Orient Securities Company Limited (600958.SH) released a fundamental chemical industry research report on June 14, 2026, suggesting that prospects for peace in the Middle East situation present a window for positioning within the chemical sector.

The report notes that both the US and Iran have shown restraint regarding conflict, leading to increased market expectations for passage through the Strait of Hormuz. The fundamentals and valuations of the chemical industry are nearing a bottom.

Key Investment Focus Areas

Orient Securities recommends focusing on sub-sectors and individual stocks with favorable second-quarter earnings expectations, as strong performance can support valuations and maintain an advantageous position during industry fluctuations.

A specific opportunity highlighted is the potential recovery in profit expectations for the phosphorus chemical sector. A positive signal was released with a cargo ship carrying 50,000 tons of sulfur successfully passing through the Strait of Hormuz, bound for a port in southern China, which is expected to improve profit outlooks for this segment.

Recommended Sectors and Companies

The firm is optimistic about the recovery opportunities across various chemical sub-sectors. Its recommendations include the MDI leader Wanhua Chemical (600309.SH), companies related to the PVC industry, leading enterprises in the refining and chemical sector, and agricultural chemical industry chain leaders oriented towards technical services.

Potential Risks

Concurrently, the report cautions about risks including demand falling short of expectations, policy uncertainty, and significant volatility in oil prices.