Due to lower-than-expected market demand in the previous period, the sector experienced an adjustment in the past two months. With the advent of the industry's traditional peak season, superimposed environmental protection has seen a new round of strengthening trends, leading to a major change in the supply and demand landscape of the chemical industry, which in turn has stimulated stock prices in the secondary stock market.

In the secondary market, leading stocks such as Shenma, Xin'an, and Jianxin have risen substantially. So what are the investment opportunities for the industry in the future?

Essence Securities stated that under the supply-side reforms in 2016-2017, strong cyclical chemicals started the upward cycle. With the implementation of policies such as strict environmental protection and retreat into the city, the refinement of the industry has been promoted. In the sub-industry with improved supply and demand, Baima’s position is highlighted because of its strong environmental protection and safety base, high market share of production capacity, and strong risk-resisting capital. In the context of product supply-side reforms, normal profitability has risen. This year's capacity expansion will become a company's core competitiveness. In the period of 2013-2017, the capacity of the counter-cyclical capacity expansion will usher in the investment opportunities brought by volume growth in 2018.

At present, there is a new round of environmental protection to strengthen the trend, the Yangtze River Economic Belt pollution control, Inner Mongolia environmental supervision, the park to carry out a series of measures to identify the work, is expected to bring cycle of recovery in the market. Under the support of high crude oil prices, systematic adjustment of domestic demand and seasonal overhaul on the supply side, the profit expectation of the chemical industry is expected to be revised, and companies that have entered a safer, lower-valued region and have performance cashing ability have investment value.