Zhejiang NHU (002001 CH) Hold: Read across from Adisseo’s methionine plan

Research evidence excerpt

Zhejiang NHU (002001 CH) Hold: Read across from Adisseo’s methionine plan

al conflicts coupled with a lack of meaningful new 42.00

capacity additions in 2H26, are expected to keep the market tight through 2026.

Although we expect the supply/demand outlook to soften as new capacity comes 30.00

online in 2027, Adisseo believes orderly capacity ramp-ups and ongoing demand 18.00

06/25 12/25 06/26

growth will help absorb incremental supply going forward. Target price: 34.70 High: 39.30 Low: 21.23 Current: 29.75

Cost optimisation strategy amid industry expansion. While management did not Source: LSEG IBES, HSBC Qianhai Securities estimates

comment on the visibility of competing new methionine projects, it believes its

Quanzhou methionine operations will remain globally competitive in both technology Yi Ru* (Reg. No. S1700520120001)

Head, A-share Petrochem & New Materials Research

and cost to maintain competitiveness amid future capacity additions. HSBC Qianhai Securities Limited

yi.ru@hsbcqh.com.cn

Implication for NHU 2Q26 earnings. We expect NHU’s 2Q26 results to beat +86 21 5066 2008

expectations, with estimated cRMB4.5bn, supported by record-high methionine

spreads in 2Q26. Adisseo said overseas sales are largely priced using long-term * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

contracts, creating a lag between movements in the spot price and earnings, indicating not registered/ qualified pursuant to FINRA regulations.

that strong earnings momentum could extend into 3Q26 for NHU.

Maintain Hold rating and TP of RMB34.70: We continue to use a PB-ROE approach

to value the stock. Based on a target PB multiple of 2.3x and 2027-28e average BVPS of

RMB14.82, we arrive at a TP of RMB34.70 (all unchanged). Our TP implies c17%

upside from current levels.