The chemical sector launched a strong rally today (August 29), with the Chemical ETF (516020), which reflects the overall trend of the chemical sector, rising steadily after opening. As of publication, the intraday price gained 2.08%.
In terms of constituent stocks, some individual stocks in synthetic resin, fluorochemical, and potash fertilizer sectors led the gains. As of publication, Sunresin New Materials Co.,Ltd. and Zhejiang Juhua Co.,Ltd. both surged over 7%, Tibet Summit Resources rose over 6%, Tongkun Group and Capchem both gained over 5%, while Sanmei Chemical, Aspect Agro and Enjie Co. among other stocks rose over 4%.
China Galaxy Securities pointed out that on the supply side, capital expenditure and capacity under construction growth in the chemical industry have slowed in recent years, but existing capacity and capacity under construction are expected to still need time to digest. On the demand side, as policy stimulus effects gradually emerge in the second half of the year and terminal industry recovery momentum progressively strengthens, domestic demand potential is expected to be fully released. The firm is optimistic about structural opportunities in chemical products and industry valuation recovery space in the second half of the year.
From a valuation perspective, Wind data shows that as of the close of the previous trading day (August 28), the price-to-book ratio of the target index for Chemical ETF (516020) - the CSI Segmented Chemical Index - was 2.11 times, positioned at the 29.22% percentile over the past 10 years, highlighting attractive medium to long-term allocation value.
Looking ahead, Zhongyuan Securities pointed out that with the further deepening of anti-involution measures in the chemical industry, the situation of repeated capacity construction and disorderly excessive competition in some chemical sub-sectors is expected to ease, ushering in a cyclical improvement in prosperity. The firm recommends continued focus on pesticides, organic silicon, and polyester filament sectors.
Orient Securities noted that as interpretations of "anti-involution" policies from various parties become increasingly rich, market understanding of these policies continues to deepen. The firm believes that "anti-involution" policies for chemicals are not simply about "capacity reduction," but rather about eliminating involution caused by unfair competition through standardizing policies, markets, and corporate operations. As one of the most important guiding policies for manufacturing currently, "anti-involution" policies will see action across all sub-sectors, with more targeted industry pain-point policies expected to be continuously introduced, leading the currently struggling chemical industry out of the prosperity trough.
How to capture the chemical sector rebound opportunity? Leveraging Chemical ETF (516020) may offer higher efficiency. Public information shows that Chemical ETF (516020) tracks the CSI Segmented Chemical Industry Theme Index, comprehensively covering various chemical sub-sectors. Nearly 50% of positions are concentrated in large-cap leading stocks, including Wanhua Chemical and Salt Lake Co., sharing in strong-get-stronger investment opportunities; the remaining 50% of positions also strategically allocate to leading stocks in phosphate fertilizer and phosphochemical, fluorochemical, nitrogen fertilizer and other subdivided sectors, comprehensively capturing chemical sector investment opportunities. Off-market investors can also access the chemical sector through Chemical ETF Feeder Funds (Class A 012537/Class C 012538).
Images and data sources: Shanghai and Shenzhen Exchanges, etc., as of August 29, 2025. Risk Warning: Chemical ETF passively tracks the CSI Segmented Chemical Industry Theme Index. The index base date is December 31, 2004, with a publication date of April 11, 2012. Index constituent stock composition is adjusted timely according to the index compilation rules. Data shows that the Segmented Chemical Index returns for the past 5 complete years were: 2020: 51.68%; 2021: 15.72%; 2022: -26.89%; 2023: -23.17%; 2024: -3.83%. Target index constituent stock composition is adjusted timely according to index compilation rules, and backtested historical performance does not predict future index performance. Index constituent stocks mentioned in the text are for display purposes only. Individual stock descriptions do not constitute any form of investment advice, nor do they represent holding information or trading activities of any fund under the management company. The fund manager assesses this fund's risk level as R3-Medium Risk, suitable for appropriateness rating C3 (Balanced) and above investors. Any information appearing in this text (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors must take responsibility for any autonomous investment decisions. Additionally, any views, analyses, and forecasts in this text do not constitute investment advice in any form for readers, nor do they assume any responsibility for direct or indirect losses arising from the use of this content. Fund investment carries risks. Past performance of funds does not represent future performance. Performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Fund investment requires caution.
MACD golden cross signal formed, these stocks show good upward momentum!
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