In the recent years, the sales of internal combustion engines, which are the main source of environmental pollution, declined significantly, primarily due to the rising awareness regarding environmental pollution. The pollution caused by automotive had been increasing drastically, since the past few decades, and it is estimated that about 30% of air pollution is primarily due to automotive emission. Sudden increase in automotive pollution considerably impacted the environment, intensifying the threat of air pollution in most of the big cities around the world.

The number of pests in different crops across the world is rising, and there is a tremendous increase in the number of insecticide-resistant pests. Insecticides can be used to control a variety of pests, however, overtime, they loose their effectiveness, as pests develop resistance, a significant decrease in sensitivity to a pesticide, which reduces the field performance of the pesticides. Reliance on insecticide-based pest management of insect pests often leads to the development of insecticide resistance. The United States Environmental Protection Agency (EPA) is working on slowing and combating pests’ resistance to pesticides. These pests have caused enormous loss with regard to many economically important crops and have forced farmers to rely more on the usage of chemicals. Farmers are applying higher quantity of the same insecticides to kill crop pests, which has lead to pesticide resistance in the field. With each application, a few pests survive, who pass on their genes to their offspring. Eventually, the pesticide stops killing pests, leading to crop damage, which leads to demand of more investment in the R&D and new formulations of insecticides in the market. According to an International Survey of 2017, by Issac and McManus, currently, there are 500 cases of pesticide resistance and 200 cases of insecticide resistance, worldwide.

Automotive lightweight materials have been witnessing robust growth during the past couple of years, due to the increasing demand for luxurious, low-on-emission, safe, and high-performance vehicles. As a result, suppliers and manufacturers have introduced various solutions that not only help OEMs meet continually tightening regulations, but also satisfy the widening range of consumer personal taste. TPVs have superior strength, high-temperature mechanical properties, hot oil and solvent resistance, and better compression set than partially-cured material. These materials are blends of elastomers, typically rubbers, including EPDM, EPR, SBS, polybutadiene (BR), or butyl rubber (IIR), dispersed in a relatively small amount of thermoplastic matrix, typically polyethylene or polypropylene. Thermoplastic vulcanizates contain 60-70% EPDM and 30-40% impact polypropylene. Typical TPV applications in the automotive industry include hose coverings, gaskets, seals, convoluted boots, vibration dampeners, air inlet duct covers, bushings, strut covers, ignition components, and window seals. Cost is the biggest advantage, with TPVs being 10-30% lower than EPDM, coupled with lower weight, improved design flexibility, and recyclability. Furthermore, the light weight of TPV enables more fuel-efficient vehicles. Every 10% reduction in vehicle weight is estimated to result in a 5-7% reduction in fuel usage.

In recent years, the demand for hydrogen peroxide in the paper and pulp industry has significantly grown, due to improved paper quality and increased yield of wood mass. In addition, hydrogen peroxide is used in eco-friendly bleach products, in order to remove chlorine compounds through bleaching processes.  In the paper and pulp industry, hydrogen peroxide is primarily used for: Bleaching of wood pulp. Bleaching of cellulose. Recycling of wastepaper (de-inking)  North America, Asia, and Europe together account for most of the world’s paper and pulp production. China had the world’s largest paper and pulp production with 99.3 million metric ton as of 2018, followed by the United States. Other leading pulp and paper producers in the world include Germany, Japan, Finland, and Canada. The global production of paper and pulp is increasing constantly (as shown in the figure), despite at a slow pace. Potential regions, like Asia-Pacific, are witnessing an increase in the volume of paper production, since the demand for packaging has increased recently. This can be attributed to the growing demand for eco-friendly products and increasing sales of newspapers and books, due to growing population in the region.

Based on distribution channel, the high efficiency laundry liquid detergent market is fragmented into online sales channels, supermarket and hypermarket, departmental & convenience stores, and independent grocery stores. The online sales channels refers to sales through e-commerce platforms such as Amazon, Alibaba, eBay, and Groupon. Hypermarket and supermarket shops include Walmart, ASDA, Tesco, Big Bazar, and others. Independent grocery stores comprise small brick and mortar shops.

One of the major applications of high-purity alumina (HPA) is in the production of synthetic sapphire, which is used as a substrate in LED preparation. Production of synthetic sapphire starts with a seed sapphire crystal, a mixture of high purity alumina and un-crystallized sapphire material (crackle), which are heated in a crucible. Currently, sapphire is the most preferred substrate in the LED manufacturing, as it much cheaper than other substrates, such as Silicon Carbide, and Gallium Nitride. Currently, more than 50% of the global HPA production is used in LED manufacturing. However, the increasing demand for LED lighting is expected to further drive the market studied, during the forecast period. LED bulbs offer around 85% more electricity saving in comparison to conventional bulb. It also has an average life span of around 50,000 operating hours, which is 2- 4 times as long as most fluorescent, metal halide, and even sodium vapor lights, and 40 times as long as an average incandescent bulb.

2010 年以来，石油 化工行业整体处于增速下行阶段，石油化工行业 A 股上市公司的整体收 入增速从2010年上半年的71.1%年滑至 2016年上半年的-14.5%。2016年， 海外原油价格触底反弹，叠加国内供给侧改革推动工业品价格反弹，国内 化工产品价格进入上升通道，推动行业盈利恢复增长。2016 年上半年到 2019 年一上半年，石油化工营业收入开始转正，2019 年上半年营业收入 同比增长 12.5%，但随着下游产品价格的下跌，石化板块的净利润出现下 滑，2019 年上半年净利润同比下降 11.1%。目前，石油化工行业 PE(TTM) 为 17.71 倍，低于过去 5 年间的平均水平；行业 PB 为 1.02 倍，接近历史 最低水平，行业整体估值明显偏低。

周期行业景气度在2019 年中逐步下行，部分行业产品价格已接近生产成本，同时市场预期也相对悲观，从估值上看，申万化工行业指数最新PB（2019 年12 月30 日值）仅为1.89，低于历史上95%的时间。展望2020 年，我们认为需求端有望反弹，主要原因：1）中美贸易摩擦逐步缓和；2）房地产投资趋于平稳；3）国内汽车、空调等需求有望回暖。

功能性护肤已经成为了当下化妆品品类布局的风口，而随着消费者美妆消费理 念的加速升级以及相应渠道的快速发展下，预计行业仍未来具快速发展动能。 从本土企业来看，一方面，目前已有不少优质传统品牌通过多品牌布局的方式 切入功能性护肤市场，如上海家化旗下的玉泽，以及珀莱雅前期公告合作的圣 瑰兰品牌等，但相应品牌布局对集团整体占比贡献仍较为有限。而从专业功能 性护肤品牌企业来看，我们认为，华熙生物作为透明质酸原料行业的龙头，建 立了产品与原料的创新和研发体系，形成完整的护肤品研发链，并采用制药的 标准开发一系列具有显著功效，更加安全稳定的护肤品，其具有成长为功能性 化妆品领域龙头的潜质。 

短期看，2020 年房地产竣工面积、基建投资有望回暖，后周期相关产品如涂料、减水剂以及上游的钛白粉、纯碱、PVC 和MDI 等有望迎来需求回暖的向上周期。长期看，各行业集中度对标全球仍处于较低水平，在下游集采模式推广以及环保监管趋严的背景下，看好龙头份额提升。重点推荐三友化工、金石资源、龙蟒佰利、华鲁恒升、万华化学、合盛硅业、苏博特、三棵树。