Which stocks are worth holding for the long term? Issue #35

Brokerage sector rallies typically occur in waves, with generally lackluster performance during other periods—directly tied to funding availability and trading volume. Staggered (i.e., phased) execution of trades helps stabilize emotions; reflect on whether you frequently make trading mistakes—staggered execution is one effective way to mitigate such errors. Continuing our Long-Term Stock Watchlist series... Xin'an Chemical Industry Co., Ltd. What stands out most about this company is its glyphosate business. Glyphosate—the world’s largest-volume pesticide—is a commodity with rigid global demand, experiencing cyclical price hikes every 1–2 years. Its stock price can surge dramatically: in 2021, it rose from RMB 5 to RMB 32 within six months. China’s annual glyphosate production capacity totals ~810,000 tons—about 67% of global capacity—and new capacity additions have been explicitly classified as “restricted” under China’s Industrial Structure Adjustment Guidance Catalogue, making approval for new domestic projects extremely difficult. Globally, the top five producers (CR5) account for ~75% of total capacity, indicating a highly concentrated, oligopolistic industry structure with stable dynamics. Xin’an’s annual glyphosate capacity is 80,000 tons—10% of China’s total—ranking third domestically, behind Xingfa and Fuhua. Its integrated production cost is 10–15% lower than peers’, granting it superior resilience at cycle troughs and the highest upside leverage during upcycles. The company’s second major business is organosilicon. The current organosilicon expansion cycle has concluded. Dow Chemical announced it will shut down its 145,000-ton-per-year base siloxane facility by mid-2026; post-shutdown, European supply will shrink by nearly one-third. Organosilicon prices have already risen 30% over the past six months. Domestically, the organosilicon industry features a clear “one dominant leader, multiple strong players” structure. Hoshine Silicon Industry is the undisputed leader, with 1.35–1.73 million tons/year of silicone monomer capacity and a 25.51%–27% domestic market share—topping both industrial silicon and organosilicon segments. Xin’an ranks roughly in the middle of the second tier. Chemical stocks like this are generally best monitored starting at industry cycle lows; once pricing momentum emerges, caution is warranted as the cycle approaches its peak. Over the past decade, the stock’s price has traded within a range of RMB 10–15, with its latest price at RMB 15 and a market cap of RMB 20 billion. Such stocks are typically unsuitable for long-term holding; however, they may be opportunistically traded at relatively low valuations—refer to prior guidance on trend-following strategies. Kelun Pharmaceutical Co., Ltd. The company has held a stable ~40% market share in China’s large-volume infusion market for 20 consecutive years—the industry leader. In 2025, infusion revenue totaled ~RMB 11 billion, gross profit ~RMB 3.5 billion, consistently generating RMB 1.5–2 billion in annual free cash flow—this constitutes the company’s first core pillar. Kelun’s second core pillar is its controlling stake in Chuanneng Biotech (a ChiNext-listed company), the world’s leading producer of penicillin intermediates, commanding ~50% global market share. Chuanneng’s base in Yili, Xinjiang—leveraging low-cost natural gas, corn, water resources, and minimal environmental compliance costs—operates at ~30% lower costs than inland peers. Kelun’s third major business is Kelun-Botai, the core vehicle driving Kelun’s innovation-driven transformation. As an ADC (antibody-drug conjugate) leader, Kelun-Botai has entered its commercialization and revenue realization phase: four products (covering eight indications) have received marketing approval in China, three of which (covering five indications) have been included in the 2025 National Medical Insurance Catalogue.

Dow Chemical’s Q3 2025 Earnings Report (October 27, 2025)

The stock price had languished for a full year—dropping two tiers—before surging 13% following the Q3 2025 earnings release. Has there been any fundamental change? ・ First, revenue was weak: the Q2 guidance for this quarter stood at $10.2 billion. ・ Second, GAAP EPS turned positive only due to two non-recurring items; operating profit failed to cover interest expenses. ・ On the positive side, the loss was narrower than expected—the company’s cost-cutting and capital expenditure reduction initiatives have delivered tangible results. Has the chemical industry reached a downward inflection point? ・ On the supply side, Dow believes capacity restraint is now underway across regions—including China: “We’ve got speculation on the closures of about 13 million metric tons—from additional capacity in Asia, Japan and Korea to the tune of about 5 million tons and China from the [anti-evolution] policies to the tune of about 7 million tons.” ・ On the demand side, Dow views overall demand as still weak—with no change from last quarter—and hopes rate cuts will stimulate construction starts.

Dow Inc. Stock 12-Month Price Target Raised to $35.5, Implies 12% Upside

4 days ago

Analysts have raised Dow Inc.'s 12-month price target to $35.5, indicating a 12% potential upside despite maintaining a consensus Hold rating across 24 covering analysts.

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