UBS published a research report stating that SHANGHAI PECHEM (00338) recorded a 9% year-on-year decline in revenue for the first half of the year, with a net loss of RMB 462 million, which was in line with the company's earlier profit warning. The second quarter net loss expanded to RMB 372 million, primarily due to asset impairment losses of RMB 417 million. The report cited the company's indication that it will continue advancing carbon fiber capacity construction in the second half of the year. UBS believes that as the mainland refining and chemical industry progresses with anti-involution measures, the operating environment for the petrochemical sector will see improvement. The firm lowered the group's 2024 profit forecast to RMB 21 million and reduced its 2026-27 profit forecasts by 2% to 18%. The target price was lowered from HK$1.93 to HK$1.89, while maintaining a "Buy" rating.