Shenwan Hongyuan: Q3 2025 off-season combined with rising costs, cyclical product price differentials decline, chemical profits seasonally under pressure

According to the Zhitong Finance APP, Shenwan Hongyuan released a research report stating that in Q3 2025, the downstream traditional off-season saw a high retreat in chemical prices, while oil and coal prices rose month-on-month. However, high demand in sub-sectors such as agrochemicals supported performance. In the traditional off-season of Q3, downstream operations decreased, and the overall state was one of destocking. Coupled with a rebound in energy prices from the bottom, the price differentials of some cyclical products fell from high levels, putting pressure on performance month-on-month. According to Wind statistics, the average spot price of Brent in Q3 2025 was USD 69.29/barrel, with year-on-year changes of -14%/+2%; NYMEX natural gas futures price was USD 3.08/million BTU, with year-on-year changes of +38%/-12%; the average price of 5500 kcal thermal coal at Qinhuangdao Port was RMB 673/ton, with year-on-year changes of -21%/+5%. Although oil and coal prices significantly weakened year-on-year, they still rebounded month-on-month, leading to increased cost pressures for chemical products.

Based on the earnings forecasts for mainstream chemical companies tracked, the weighted average EPS for Q3 2025 is expected to be RMB 0.25, with year-on-year changes of +24.93%/-0.08%. Month-on-month, it is expected to slightly weaken due to seasonality, but there is a significant year-on-year improvement. The sub-sectors expected to see a large year-on-year increase in net profit in Q3 2025 mainly include pesticides, phosphorus chemicals, potassium fertilizers, fluorochemicals, civil explosives, semiconductor materials, display materials, catalytic materials, and modified plastics. The sub-sectors expected to see a significant month-on-month increase in net profit in Q3 2025 mainly include phosphorus chemicals, potassium fertilizers, tires, semiconductor materials, display materials, and modified plastics. Among them, the agrochemical sector, including pesticides, phosphorus chemicals, and potassium fertilizers, has strong demand support, coupled with the issuance of export quotas for phosphorus and nitrogen fertilizers, resulting in good performance.

Blue-chip targets: Q3 MDI price differentials fluctuate, TDI price differentials recover from the bottom. It is expected that Wanhua Chemical's net profit for Q3 2025 will be RMB 3 billion (YoY +3%, QoQ -1%, referring to net profit attributable to the parent company, the same below). Coal prices increased month-on-month, putting pressure on the profitability of coal chemical companies. It is expected that Hualu Hengsheng's net profit for Q3 2025 will be RMB 800 million (YoY -3%, QoQ -7%); Luxi Chemical's net profit for Q3 2025 will be RMB 280 million (YoY -31%, QoQ -20%); Baofeng Energy's Inner Mongolia project begins to deliver, expected to be RMB 3.2 billion for Q3 2025 (YoY +160%, QoQ -2%).

The spandex price differential has narrowed, but the profitability of adipic acid has improved, with leading companies having strong scale advantages. It is expected that Huafeng Chemical's net profit for Q3 2025 will be RMB 480 million (YoY -3%, QoQ flat). The prosperity of phosphate rock remains high, and the premium for phosphate fertilizer exports is significant. It is expected that Yuntianhua's net profit for Q3 2025 will be RMB 1.9 billion (YoY +20%, QoQ +29%); Xingfa Group's net profit for Q3 2025 will be RMB 600 million (YoY +18%, QoQ +44%); Batian Co., Ltd.'s net profit for Q3 2025 will be RMB 285 million (YoY +428%, QoQ flat); Yuntu Holdings' net profit for Q3 2025 will be RMB 180 million (YoY -16%, QoQ -30%); Xinyangfeng's net profit for Q3 2025 will be RMB 400 million (YoY +7%, QoQ -8%); Stanley's net profit for Q3 2025 will be RMB 190 million (YoY +23%, QoQ -40%) Fluorochemical Targets: Strong Support from Supply Side, Continued Improvement in Refrigerant Prosperity, Q3 Off-Season Shipments May Decrease

It is expected that Juhua Co., Ltd. will achieve CNY 1.25 billion in Q3 2025 (YoY +196%, QoQ +1%); Sanmei Co., Ltd. will achieve CNY 595 million in Q3 2025 (YoY +236%, QoQ flat); Yonghe Co., Ltd. will achieve CNY 195 million in Q3 2025 (YoY +474%, QoQ +12%); Q3 fluorite prices have bottomed out and rebounded, with profits from associated mineral projects gradually emerging, it is expected that Jinshi Resources will achieve CNY 100 million in Q3 2025 (YoY +20%, QoQ +69%).

Tire Targets: Gradual Recovery After Tariff Impact, Combined with Peak Season in Q3, Overall Sales Volume Increases Month-on-Month

It is expected that Sailun Tire will achieve CNY 1.05 billion in Q3 2025 (YoY -4%, QoQ +33%); Senqili will achieve CNY 350 million in Q3 2025 (YoY -46%, QoQ +13%); Linglong Tire will achieve CNY 300 million in Q3 2025 (YoY -62%, QoQ -42%); Guizhou Tire will achieve CNY 190 million in Q3 2025 (YoY +42%, QoQ +4%); General Motors will achieve CNY 20 million in Q3 2025 (YoY -78%, QoQ turning profitable); Triangle Tire will achieve CNY 250 million in Q3 2025 (YoY -8%, QoQ +9%); Quercus will achieve CNY 128 million in Q3 2025 (YoY +9%, QoQ -7%); Hailide will achieve CNY 110 million in Q3 2025 (YoY +3%, QoQ -29%); Yanggu Huatai will achieve CNY 65 million in Q3 2025 (YoY +41%, QoQ flat).

Cyclical Products Sector: Improvement in Supply and Demand Pattern, Increased Prosperity in Potash Fertilizer and Pesticides

Soda Ash: It is expected that Boyuan Chemical will achieve CNY 350 million in Q3 2025 (YoY -41%, QoQ -13%); Sanyou Chemical will achieve CNY 120 million in Q3 2025 (YoY +79%, QoQ +30%); Zhongyan Chemical will achieve CNY 20 million in Q3 2025 (YoY -85%, QoQ -43%). Potash Fertilizer: It is expected that Salt Lake Co., Ltd. will achieve CNY 2 billion in Q3 2025 (YoY +115%, QoQ +46%); Yara International will achieve CNY 550 million in Q3 2025 (YoY +122%, QoQ +17%); Dongfang Iron Tower will achieve CNY 330 million in Q3 2025 (YoY +73%, QoQ +15%).

Pesticides: It is expected that Yangnong Chemical will achieve CNY 320 million in Q3 2025 (YoY +22%, QoQ -14%); RAINBOW CHEMICAL will achieve CNY 360 million in Q3 2025 (YoY +125%, QoQ +20%); Cynda will achieve CNY 80 million in Q3 2025 (YoY +7900%, QoQ -30%).

Civil Explosives: It is expected that Yipuli will achieve CNY 200 million in Q3 2025 (YoY +16%, QoQ -18%); Guangdong Hongda will achieve CNY 300 million in Q3 2025 (YoY +27%, QoQ -27%); Jiangnan Chemical will achieve CNY 340 million in Q3 2025 (YoY +2%, QoQ +21%); Xuefeng Technology's Q3 2025 revenue is expected to be 120 million yuan (YoY -43%, QoQ -28%).

New Materials Sector: The process of domestic self-control is accelerating, and domestic alternative material companies continue to scale up

The localization of the domestic semiconductor industry is steadily advancing, with continued capital investment downstream. It is expected that Yake Technology's Q3 2025 revenue will be 275 million yuan (YoY +20%, QoQ +5%). New Energy Materials: It is expected that Xinzhoubang's Q3 2025 revenue will be 240 million yuan (YoY -16%, QoQ -6%); Taihe New Materials' Q3 2025 revenue will be 13 million yuan (YoY -62%, QoQ -13%); Xinhua Co., Ltd.'s Q3 2025 revenue will be 50 million yuan (YoY +52%, QoQ -35%); Biomaterials: It is expected that Huaheng Biological's Q3 2025 revenue will be 40 million yuan (YoY +100%, QoQ -38%); Meihua Biological's Q3 2025 revenue will be 550 million yuan (YoY +6%, QoQ -27%); Lanxiao Technology's Q3 2025 revenue will be 250 million yuan (YoY +30%, QoQ flat); Guoci Materials' Q3 2025 revenue will be 170 million yuan (YoY +12%, QoQ -13%).

Lubricants and Plastic Additives: It is expected that Ruifeng New Materials' Q3 2025 revenue will be 190 million yuan (YoY +5%, QoQ +9%); Lianlong's Q3 2025 revenue will be 145 million yuan (YoY +54%, QoQ +9%); Chenghe Technology's Q3 2025 revenue will be 80 million yuan (YoY +14%, QoQ +5%).

Food and Feed Additives: It is expected that Jinhua Industry's Q3 2025 revenue will be 60 million yuan (YoY -63%, QoQ -35%); Bailong Chuangyuan's Q3 2025 revenue will be 95 million yuan (YoY +51%, QoQ +8%); Xinhengcheng's Q3 2025 revenue will be 1.5 billion yuan (YoY -16%, QoQ -13%). Modified Plastics: It is expected that Jinfeng Technology's Q3 2025 revenue will be 380 million yuan (YoY +25%, QoQ +12%); Guoen Co., Ltd.'s Q3 2025 revenue will be 270 million yuan (YoY +47%, QoQ +15%).

Core Assumption Risks

1. The progress of new industry projects is less than expected; 2) Export obstacles lead to a significant decline in the prices of certain chemical products