Core Viewpoint - Wanhua Chemical's price increases for MDI and TDI products are part of a broader global trend, driven by supply disruptions and rising raw material costs, amidst a high concentration of industry players [1][4][5]. Price Adjustments - Wanhua Chemical has announced multiple price hikes since December 2025, with increases of $200/ton for MDI in Southeast Asia and South Asia, and €300/ton in Europe [4]. - Other major companies like BASF and Dow have also raised prices, indicating a strong market adjustment across the polyurethane sector [4]. Supply Chain Disruptions - The price increases are attributed to unexpected production halts and geopolitical tensions affecting raw material costs [5]. - Notable production disruptions include a month-long shutdown of Hunstman’s MDI facility in the Netherlands and Wanhua's 100,000-ton MDI capacity in Ningbo, which is undergoing maintenance for 55 days [5][7]. Industry Dynamics - The polyurethane industry is characterized by high concentration, with major players like Wanhua, BASF, and Hunstman dominating the market, which limits the impact of domestic competition [1][5]. - The ongoing supply issues in Europe, particularly concerning ethylene, are expected to persist, affecting the overall production landscape [7][8]. Market Performance - Wanhua Chemical's stock has seen a rise of over 12% in the past 20 days, with a market capitalization of 240 billion yuan as of December 31, 2025 [1][2]. - The company's revenue for the first three quarters of the year was 144.23 billion yuan, a slight decline of 2.29% year-on-year, while net profit showed a smaller decline of 17.45% [10]. Future Outlook - Analysts suggest that the recovery of downstream demand is crucial for the overall improvement of the chemical sector, with expectations of a gradual recovery in Wanhua's operational performance [10][11]. - The ongoing capital investments in China's chemical industry and the exit of overseas capacities may stabilize the market in the coming years [11].

Core Viewpoint - The article discusses the recent price increases in the polyurethane industry, particularly focusing on Wanhua Chemical's price adjustments for MDI and TDI products, which are part of a broader trend influenced by supply disruptions and geopolitical factors [1][4][5]. Price Adjustments - Wanhua Chemical has announced multiple price increases for its core products, including MDI and TDI, starting from December 1, 2025, with increases of $200/ton in Southeast Asia and South Asia, and €300/ton in Europe [4]. - Following Wanhua, other major players like BASF and Dow also raised their MDI prices, indicating a synchronized market response [4][5]. - The price adjustments are attributed to unexpected production halts and rising raw material costs due to geopolitical tensions [5][6]. Supply Chain Disruptions - The polyurethane industry is experiencing significant supply chain disruptions due to unexpected maintenance and production halts at major facilities, including Wanhua's and BASF's plants [6]. - Notably, Hunstman’s MDI facility in the Netherlands faced an unexpected shutdown, exacerbating supply shortages [5][6]. - The article highlights that the European ethylene supply is under pressure, with several plants expected to close or reduce output, further tightening the market [8][9]. Market Dynamics - The article notes that the polyurethane industry has a high concentration of major global players, which limits the impact of domestic competition on pricing [1]. - Analysts suggest that the current price increases are part of a normal market adjustment rather than a reaction to domestic competition [1]. - The overall market sentiment is shifting towards a more optimistic outlook, with expectations of recovery in downstream demand being crucial for the industry's long-term health [12][13]. Future Outlook - The article indicates that while the current price increases are beneficial, the recovery of downstream demand is essential for sustained growth in the chemical sector [12]. - Analysts from UBS believe that the capital expenditure in China's chemical industry is beginning to decline, which may stabilize the industry's performance in the coming years [13]. - The article concludes that Wanhua Chemical's strategic positioning and the ongoing global supply adjustments could enhance its market share and profitability in the future [13].

Investment Rating - The report maintains an "Overweight" rating for the basic chemical industry [2] Core Views - The report indicates that the supply and demand for polycarbonate (PC) are gradually improving, suggesting that the industry may enter a prosperous cycle [6][8] - The demand for PC is expected to grow significantly due to the increasing penetration of downstream applications such as electric vehicles, electronics, and optical materials [9] - The report highlights that the domestic production capacity of PC has increased from 12% in 2017 to 49% by 2025, indicating a significant shift towards domestic production [6][9] Summary by Sections Investment Recommendations - Recommended stocks include: - Wanhua Chemical (600309 CH) with a target price of 85.20 and a "Buy" rating - Luxi Chemical (000830 CH) with a target price of 17.85 and a "Buy" rating - Hengli Petrochemical (600346 CH) with a target price of 24.48 and an "Overweight" rating - Rongsheng Petrochemical (002493 CH) with a target price of 12.48 and an "Overweight" rating [5][34] Supply and Demand Dynamics - The report forecasts that the industry operating rates will improve to 87% in 2025, 94% in 2026, and 95% in 2027, driven by limited new capacity additions and ongoing demand growth [10] - The overall demand for PC is projected to reach 360 million tons in 2024, with a compound annual growth rate (CAGR) of 11% from 2018 to 2024 [9][32] Competitive Landscape - The competitive landscape for PC is relatively favorable, with major production concentrated among leading chemical companies that possess the necessary technical qualifications [6] - The report notes that the market concentration has decreased from 80% in 2017 to 62% globally by 2025, while domestic concentration is expected to be 66% [6] Price Trends - As of December 30, 2024, PC prices have increased by 3% from the low point in September 2024, indicating a recovery in the market [10] - The report highlights that the price of PC is expected to continue to rise as supply and demand improve [10]

Core Viewpoint - The chemical industry, particularly the polyurethane sector, is experiencing a price increase led by Wanhua Chemical, but a full recovery is still distant due to ongoing challenges in downstream demand and supply chain issues [1][8]. Price Increase Dynamics - Wanhua Chemical has initiated multiple price hikes for its core products, including MDI and TDI, starting from December 2025, following similar moves by global giants like BASF and Dow [1][2]. - The price adjustments include a $200/ton increase for MDI in Southeast Asia and South Asia, and a €300/ton increase for all MDI products in Europe [2][3]. - The price surge is attributed to unexpected production halts and geopolitical factors affecting raw material costs, alongside seasonal maintenance peaks [3][5]. Supply Chain Challenges - Significant production disruptions have occurred, including a one-month shutdown of Hunstman’s MDI facility in the Netherlands and maintenance at Wanhua's 1 million ton/year MDI plant in Ningbo [4][5]. - The ongoing structural shortage of ethylene in Europe and Asia is a critical concern, exacerbated by the permanent closure of several ethylene cracking facilities by major companies [6][7]. Industry Outlook - The chemical industry in Europe faces long-term challenges due to energy structure issues and stringent carbon emission policies, which may weaken its international competitiveness [7]. - Despite the supply issues in Europe and Japan, a complete recovery of the industry hinges on the rebound of downstream demand [8][9]. - Wanhua Chemical's financial performance shows signs of stabilization, with a slight increase in net profit in Q3 2025, although overall revenue remains down year-on-year [11].

Investment Rating - The industry investment rating is maintained as "Positive" [5] Core Viewpoints - The rise in PX prices has triggered a bullish trend in the petrochemical sector, indicating long-term recovery opportunities for the industry [2][7] - The report highlights that the increase in PX prices, with futures rising over 800 CNY/ton and spot prices up about 340 CNY/ton, has improved profit expectations for refining companies [7] - The report emphasizes that the refining industry has faced prolonged downturns, with major companies encountering challenges such as declining domestic demand for refined oil and stagnant export quotas [7] - The appointment of new leadership at China Petroleum & Chemical Corporation is seen as a potential catalyst for industry recovery [7] Summary by Relevant Sections Investment Recommendations and Targets - Recommended leading companies in the refining sector include Sinopec (600028, Buy), Rongsheng Petrochemical (002493, Buy), and Hengli Petrochemical (600346, Buy) [3] - The report expresses optimism for recovery opportunities across various chemical sub-industries, including MDI leader Wanhua Chemical (600309, Buy) and companies in the PVC sector such as Zhongtai Chemical (002092, Not Rated), Xinjiang Tianye (600075, Not Rated), and Chlor-alkali Chemical (600618, Not Rated) [3] - In the phosphoric chemical sector, companies like Chuanheng Co. (002895, Not Rated) and Yuntianhua (600096, Not Rated) are highlighted due to growth driven by energy storage [3] - The oxalic acid industry recommendations include Hualu Hengsheng (600426, Buy), Huayi Group (600623, Buy), and Wankai New Materials (301216, Buy) [3]

Market Performance - The basic chemical index increased by 2.58% from December 13 to December 19, while the CSI 300 index decreased by 0.28%, indicating that the basic chemical sector outperformed the CSI 300 by 2.85 percentage points, ranking fifth among all sectors [1][2] - The top-performing sub-industries included spandex (15.38%), other rubber products (10.78%), viscose (5.14%), civil explosives (4.25%), and potassium fertilizer (3.98%) [1][2] Chemical Price Trends - The top five products with the highest weekly price increases were hydrochloric acid (Jiangsu) at 57.14%, hydrochloric acid (Shandong) at 44.44%, industrial-grade lithium carbonate at 7.63%, battery-grade lithium carbonate at 7.57%, and butadiene at 6.12% [3] - The top five products with the largest weekly price declines included concentrated nitric acid at -9.30%, VCM (vinyl chloride monomer) at -6.25%, international gasoline at -6.11%, caustic soda (32% ion membrane) at -5.45%, and sulfur at -5.06% [3] Industry Dynamics - The sulfuric acid industry is focusing on supply stability and price control to ensure national food security, with measures being implemented to stabilize fertilizer supply and prices ahead of the spring farming season [4] - The current international sulfur supply is tight, leading to increased global sulfur resource prices and significantly raising the production costs for phosphate fertilizer [4] - As of December 19, the market price for sulfuric acid (98% smelting acid, Shandong) was 865 RMB/ton, with an increase of 8.81% in December and a year-to-date increase of 162.12% [4] Company Developments - Mitsui Chemicals announced an expansion of its MDI production capacity in South Korea, adding 100,000 tons/year, which will increase the plant's annual capacity from 610,000 tons to 710,000 tons, with production expected to start in May 2027 [5] - Dow Chemical plans to raise prices for its polymer MDI products in Southeast Asia by $200/ton, while Wanhua Chemical will also increase prices for all MDI and TDI products in Latin America by $200/ton starting December 15 [5] Investment Recommendations - The current investment focus includes the refrigerant sector, chemical fiber sector, and high-quality growth stocks, with specific companies recommended for attention [6] - Suggested companies in the refrigerant sector include Jinshi Resources, Juhua Co., and Sanmei Co. [6] - In the chemical fiber sector, recommended companies include Huafeng Chemical and Xinfengming [6] - Other notable companies include Wanhua Chemical, Hualu Hengsheng, and Luxi Chemical [6]

Group 1 - The "Spring Market" is gradually unfolding, with both internal and external environments showing positive changes, including favorable macroeconomic conditions and supportive policies [2][3] - The report suggests that the focus for investment should be on growth sectors, particularly those related to the "14th Five-Year Plan," which is expected to attract significant capital [3][4] - Key investment directions for January include AI industry chains, emerging industries, and cyclical price increases in industrial metals and chemicals [6][7] Group 2 - The report highlights specific companies as top investment picks, including North China Innovation (机械), Maiwei Co., Ltd. (机械), Wanhua Chemical (能源化工), Chipbond Technology (电子), Ping An Insurance (非银), Zijin Mining (煤炭有色钢铁), Giant Network (传媒互联网), AVIC High-Tech (军工), Sanhua Intelligent Control (电新), and Kaiter (北交所) [7][11] - North China Innovation is expected to benefit from increased domestic equipment adoption and the expansion of storage and AI chip production [14][20] - Maiwei Co., Ltd. is positioned to capitalize on the U.S. solar expansion due to a significant gap in battery production capacity [23][30] - Wanhua Chemical is projected to strengthen its market position in MDI and TDI, with expected price increases due to supply constraints [33][35] - Chipbond Technology is set to benefit from the growing demand for PCB and semiconductor equipment driven by AI [41][42] - Ping An Insurance is anticipated to maintain strong growth in new business value (NBV) and dividend yield, supported by its insurance operations [45][46] - Zijin Mining is expected to see price increases in gold and copper, with a clear growth path in production [49][50] - Giant Network's game "Supernatural Action Group" is expected to show significant potential for long-term growth and profitability [56][57] - AVIC High-Tech is positioned to benefit from the increasing demand for aerospace composite materials as the C919 enters mass production [58][59] - Sanhua Intelligent Control is expected to see growth from its involvement in Tesla's supply chain and the increasing demand for cooling solutions in data centers and energy storage [65][66] - Kaiter is projected to benefit from the automotive electronics sector and its expansion into robotics and liquid cooling markets [72][78]

Group 1 - The core point of the article is that Wanhua Chemical (Ningbo) Co., Ltd. has obtained a patent for a new automotive bumper material with high paint adhesion, indicating innovation in the chemical manufacturing sector [1] - The patent, titled "A High Paint Adhesion Automotive Thin-Walled Bumper Material, Preparation Method and Its Application," was granted with the announcement number CN116855014B and was applied for on July 2023 [1] - Wanhua Chemical (Ningbo) Co., Ltd. was established in 2006 and is located in Ningbo City, primarily engaged in the manufacturing of chemical raw materials and products [1] Group 2 - The company has a registered capital of 93.6 million RMB [1] - According to data from Tianyancha, Wanhua Chemical has invested in 8 enterprises and participated in 742 bidding projects, showcasing its active role in the industry [1] - The company holds a total of 1,059 patents and has obtained 128 administrative licenses, reflecting its strong focus on innovation and compliance [1]

Core Insights - The 2026 "Bet on China" top ten core assets have been announced by Gelonghui, a well-known independent research institution in China, based on votes from millions of members across over 70 countries [1][3] - The selection process involved over half a month of voting, resulting in hundreds of thousands of valid votes, emphasizing the collective wisdom of global investors [3] Selection Criteria - The selected listed companies must meet four key principles, reflecting the uncertainties in the Chinese investment market for 2025, including fluctuating recovery expectations, real estate stability concerns, and the ambiguity in investment directions related to AI and new energy [2] Performance Metrics - Since the end of 2018, the "Bet on China" top ten core assets index has achieved a cumulative increase of 318.67%, significantly outperforming the CSI 300 index (+56.2%), Hang Seng index (-0.82%), and S&P 500 index (+175.3%) [3] - In 2025, the equal-weighted return of the top ten core assets reached 35.1%, again surpassing the CSI 300 index (+17.7%), Hang Seng index (+27.8%), and S&P 500 index (+17.3%) [3] Core Assets Overview 1. **Zhongji Xuchuang (300308)**: Expected to benefit from the acceleration of AI computing infrastructure in China, with a projected demand for optical modules reaching 18 billion yuan, and a 50% annual growth in domestic demand for 800G optical modules [5] 2. **Tencent Holdings (00700.HK)**: With a massive user base, Tencent is expected to see its advertising revenue exceed 40 billion yuan in 2026, driven by its social media platforms and AI efficiency improvements [6][7] 3. **Alibaba (09988.HK)**: Anticipated to achieve 170 billion yuan in revenue from cloud services, with a growth rate of 34%, while also focusing on domestic consumption upgrades [7][8] 4. **Gold ETF (518880)**: Positioned as a key hedging tool for domestic investors, with a forecasted gold price potentially reaching 5,000 USD per ounce, supported by liquidity and geopolitical factors [8] 5. **Luoyang Molybdenum (603993/03993.HK)**: Expected to produce 660,000 tons of copper and 120,000 tons of cobalt in 2026, benefiting from the growth of the domestic electric vehicle market [9] 6. **Ping An Insurance (601318/02318.HK)**: Projected to see a 20%-25% increase in market value, benefiting from the domestic interest rate cycle and a focus on quality equity assets [10] 7. **Dongfang Caifu (300059)**: Anticipated to see a 22%-28% growth in market value, driven by increased capital market activity and AI-driven wealth management services [11] 8. **Wanhua Chemical (600309)**: Expected to achieve a net profit of 15.5-16.2 billion yuan in 2026, supported by domestic demand for MDI and new materials [12] 9. **WuXi AppTec (02268.HK)**: Positioned as a leader in the ADC field, with over 60% of its pipeline serving domestic clients, reflecting the growth of China's biopharmaceutical industry [13] 10. **Trip.com Group (09961.HK)**: Projected to see a revenue growth of over 25%, benefiting from the recovery of domestic travel and tourism [14] Conclusion - The ten core assets are aligned with China's key sectors such as AI computing, new energy, consumption, finance, and biomedicine, reflecting the country's new productive forces and upgrading of livelihoods [14]

Core Insights - The article presents the "Top 10 Core Assets for 2026" as voted by millions of members from over 70 countries, highlighting the collective wisdom of global investors in navigating market uncertainties [2][5]. Summary by Categories Core Assets - The selected core assets include: - **Zhongji Xuchuang (中际旭创)**: Market cap of 6,778 million RMB, focusing on AI and advanced manufacturing [3] - **Tencent (腾讯)**: Market cap of 49,160 million RMB, centered on AI applications [3] - **Alibaba (阿里巴巴)**: Market cap of 24,500 million RMB, involved in AI and cloud computing [3] - **Gold ETF (黄金ETF)**: Market cap of 1 million RMB, categorized under precious metals [3] - **Luoyang Molybdenum (洛阳钼业)**: Market cap of 4,279 million RMB, with no specific industry listed [3] - **China Ping An (中国平安)**: Market cap of 12,400 million RMB, in the financial sector [3] - **Dongfang Caifu (东方财富)**: Market cap of 3,663 million RMB, with no specific industry listed [3] - **Wanhua Chemical (万华化学)**: Market cap of 2,400 million RMB, in the chemical industry [3] - **WuXi AppTec (药明合联)**: Market cap of 1,515 million RMB, in the pharmaceutical sector [3] - **Trip.com Group (携程集团)**: Market cap of 3,250 million RMB, in consumer discretionary [3] Market Context - The investment landscape in China for 2025 is characterized by uncertainties, including fluctuating recovery expectations, geopolitical tensions, and evolving trends in real estate and AI [4]. - The article emphasizes the importance of collective intelligence in investment decisions, asserting that the aggregated insights from millions can effectively guide investors through market complexities [5][7]. Performance Metrics - From 2019 to 2025, the "Top 10 Core Assets Index" achieved a cumulative growth of 318.67%, significantly outperforming the CSI 300 Index (+56.2%) and the Hang Seng Index (-0.82%) [11]. - In 2025, the equal-weighted return of the top assets reached 35.1%, again surpassing the performance of major indices [11]. Selection Criteria - The selected companies must meet four key principles: 1. Represent Chinese enterprises with a domestic market focus 2. Align with future economic directions and create long-term value 3. Possess competitive advantages or potential in emerging sectors 4. Have a projected market cap growth of 20% or more in 2026 [10] Individual Company Insights - **Zhongji Xuchuang**: Expected to benefit from a surge in AI-related demand, with a projected market cap growth of 25%-30% [12]. - **Tencent**: Anticipated to see a 25%-30% increase in adjusted net profit, driven by its strong domestic user base and advertising revenue [13]. - **Alibaba**: Forecasted to achieve a 25%-28% stock price increase, supported by its dual focus on AI and consumer markets [14]. - **Gold ETF**: Positioned as a key hedging tool, with a projected 28%-32% growth in fund inflows [15]. - **Luoyang Molybdenum**: Expected to maintain its leading position in the battery materials sector, with a projected net profit of 320-350 million RMB [16]. - **China Ping An**: Anticipated to grow its market cap by 20%-25%, benefiting from the domestic financial market's recovery [17]. - **Dongfang Caifu**: Projected to see a 22%-28% increase in market cap, driven by the growth in wealth management services [18]. - **Wanhua Chemical**: Expected to achieve a net profit of 155-162 million RMB, supported by domestic demand [19]. - **WuXi AppTec**: Positioned as a leader in the ADC field, with significant growth driven by domestic innovation [20]. - **Trip.com Group**: Forecasted to grow revenue by over 25%, capitalizing on the recovery of domestic travel [21]. Conclusion - The selected core assets reflect a strategic alignment with China's economic growth and key sectors, including AI, renewable energy, finance, and healthcare, emphasizing their potential for long-term value creation [22].