Zhongyuan Securities: The overall performance of the chemical industry picked up in the first half of the year, and further improved in the second quarter compared to the same period last month

The Zhitong Finance App learned that Zhongyuan Securities released research results to maintain the basic chemical industry's “simultaneous market” investment rating. In terms of investment ideas in the chemical industry, on the one hand, it is recommended to benefit sectors where there is plenty of room for improvement on the supply side and the boom is expected to recover, including sub-industries such as polyester filaments, dyes, and silicones; on the other hand, it is recommended to focus on new material sectors such as electronic chemicals and packaging materials.

The main views of Zhongyuan Securities are as follows:

The overall revenue and profit of the basic chemical industry rebounded in the first half of 2026, and the industry sentiment continued to recover

In the first half of 2026, the CITIC basic chemical industry achieved total revenue of 1605.362 billion yuan, an increase of 23.61% year on year, and realized net profit of 121,833 billion yuan, an increase of 52.97% year on year. The revenue and profit of the basic chemical industry showed an upward trend in the first half of 2026. Compared with the results of the first quarter report, the growth rate of the interim report increased further. In the second quarter of 2026, the revenue and profit of the basic chemical industry increased sharply year on year, and continued to improve month-on-month, and the industry boom continued to recover.

In the first half of 2026, the revenue of the 33 sub-industries of basic chemicals increased year-on-year, and the net profit of 27 sub-industries increased. The overall industry showed a recovery trend

Benefiting from the boom brought about by factors such as the optimization of the industry's supply and demand pattern and recovery in demand, the net profit of industries such as membrane materials, lithium battery chemicals, viscose, nylon, and other plastic products grew rapidly. In the second quarter of 2026, the revenue and net profit of most sub-sectors improved month-on-month.

The profitability of the industry continues to rise, and gross margin continues to improve

Since the third quarter of 2023, the basic chemical industry has stabilized at its bottom, and the decline in profitability has slowed. The profitability of the industry has further improved since 2026. In the second quarter, the overall gross margin of the basic chemical industry was 20.51%, and the net profit margin was 8.66%. The gross margin reached a record high since 2023. The profitability of the sector mostly improved in the first half of the year, and sub-industries such as potash, silicone, spandex, membrane materials and carbon fiber improved significantly.

The overall financial indicators of the basic chemical industry are stable, and the scale of projects under construction continues to decline

In the second quarter of 2026, the balance ratio of the basic chemical industry was generally stable, and operating cash flow increased sequentially. Investment in the industry has continued to slow, and the scale of projects under construction has continued to decline since the third quarter of 2024. The number of inventory turnover days in the industry declined slightly year-on-year, and operating capacity improved.

Chemical enterprises in Henan Province have generally recovered, and the growth rate is lower than the industry level

In the first half of 2026 and the second quarter, listed basic chemical companies in Henan Province achieved revenue of 430.44 billion yuan and 22.461 billion yuan, up 14.72% and 19.87% year on year; net profit of 24.93 billion yuan and 1,580 billion yuan, up 27.55% and 65.64% year on year; gross margin was 18.66% and 20.05% respectively, net interest rates were 6.31% and 7.64% respectively. The industry's revenue and profit growth rate was lower than the overall level of the industry, and profitability was slightly weaker than the overall level of the industry.

Risk warning: demand falls short of expectations, sharp expansion of industry production capacity, sharp rise in energy prices