In-depth Analysis of 2024 Financial Reports of Global Chemical Industry Giants: Deepening Divergence and Transformational Growing Pains

I. Overall Industry Performance: Oil & Gas Majors Under Pressure, Specialty Chemicals Defy Trends with Growth In 2024, the global chemical industry exhibited pronounced divergence amid a complex and volatile market environment. Total industry revenue reached USD 4.8 trillion; however, international chemical giants’ performance diverged markedly due to two concurrent headwinds: a sharp 18% year-on-year decline in Brent crude oil’s average price—to USD 78.3 per barrel—and weak demand. Traditional oil & gas majors faced significant pressure and posted notable profit declines, whereas specialty chemicals achieved counter-cyclical growth driven by innovation—emerging as a bright spot across the sector. (A) Oil & Gas Majors: Profit Declines and Accelerated Transformation Within the traditional oil & gas segment, the combined adjusted net profit of the world’s five largest oil majors fell 17% year-on-year to USD 102.3 billion. This decline reflects mounting challenges confronting legacy oil & gas operations amid accelerating global energy transition. Specifically: • ExxonMobil reported adjusted net income of USD 33.68 billion, down 6.5% year-on-year. Nevertheless, the company enhanced its product mix, raising the share of high-value products to 68%, demonstrating strategic agility in responding to market shifts. • Shell’s net profit stood at USD 23.72 billion, down 16% year-on-year. Yet Shell allocated 23% of its total investment to renewable energy—evidence of proactive low-carbon transition. • TotalEnergies recorded net profit of USD 18.3 billion, down 21% year-on-year; however, its installed low-carbon power generation capacity surpassed 20 gigawatts—laying a solid foundation for sustainable future growth. • BP’s net profit amounted to USD 8.915 billion, plunging 35.6% year-on-year; still, over 30% of its investment went toward new-energy businesses, underscoring its determined transformation. • Chevron’s net profit totaled USD 17.661 billion, down 17.35% year-on-year. Through portfolio optimization, it generated USD 3.8 billion in free cash flow—providing financial flexibility for future strategic adjustments. Additionally, TotalEnergies’ operating cash flow stood at USD 29.9 billion, down 17% year-on-year—a figure further confirming the cash-flow pressure induced by heavy transition-related investments. (B) Specialty Chemicals: Innovation-Driven Growth Meanwhile, the specialty chemicals segment demonstrated robust growth momentum in 2024. Profit margins across this segment rose broadly by 1.5–3 percentage points; niche markets—including AI chip materials and bio-based chemicals—grew more than eight times faster than the industry average. This trend signals that, propelled by rapid global technological advancement and heightened sustainability awareness, specialty chemicals are emerging as a new engine for the broader chemical industry. • DuPont’s Electronics & Industrial segment sales rose 11%, with demand for AI chip materials alone contributing USD 320 million in incremental revenue. • AkzoNobel’s coatings sales in China grew 8%, while its powder coatings business achieved a record-breaking profit margin of 19%. • 3M’s adjusted earnings per share reached USD 7.30, up 21% year-on-year; its Safety & Industrial segment generated USD 4.9 billion in free cash flow. These figures collectively underscore how specialty chemical firms—through continuous innovation and optimized product portfolios—successfully seized market opportunities and delivered counter-cyclical performance growth.

Minimalist Investment Research: The First 10-Bagger Stock of 2024—Zhengdan Co., Ltd.

As the global leader in TMA (trimellitic anhydride) production, the company commands an annual TMA capacity of 85,000 tonnes—dominating the industry. In early February 2024, the company’s share price hit a low of RMB 2.41; by June of the same year, it peaked at RMB 36.25—the highest level ever—representing a maximum gain of 1,400%. Zhengdan thus became the first 10-bagger stock of 2024. II. Investment Thesis Behind Zhengdan Co., Ltd. The direct catalyst behind Zhengdan’s tenfold surge was the announcement by global giant INEOS of the permanent shutdown of its TMA production line—triggering severe supply shortages in the market. Consequently, TMA prices soared from a year-start low of RMB 16,000 per tonne to over RMB 40,000 per tonne recently. For Zhengdan—which specializes in TMA production—this development constituted a major tailwind. Its Q3 2024 financial report revealed revenue growth of 130% year-on-year and net profit growth of 2,949% year-on-year. Such extraordinary windfall profits dramatically boosted Zhengdan’s earnings—inevitably drawing attention from peers. Notably, Changqing Technology (Stock Code: 603125), located merely three kilometers away from Zhengdan, announced on May 16, 2024, plans to invest approximately RMB 10 billion in building a high-performance polymer new-materials production base. By comparison, Zhengdan’s current fixed assets amount to only RMB 700 million—a stark contrast underscoring the scale of this competitive response. Clearly, the recent TMA price surge is unsustainable; as new entrants flood into the market, prices will inevitably revert to normal levels. To be frank, I have little expertise in chemical enterprises—the intimidating array of technical jargon gives me chills. Even years ago, when Wanhua Chemical was right before my eyes, I felt flustered and utterly lost—and elegantly missed the opportunity.

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