Strategic Layout of Guangzhou Tinci Materials: Opportunities Arise Amid Continued Decline in Chemical Sector

The chemical sector experienced fluctuations and declines today (October 22), with the Chemical ETF (516020) once dropping over 1% before slightly recovering, showing a decrease of 0.55% at the time of writing.

In terms of constituent stocks, sectors such as fluorine chemicals, lithium batteries, civil explosives, and potash fertilizer saw significant declines. Notably, both Guangzhou Tinci Materials 天賜材料 and Multi-Florid fell more than 4%, while Guangdong Hongda dropped over 3%. Companies like YK International, Xiamen Sunkwong, and Titanium Energy Chemical saw declines exceeding 1%, dragging down the sector's performance.

Regarding company news, Guangzhou Tinci Materials 天賜材料 announced on an interactive platform on October 21 that the company has leveraged its strong technological foundation and integration in the field of lithium-ion battery electrolytes and materials. It has completed the technical preparation for sodium-ion battery electrolytes and has also developed key materials such as sodium hexafluorophosphate (NaPF6) and NaFSI.

Analysts have highlighted that Guangzhou Tinci Materials 天賜材料 has established a strategic extension into sodium-ion battery technology, utilizing its integrated advantages in lithium battery electrolytes. This proactive positioning creates a first-mover advantage, potentially opening new growth avenues for future performance and demonstrating the company's robust technical adaptability and market insight.

From a valuation standpoint, data shows that as of the market close on October 21, the chemical ETF (516020) had a price-to-book ratio of 2.24, which is among the lower 36.99% percentile over the past decade, reflecting the cost-effectiveness of mid-to-long-term allocations.

Looking ahead, Zhongyuan Securities suggests that with the rollout and advancement of steady growth measures for the chemical industry, the overall supply-demand dynamics could improve, facilitating further quality improvements in the sector. In October 2025, they recommend focusing on the pesticide, polyester filament, coal chemical, phosphate fertilizer, and potash industries.

Donghai Securities points out that supply-side structural optimization is anticipated. They recommend focusing on resilient and advantageous sectors. Domestically, national policies frequently mention the need for supply-side regulations to avoid "internal competition"; internationally, rising raw material costs and shocks to Asian capacities have led to shutdowns and capacity exits for many Western chemical firms. In the short term, repeated geopolitical tensions add uncertainty to overseas chemical supplies; however, the long-term competitive advantage of China’s chemical industry is evident, with significant cost advantages and continuous technological breakthroughs allowing Chinese chemical companies to fill gaps in the international supply chain, likely reshaping the chemical industry's landscape.

How can investors capitalize on the rebound opportunities in the chemical sector? Utilizing the Chemical ETF (516020) may offer greater efficiency. Public information indicates that the Chemical ETF (516020) tracks the CSI Sub-Industry Chemical Index, covering various subsectors. Nearly half of its holdings are concentrated in leading large-cap stocks, including Wanhua Chemical and Salt Lake Co., providing the opportunity to share in strong investment returns. The remaining half is diversified across industry leaders in phosphate fertilizers, fluorine chemicals, nitrogen fertilizers, and other subsectors. Out-of-market investors can also consider using the Chemical ETF connecting funds (Class A: 012537/Class C: 012538) to allocate to the chemical sector.

Data sources: Shanghai and Shenzhen Stock Exchange, as of October 22, 2025. Risk Warning: The Chemical ETF passively tracks the CSI Sub-Industry Chemical Index, effective from December 31, 2004, and published on April 11, 2012, with constituent stock composition adjusted according to index construction rules. Historical performance does not predict future results. This article's mention of indices and constituent stocks is purely for illustration, and descriptions of individual stocks should not be construed as investment recommendations. The risk level for the fund as assessed by the fund manager is R3 - medium risk, suited for investors rated C3 (balanced) and above. Any information contained herein is for reference only, and investors must take responsibility for their independent investment decisions. Furthermore, any opinions, analyses, or forecasts presented herein do not constitute investment advice and the author is not responsible for any direct or indirect losses resulting from the use of this content. Fund investments carry risks, and past performance is not indicative of future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund, and investors should proceed with caution.