--- title: "Fangzheng Securities: The reversal of the chemical industry boom may not be far off, optimistic about opportunities for left-side layout in the cycle" type: "News" locale: "en" url: "https://longbridge.com/en/news/223388234.md" description: "Fangzheng Securities released a research report indicating that the turnaround in the chemical industry may not be far off, driven by national policy, with domestic demand expected to recover. Despite the global economic downturn, the profitability level of chemical commodities has reached a historical low. Core assets and leading companies in the basic chemical and petrochemical sectors will benefit from counter-cyclical expansion, with greater performance elasticity when the industry recovers" datetime: "2024-12-27T03:51:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/223388234.md) - [en](https://longbridge.com/en/news/223388234.md) - [zh-HK](https://longbridge.com/zh-HK/news/223388234.md) generator: "portal-rs" --- # Fangzheng Securities: The reversal of the chemical industry boom may not be far off, optimistic about opportunities for left-side layout in the cycle According to the Zhitong Finance APP, Founder Securities has released a research report stating that recent national policies have been continuously strengthened, and future domestic demand is expected to return as the main driver of economic growth. During the window period of the transition from old to new driving forces, a reversal in the chemical industry may not be far off. In the basic chemicals sector, there are opportunities in core assets and regional supply-demand imbalances brought about by de-globalization trends; in the petrochemical sector, it is recommended to focus on leading companies with strong profit resilience that are entering a production realization window, as these companies' counter-cyclical expansions will help maintain their leading positions and provide greater performance elasticity when the industry experiences a reversal in prosperity. ## **Key Points from Founder Securities:** **A reversal in the chemical industry may not be far off.** Chemicals are the foundation of manufacturing and serve as a barometer for the national economy. After entering 2022, the "liquidity" effect in Europe and the United States has gradually weakened, and geopolitical conflicts in Europe have re-emerged, leading to a reversal in supply-demand relationships. The global prosperity of the industry has been declining and has continued to this day, with high oil and coal prices causing industry profits to shift upstream, resulting in chemical commodity profit levels reaching historical lows. Although pressures from the cost side and supply side are difficult to alleviate in the short term, recent national policies have been continuously strengthened, and future domestic demand is expected to return as the main driver of economic growth. During the window period of the transition from old to new driving forces, a reversal in prosperity may not be far off. **In basic chemicals, there are opportunities in core assets and regional supply-demand imbalances brought about by de-globalization trends.** There are opportunities for core chemical assets to reverse first at the industry bottom; currently, de-globalization is an unstoppable trend. In recent years, the de-industrialization process in Europe has accelerated, and U.S. trade protectionism has re-emerged, with an increasing number of anti-dumping investigations against products in which China has competitive advantages. This will exacerbate regional supply-demand imbalances in global chemical trade, posing both crises and opportunities for Chinese chemical companies. On one hand, domestic production capacity unaffected by sanctions is favorable; on the other hand, it benefits the import substitution of high-end domestic products. **In petrochemicals, it is recommended to focus on leading companies with strong profit resilience that are entering a production realization window.** On one hand, these assets are currently valued relatively low, and leading companies with large production capacities often have strong cost advantages, which helps them maintain higher-than-industry profit resilience over long cycles. This also provides a safety margin for allocation under the current context of weak realistic expectations turning strong. On the other hand, these companies' counter-cyclical expansions will help maintain their leading positions, providing greater performance elasticity when the industry experiences a reversal in prosperity. **Investment Recommendations:** It is recommended to focus on core assets such as Wanhua Chemical (600309.SH) and Hualu Hengsheng (600426.SH); Petrochemical blue chips such as Satellite Chemical (002648.SZ) and Baofeng Energy (600989.SH); Beneficiaries of de-globalization such as Zhuoyue New Energy (688196.SH), Yaxiang Co., Ltd. (301220.SZ), Ruifeng New Materials (300910.SZ), and Wanrun Co., Ltd. (002643.SZ), while also paying attention to Tongkun Co., Ltd. (601233.SH) and Xinfengming (603225.SH), which have a high probability of optimizing supply-side conditions. **Risk Warning:** Macroeconomic performance may be worse than expected, changes in the chemical capacity cycle may exceed expectations, oil prices may fluctuate significantly, and there are safety and environmental risks in the chemical industry ### Related Stocks - [002408.CN](https://longbridge.com/en/quote/002408.CN.md) - [001228.CN](https://longbridge.com/en/quote/001228.CN.md) - [603713.CN](https://longbridge.com/en/quote/603713.CN.md) - [002930.CN](https://longbridge.com/en/quote/002930.CN.md) - [600579.CN](https://longbridge.com/en/quote/600579.CN.md) - [002643.CN](https://longbridge.com/en/quote/002643.CN.md) - [600310.CN](https://longbridge.com/en/quote/600310.CN.md) - [601901.CN](https://longbridge.com/en/quote/601901.CN.md) - [002648.CN](https://longbridge.com/en/quote/002648.CN.md) - [300910.CN](https://longbridge.com/en/quote/300910.CN.md) - [20030.HK](https://longbridge.com/en/quote/20030.HK.md) - [603071.CN](https://longbridge.com/en/quote/603071.CN.md) - [600309.CN](https://longbridge.com/en/quote/600309.CN.md) - [601233.CN](https://longbridge.com/en/quote/601233.CN.md) - [600989.CN](https://longbridge.com/en/quote/600989.CN.md) - [600415.CN](https://longbridge.com/en/quote/600415.CN.md) - [688196.CN](https://longbridge.com/en/quote/688196.CN.md) - [603225.CN](https://longbridge.com/en/quote/603225.CN.md) - [301220.CN](https://longbridge.com/en/quote/301220.CN.md) - [600426.CN](https://longbridge.com/en/quote/600426.CN.md) - [601399.CN](https://longbridge.com/en/quote/601399.CN.md) ## Related News & Research - [11:30 ETWho Are the Fastest-Growing Wealth Management Firms in South Florida? 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