HUALU-HENGSHENG(SH:600426)2026-01-21 02:25Summary of Conference Call Notes Industry Overview - The chemical industry is experiencing a recovery in price differentials, with many cyclical products at historical lows. The "anti-involution" policy is being implemented, with the National Development and Reform Commission controlling new capacity and the Ministry of Industry and Information Technology accelerating the elimination of excess capacity. This has led to a significant upturn in the market for products such as caprolactam, acetic acid, DMC, urea, and oxalic acid, alongside a decline in coal prices, resulting in improved performance metrics [1][2]. Key Points - Price Differential Recovery: The trend of recovering price differentials remains unchanged, and risks have largely been mitigated. Most cyclical products are at historical low price differentials, indicating a potential for upward movement in pricing [1][2]. - New Projects and Competitive Edge: The company is focusing on new projects that align with favorable market conditions while enhancing the competitiveness of existing projects. Long-term growth prospects are not a concern, indicating a stable outlook for the company [1][2]. - Strategic Developments in Jingzhou: Jingzhou is pursuing an excellent industry structure and new material demand, having already laid out a plan for a 300,000-ton TDI project, with approximately 3-4 projects in reserve. This positions the company well for future growth [2]. - Efficiency Improvements in Dezhou: Dezhou is focused on quality enhancement and efficiency improvements, planning to replace gasification furnaces and purification devices on its first and second platforms. This is expected to yield a profit increase of approximately 600-1,000 million, significantly enhancing on-balance sheet growth [2]. Additional Important Insights - The overall sentiment in the chemical industry is positive, with a clear indication of rising demand and improved pricing power for key products. The strategic focus on both new and existing projects suggests a proactive approach to market challenges and opportunities [1][2].