.9 Import and Export Profit - This week, the polypropylene import profit was - 351.35 US dollars/ton, a decrease of 18.62 US dollars/ton compared to the previous week. The export profit was - 46.57 US dollars/ton, an increase of 2.63 US dollars/ton compared to the previous week [87] 2.2.10 Inventory - This week, the domestic polypropylene inventory was 41.58 tons (+3.72%); the inventory of the two major state - owned oil companies increased by 14.92% compared to the previous week; the inventory of traders decreased by 0.11% compared to the previous week; the port inventory decreased by 0.47% compared to the previous week [89] 2.2.11 Inventory of Downstream Products - This week, the finished product inventory of large - scale plastic weaving enterprises was 839.78 tons, a decrease of 7.94% compared to the previous week. The raw material inventory of BOPP was 15.04 days, an increase of 7.66% compared to the previous week [93] 2.2.12 Warehouse Receipt - The number of polypropylene warehouse receipts was 17204 lots, a decrease of 32 lots compared to the previous week [97]

Industry Overview - The pipeline industry is experiencing intense competition with a significant structural differentiation pattern, where the overall market size is large but growth is slowing down, shifting the competitive focus from scale and price to technology, brand, and comprehensive services [1] - The market structure resembles a "pyramid," with a few national leading enterprises at the top, regional brands in the middle, and numerous small manufacturers at the base, which are heavily engaged in price competition due to product homogeneity [1] - The industry is witnessing a diversification in competition dimensions, with a shift from traditional PVC and PE pipes to high-performance plastic composite pipes and stainless steel pipes, emphasizing higher requirements for corrosion resistance, antibacterial properties, and energy efficiency [1] Market Dynamics - The industry concentration is continuously increasing under the backdrop of environmental upgrades and stricter quality regulations, indicating a "stronger gets stronger" trend [1] - Companies face challenges such as fluctuations in real estate demand and raw material prices [1] Competitive Landscape - Future competitiveness will favor system solution providers for old pipeline renovations, urban renewal, rural water management, and green buildings [2] - A promotional event for pipeline procurement evaluation is being held to enhance brand value and market share for reputable suppliers [2] Top Companies - **Hubei Dayang Plastic Co., Ltd.**: A national high-tech enterprise focusing on polymer plastic pipeline systems, with a product range that includes municipal water supply, gas pipelines, and agricultural irrigation [6] - **Gongyuan Co., Ltd.**: A leading supplier of high-quality plastic pipeline systems, known for its comprehensive product range and strong brand influence [7] - **Hubei Kaike Plastic Industry Co., Ltd.**: Specializes in plastic pipeline systems with a focus on quality and technology, establishing a strong regional reputation [8] - **Fujian Jiyou Plastic Co., Ltd.**: Focuses on plastic pipeline systems with a commitment to quality and customer service, maintaining a stable market position in its region [9] - **Shandong Dongxin Plastic Co., Ltd.**: A high-tech enterprise with a diverse product range, emphasizing technology and innovation in its operations [10] - **Suntop Pipe Technology Co., Ltd.**: Engages in the development and manufacturing of new plastic pipeline systems, with a strong focus on quality and environmental standards [11][12] - **Guangdong Liansu Technology Industrial Co., Ltd.**: A large building materials group with a comprehensive product range, serving major infrastructure projects [13] - **Aikan Enterprise Group (Zhejiang) Co., Ltd.**: A high-tech enterprise specializing in new plastic pipeline systems, known for its quality management and regional service capabilities [14] - **Zhejiang Zhongcai Pipeline Technology Co., Ltd.**: A leading supplier of plastic pipeline systems with a strong emphasis on quality assurance and brand reputation [15] - **Gudi Technology Co., Ltd.**: A well-known company in the plastic pipeline industry, maintaining a significant market position through quality and service [16]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - This week's view on PE is that the decline in price has not significantly compressed the valuation, monomers have rebounded slightly, and there are expectations of increased supply and decreased demand. The overall supply of PE is loose, with a 16% growth in total effective production capacity and an 18% increase in domestic production. Although imports have declined year - on - year, the ample supply is suppressing prices. The total PE operating rate is 84.5% (+1.8%). [6] - On the demand side, the operating rate of the agricultural film industry has started to decline, and orders are mostly coming to an end. The packaging film market has limited support from the e - commerce festival, and the operating rates of PE packaging film, PE pipes, and PE hollow products have all decreased. [7] - The cost - end support for PE is average. The downstream agricultural film and packaging film industries have strong rigid demand support, but considering the decline in the agricultural film operating rate and the increasing supply pressure at the end of the year, the market supply - demand pattern is not optimistic. Q4 may gradually enter a pattern of increasing supply and decreasing demand, putting pressure on prices. [8] - Valuation shows that production profits are generally compressed, and the valuation compression in the monomer segment is the most obvious. The profit margins of MTO and ethylene - purchasing processes have slightly declined. In terms of trading strategies, it is recommended to take a short position on rebounds for single - sided trading, with the 01 contract having an upper pressure level of 6900 and 7000 and a lower support level of 6750. Cross - period and cross - variety trading are not recommended for now. [8] 3. Summary by Relevant Catalogs 3.1 Polyethylene Spread and Profit - **Price and Spread**: The futures price has declined, the basis in East and South China is relatively strong, and the basis in North China has gradually recovered. The monthly spread is oscillating at a low level. The Chinese CIF price has dropped by $5 - 10. The US market has stopped falling and stabilized, with low - pressure injection molding being weak; the European LD market has recovered, and the high - pressure price in Southeast Asia is relatively high. [18][25] - **Basis/Monthly Spread**: The basis has been significantly repaired, and the North China market has returned to a slight premium. However, after the futures price rebounded, the basis could not keep up, and the monthly spread weakened again at a low level. [8] - **Import Profit**: The import window is open, the non - standard import profit is at a neutral level year - on - year, and the LD import profit is at a relatively high level this year. Overseas markets are still expected to destock at the end of the year, and imports may remain at a certain scale. [32] - **Non - standard Spread**: The production of HD film is relatively low, the supply is tight, and the non - standard spread is high. In November, it attracted some petrochemical companies to switch production, and supply pressure may be realized in the middle and late months. LD has also started to weaken month - on - month recently. [35] - **Upstream Prices**: Crude oil is oscillating at a low level, naphtha is moving sideways, ethylene has rebounded after a decline, and coal prices are relatively strong. [40] - **PE Production Profit**: Overall profits are compressed, and the valuation compression in the monomer segment is the most obvious. The profit margins of MTO and ethylene - purchasing processes have slightly declined. [46] 3.2 Polyethylene Supply and Demand - **New Production Capacity**: From the end of 2024 to the first half of 2025, standard products were intensively put into production, with a nominal production capacity growth rate of 19.2% and an effective production capacity growth rate of 16.7%. Before the 2605 contract, there will be limited new capacity put into production. Attention should be paid to the commissioning progress of Huajin and Zhongsha Gulei refineries. [50] - **Existing Operating Rate**: From the end of 2024 to the first half of 2025, the production capacity base increased, and the total supply increment was obvious. The operating rate is at a neutral level, and the maintenance volume is currently the same as last year. [51] - **Standard Product Supply**: The production capacity of LLD has been intensively put into operation, and the production ratio is at a neutral level. The maintenance in December is expected to be lower than that in November, and supply is expected to increase. [54] - **Maintenance Plan**: The scale of subsequent maintenance is expected to decline, and the monthly maintenance volume in Q4 is currently lower than the same period last year. [56] - **Imports and Exports**: Domestic production has increased significantly, and imports are at a low level year - on - year. In October, some shipments were delayed due to poor transportation turnover, and Iranian imports may increase in November. From December to January next year, overseas petrochemical maintenance will decrease, and supply will increase. The US inventory clearance pressure has been partially relieved, and imports will remain at a relatively high level. Standard product imports are at a low level, and LD imports are the same as last year. Imports from the US and Southeast Asia have decreased year - on - year. In October, imports from Saudi Arabia and the UAE in the Middle East increased slightly. [59][62][65] - **Inventory**: Supply is gradually increasing, upstream companies are actively destocking, and some downstream companies have placed orders at low prices. The inventory of standard and non - standard products at factories continues to decline, and upstream companies are actively selling at reduced prices. The middle and downstream are mainly digesting their previous inventories. [67][70] - **Downstream Demand**: The operating rate of the agricultural film industry has maintained a high level but has weakened this week. The operating rate of the packaging industry is the same as last year, and the enthusiasm for raw material stocking is limited in the downward market. The industry profit is at a high level, but orders are slightly lower year - on - year. The demand for PE pipes has slightly improved in Q4, and the raw material inventory is slightly lower year - on - year. Overall, downstream demand shows signs of marginal decline. [72][79][86][89]

Report Summary 1. Industry Investment Rating No information provided in the given content. 2. Core Viewpoint The price of polyethylene has an upward expectation due to the support from the demand - side, especially with the arrival of consumption seasons. However, the supply - side pressure from the continuous release of new production capacity is hard to relieve, so the price rebound height is expected to be limited. Technically, the plastic main contract faces obvious pressure at the gap on the K - line chart, and it's difficult for the price to break through the levels of 7450 and 7650 [11]. 3. Summary by Directory 3.1 New Production Capacity and Output Growth - From Q4 2024 to H1 2025, the new ethylene cracking device investment is highly concentrated, increasing the domestic supply pressure, especially in low - pressure and linear polyethylene, intensifying homogeneous competition. As of now, 343 million tons of new polyethylene devices have been put into production in 2025 [1]. - In the first eight months of 2025, China's polyethylene maintenance loss was 323.41 million tons, a year - on - year increase of 2.03%. The output was 2068.56 million tons, a year - on - year increase of 15%. The industry's operating rate has been around 75% since Q2. More devices are planned to be put into production later, mainly high - pressure and low - pressure, with limited linear production pressure, and most are scheduled for the end of the year [4]. - Multiple companies have new polyethylene device investment plans in 2025, with a total planned capacity of 663 million tons. The pressure on the general - purpose material market mainly comes from the first half of the year, and the output release in H1 still affects H2 [2]. 3.2 Demand in Traditional Peak Season - The operating rate of the plastic downstream industry has been lower year - on - year, and demand support has been insufficient. During the "Golden September and Silver October" peak season, the demand of most downstream products industries has increased, but it is still weaker than expected [7]. - In the agricultural film industry, demand is increasing, and the industry is in the peak production season. The operating rate will gradually reach the annual high, with a 20 - point increase space, and the demand will peak in early November. However, downstream factories mainly make rigid purchases [9]. - In the PE packaging film sector, supported by domestic and foreign holidays, orders are concentratedly released. Export orders for some products are increasing, and the demand for rigid products is expected to rise [9]. - In September, the PE pipe market is expected to shift from the off - season to the peak season, but the recovery of relevant industries is insufficient, and the demand recovery amplitude may be limited. After late September, demand is expected to improve [10].

Group 1 - The seventh China-Arab States Expo showcased nearly a thousand quality products from 52 key enterprises in Xinjiang, highlighting the region's unique charm and seeking foreign trade cooperation opportunities [1] - Xinjiang's textile industry is represented by Tianshan Textile Co., which displayed cashmere products, emphasizing the exquisite craftsmanship of "soft gold" [1] - The Xinjiang Cotton Group aims to promote its green and healthy colored cotton products internationally, leveraging the region's advantages in cotton production [2] Group 2 - Ningxia Fuyang Food Co. is enhancing its production line to include butter and adjust its cream production, aiming to improve efficiency and product quality while utilizing local high-quality milk sources [3] - The collaboration between Xinjiang and Ningxia is deepening across various sectors, including energy, transportation, and agriculture, with a focus on expanding international market reach [2][3]

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 14.53 [7][9]. Core Views - The company reported a revenue of RMB 2.078 billion for 1H25, a year-on-year decrease of 11.33%, and a net profit attributable to shareholders of RMB 271 million, down 20.25% year-on-year. The second quarter showed a revenue of RMB 1.183 billion, down 12.16% year-on-year but up 32.14% quarter-on-quarter, indicating that revenue and profit met previous expectations [1][2]. - The company is experiencing a slow recovery in pricing, with overall gross margin under pressure. The gross margin for 1H25 was 40.5%, a decrease of 1.61 percentage points year-on-year [2][3]. - The company is maintaining a stable retail brand presence, which is expected to benefit from urban renewal and renovation demand in the second-hand housing market [4]. Summary by Sections Financial Performance - In 1H25, the company's PPR/PE/PVC pipe business generated revenues of RMB 933 million, RMB 411 million, and RMB 290 million, respectively, with year-on-year declines of 13.04%, 13.28%, and 4.21%. The overall revenue decline is attributed to weak retail momentum and increased price competition in the plastic pipe industry [2]. - The net profit margin for 1H25 was 13.04%, down 1.46 percentage points year-on-year, but the decline in net profit margin for 2Q25 showed a narrowing trend [3]. Dividend Policy - The company plans to distribute a cash dividend of RMB 1 per 10 shares (including tax), resulting in a payout ratio of approximately 58% [4]. Profit Forecast and Valuation - The profit forecasts for 2025-2027 have been revised downwards by 20.39%, 15.67%, and 13.81%, respectively, with projected net profits of RMB 857 million, RMB 1.037 billion, and RMB 1.264 billion [5]. - The target price has been adjusted to RMB 14.53, based on a 27x PE valuation for 2025 [5].

1. Report Industry Investment Rating - The report gives a cautious and bearish outlook for the plastics industry [4][5] 2. Core Viewpoints of the Report - The future outlook for plastics is weak, with a cautious and bearish stance. The plastics 2509 contract closed at 7,143 yuan/ton on April 18, down 109 yuan/ton from the previous week. Spot prices of plastics declined across the board. In the second quarter, the domestic PE market is expected to face significant supply pressure due to planned new capacity of 2.15 million tons. Downstream demand is generally weak, with a sharp decline in the agricultural film sector as the peak season ends, and mediocre demand in the packaging film and pipe sectors. Inventory remains neutral, with no obvious de - stocking trend and low willingness among downstream players to replenish inventory at low prices. However, tariffs may provide some support to market prices. It is expected that the plastics 2505 contract will fluctuate at a low level in the short term [4] 3. Summary by Relevant Catalogs 3.1 Plastic Weekly Market Review - On April 18, the plastics 2509 contract closed at 7,143 yuan/ton, down 109 yuan/ton from the previous week. The market fluctuated at the bottom this week, and the trade war brought great uncertainty, intensifying market fluctuations. LLDPE's South China basis reached 694.65 yuan/ton, a 15.71% increase from the previous week, and the May - September spread was 168 yuan/ton (up 69). Spot prices of plastics declined across the board, with the LDPE average price at 9,166.67 yuan/ton, a 1.08% decrease from the previous week, the HDPE average price at 8,140.00 yuan/ton, a 0.88% decrease, and the average price of LLDPE (7042) in South China at 7,837.65 yuan/ton, a 0.19% decrease [4][8] 3.2 Key Data Tracking - Month Spread | Month Spread | April 18, 2025 (yuan/ton) | Change | | --- | --- | --- | | 1 - 5 | -230 | -48 | | 5 - 9 | 168 | 69 | | 9 - 1 | 62 | -21 | [15] 3.3 Key Data Tracking - Spot Price - Spot prices of various plastics products showed different degrees of decline. For example, the LDPE average price decreased by 1.08%, the HDPE average price decreased by 0.88%, and the average price of LLDPE (7042) in South China decreased by 0.19%. Specific prices and changes in different regions and product categories are detailed in the report [4][8][16] 3.4 Key Data Tracking - Cost - This week, WTI crude oil closed at $63.75 per barrel, up $2.27 from the previous week, and Brent crude oil closed at $67.85 per barrel, up $3.26 from the previous week. The price of anthracite at the Yangtze River port was 1,020 yuan/ton (down 20). It is expected that the crude oil market will maintain a low - level fluctuating trend, and the coal market price has slightly increased [19] 3.5 Key Data Tracking - Profit - The profit of oil - based PE was - 33 yuan/ton, down 249 yuan/ton from the previous week, and the profit of coal - based PE was 1,237 yuan/ton, up 4 yuan/ton from the previous week. It is expected that the profit of oil - based PE and coal - based PE will run weakly [22] 3.6 Key Data Tracking - Supply - This week, the operating rate of China's polyethylene production was 83.81%, up 0.17 percentage points from the previous week, and the weekly polyethylene output was 633,500 tons, a 0.88% increase from the previous week. The maintenance loss this week was 91,900 tons, down 3,900 tons from the previous week. Some enterprises' devices are under maintenance, and there are many planned new capacity projects in 2025 [25][27] 3.7 Key Data Tracking - 2025 Production Plan - Many enterprises have new production capacity plans in 2025, with a total planned capacity of 5.43 million tons. Some projects have already started production, some are in the process of starting up, and others are scheduled to start at different times throughout the year [27] 3.8 Key Data Tracking - Maintenance Statistics - Several enterprises carried out device maintenance this week, such as Baolai LyondellBasell's HDPE device from April 14 to April 20, and Daqing Petrochemical's LLDPE device which stopped on April 16 with an undetermined restart time [28] 3.9 Key Data Tracking - Demand - This week, the overall operating rate of domestic agricultural film was 30.09%, down 7.45% from the previous week; the operating rate of PE packaging film was 47.56%, down 0.51% from the previous week; and the operating rate of PE pipes was 31.50%, down 0.17% from the previous week. The peak season of agricultural film is coming to an end, with an expected further decline, and the operating performance of packaging film and pipes is mediocre due to weak downstream demand [29] 3.10 Key Data Tracking - Downstream Production Ratio - Currently, the production ratio of linear film is the highest, accounting for 36.1%, which is 2% different from the annual average level. The ratio of low - pressure pipes shows a significant difference from the annual average data, currently accounting for 6%, a 4.2% difference from the annual average [34] 3.11 Key Data Tracking - Inventory - This week, the social inventory of plastics enterprises was 616,000 tons, an increase of 2,900 tons from the previous week [36] 3.12 Key Data Tracking - Warehouse Receipts - This week, the number of polyethylene warehouse receipts was 1,565 lots, an increase of 939 lots from the previous week [44]