[Quantitative Investing Mini-科普] Meeting Minutes of Industrial Bank’s Quantitative Investment Seminar: History, Current State, and Future of Quantitative Investing

1.1 History of Overseas Quantitative Equity Investing Let’s begin with quantitative equity investing. When and how did quantitative equity investing originate overseas? Initially, it was not an industry term but rather an academic one. We can broadly agree that quantitative investing began in 1900, with French mathematician Louis Bachelier’s doctoral dissertation titled 'The Theory of Speculation.' This paper essentially addressed how to make forward-looking judgments about prices. If one could perfectly predict today’s price, the decision of when to buy or sell would be trivial—and if such perfect accuracy were possible (though it is not), one would profit without fail. Following 1900, in the 1930s, Columbia Business School professors Benjamin Graham and David Dodd published their seminal book, 'Security Analysis.' What was the context? The 1930s followed the 1929 stock market crash. While Benjamin Graham may not be widely known to all, his most famous student certainly is—Warren Buffett. Their aim in writing this book was to teach investors that stock trading should not be impulsive or arbitrary; instead, decisions should be grounded in rigorous analysis of a company’s fundamentals—determining whether a given stock should be bought or sold based on evidence. From then until 1952, Harry Markowitz developed Modern Portfolio Theory (MPT), for which he received the Nobel Prize in Economics in 1990. For quantitative equity investing, MPT forms the foundational framework—optimizing portfolio construction by balancing risk and return. It is fair to say that approximately 99% of traditional quantitative equity practitioners overseas rely fundamentally on this theory. Moving forward, we are confident that several seasoned professionals in the quantitative investment industry are present here today, and many will be familiar with the Three-Factor Model. Further along, in 1993, Jegadeesh and Titman published their influential work on momentum trading strategies. Over the past several decades, the academic evolution of quantitative investing—especially quantitative equity—has been remarkably clear and progressive. Next, let’s turn to the industry. Below, I list several prominent firms. The largest and most renowned is Barclays Global Investors (BGI), founded in 1964 and acquired by BlackRock in June 2009. In 1971, BGI launched the world’s first index strategy fund; in 1977, it launched the first actively managed quantitative equity strategy fund.

Nitrogen Gas / Nitrogen Fertilizer — Latest Analysis (Middle East Situation)

Key Insight: Current urea prices ($618–$683/ton) remain far below the 2022 peak of $1,009/ton—but have surged 70–80% within just three weeks. Should the Strait of Hormuz remain closed through the spring planting season (April–May), prices may approach the 2022 peak. III. Comparative Analysis of Nitrogen Fertilizer Listed Companies 3.1 Valuation Overview Company Ticker Country Share Price Market Cap P/E Revenue (FY25) EBITDA Margin Dividend Yield Analyst Rating CF Industries CF USA $124.90 $19.2B 13.9x $7.08B ~41% 1.6% Hold Nutrien NTR Canada $76.50 $36.8B 16.0x ~$27.0B ~22% 2.9% Buy Yara International YAR.OL Norway NOK 516 ~$12.0B 10.0x $15.7B ~18% 4.3% Buy OCI Global OCI.AS Netherlands €3.09 €652M N/M $1.09B ~8% N/A Hold (in liquidation) LSB Industries LXU USA $14.77 ~$1.1B ~45x $615M ~26% 0% Hold Mosaic MOS USA $23.65 $7.5B 7–16x $12.1B ~20% 2.8% Mixed Grupa Azoty ATT.WA Poland PLN 18.74 ~$450M N/M $3.4B Low N/A Hold SABIC Agri-Nutrients 2020.SR Saudi Arabia SAR 116.60 ~$6.2B ~14x ~$2.5B ~35% 5%+ Buy China BlueChem 3983.HK China HKD 3.32 ~$2.0B ~8x ~$1.5B ~20% 5%+ Strong Buy Hubei Yihua 000422.SZ China CNY 13–19 ~$2.0B ~30x ~$2.4B ~10% ~1% Hold 3.2 Key Private/National Players Company Country Capacity Current Status (as of March 2026) QAFCO (Qatar Fertiliser Company) Qatar 5.6M tons urea + 3.8M tons ammonia/year ⚠️ Fully shut down — Hormuz Strait closure + LNG facility attacks IFFCO India 4.24M tons urea/year Operational, but Middle East imports disrupted SKW Piesteritz Germany ~1.2M tons ammonia/year Under severe pressure from high gas prices; Germany’s largest ammonia/urea producer Borealis/OMV Austria ~2.0M tons fertilizers/year Reducing output due to elevated TTF gas prices Achema Lithuania ~2.0M tons fertilizers/year Baltic region’s largest producer; impacted by EU gas prices Togliattiazot Russia ~3.0M tons ammonia/year Constructing Taman export terminal; constrained by sanctions

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