Huatai Securities: The petroleum and chemical industry sector will still be under pressure in the first half of the year, but industry recovery is approaching.

Huatai Securities research report indicates that in the first half of the year, the profitability of bulk chemical enterprises is at a bottoming stage, with downstream products and fine chemicals benefiting from the automotive, household appliance sectors, leading to overall improvement. In the second quarter, the oil and gas industry chain is under pressure, and signs of supply and demand improvement for some bulk chemicals in the midstream segment are beginning to appear, but profitability improvement for downstream products and fine chemicals is relatively limited due to export influences. It is expected that as the negative impact of overseas tariff policies gradually dissipates and industry capital expenditure shifts towards a downturn channel in the second half of 2025, combined with improvement in exports to Asia, Africa, and domestic demand, the industry's prosperity is expected to gradually recover. In the short term, it is recommended to focus on varieties with resilient domestic and international demand and improved competitive landscape, including refrigerants, amino acids, as well as downstream modified plastics, additives, and other areas. In the medium to long term, chemical enterprises with global advantages are expected to be reassessed after the industry's prosperity hits bottom.