― Among a sample of chemical producers, we view ChemChina, Bluestar, Sinochem International and Wanhua Chemical as being in a leading position in terms of their indicative issuer credit quality, due to their outstanding competitive positions or potential government support.
― In our opinion, Hengli Group and Rongsheng have stronger competitive positions than other privately-owned enterprises (POEs), due to their large-scale refining projects and integration in upstream and downstream sectors. However, they have higher financial leverage.
― We typically view chemicals as a relatively high risk industry, because of its highly competitive and cyclical nature. Most players in the sector are small in scale.