Berun Chemical (000683 CH) Initiate at Buy: The leader in an industry about to turn

Research evidence excerpt

Berun Chemical (000683 CH) Initiate at Buy: The leader in an industry about to turn

Equities ● Chemicals

11 June 2026

Share price catalysts

◆ Strong soda ash spot price rally — Sustained price increases could directly boost

profitability.

◆ Prolonged Middle East tensions keep overseas gas prices high — Geopolitical

tensions may keep overseas natural gas prices elevated, widening China’s cost advantage

over international producers.

◆ Continued export growth — Monthly export volumes and export prices rise significantly

due to domestic cost advantages, supporting overseas revenue and margins.

◆ Supply-side tightening policies in the soda ash industry — New policies restricting

supply help accelerate domestic capacity rationalisation and improve industry profitability.

◆ Overseas photovoltaic installations exceed expectations — Higher-than-expected PV

(photovoltaic) installations drive photovoltaic glass demand, boosting soda ash consumption.

◆ Berun maintains a strong dividend policy — It provides defensive support under market

volatility, enhancing investor confidence.

Downside risks

◆ Erosion of cost advantage from falling raw material prices — Declines in coal and natural

gas prices for traditional soda ash producers could narrow the company’s cost advantage,

potentially keeping product prices at prolonged lower-cycle levels than our estimates.

◆ Demand risk on prolonged geopolitical conflict — Continued geopolitical tensions may

restrain macro demand, creating stagflation pressures.

◆ Tariff protection risk — As China’s share of global soda ash trade rises, excessive

exports may draw regulatory scrutiny from key importing regions and constrain China’s

export volumes and weigh on realised prices.

Exhibit 33. Global soda ash comparable companies’ valuation

ADV Mkt