Recent indicators suggest that the Federal Reserve's years-long balance sheet reduction plan is nearing a turning point, with a new round of quantitative easing expected to significantly impact the macroeconomy. Consequently, the investment style and preferences of active funds in the global capital markets are likely to change in tandem. Historically, when the Fed initiates a rate-cutting cycle, global manufacturing tends to recover, leading to increased physical consumption. As a result, demand for black products, represented by coal, and midstream raw materials, exemplified by chemicals, is likely to see positive growth. Against this backdrop, thriving and globally competitive CHINA RISUN GP (01907), particularly in the fine chemicals and coke sectors, stands out as a noteworthy potential investment.

In the coke sector, which has traditionally been a stronghold for the company, CHINA RISUN GP has actively leveraged various strategies to enhance its long-term competitiveness while the domestic demand for coke remained sluggish in previous years, gradually building momentum for the upcoming industry cycle. On one hand, the company has aggressively developed its operational management service model, achieving high-quality scale expansion through a light-asset approach. Drawing from its deep industry expertise, CHINA RISUN has refined, integrated, and accumulated experience and technology in the coke sector, creating a replicable operational management service that empowers the entire industry. In the first half of this year, CHINA RISUN expanded its management projects by an additional 2.6 million tons per year in Shanxi and Jilin, now operating a total of eight projects with an overall capacity of 7 million tons for coke and 660,000 tons for chemicals, achieving a business volume of 4.5 million tons. The revenue from its operational management services in the first half of 2025 reached 5.095 billion yuan, marking a year-on-year increase of 2.01%.

On the other hand, CHINA RISUN continues to accelerate the domestic and international dual-cycle development of its coke business. Since establishing its first overseas production park in Sulawesi, Indonesia, in 2021, CHINA RISUN has set up offices in Australia, Japan, Vietnam, Singapore, and India, expanding its global supply chain system and creating an international strategic layout centered around Indonesia's Weishan, radiating to the global coking industry. Currently, the Sulawesi park has a total capacity of 3.2 million tons per year, with coke sales of 2.22 million tons in 2024 covering 51 customers across 17 countries, including markets in Europe and Southeast Asia. Last year's overall revenue reached $730 million, with a net profit of $15 million, ROE at 5.7%, and ROA at 1.4%.

Having accumulated both internal and external momentum during the recent industry adjustment period, CHINA RISUN GP now has the potential to exhibit stronger elasticity during the industry's stabilization and recovery phase. Combining insights from the broader market, it appears that the investment value of cyclical sectors is at a pivotal moment for reassessment. Macro-level high-frequency data shows that the year-on-year decline in domestic PPI narrowed in September, remaining flat month-on-month. Among domestically priced commodities, coal has shown initial signs of price improvement, benefiting from effective capacity governance and optimized market competition. For instance, in the coke market, expectations for inventory replenishment were triggered before the holiday, along with strong demand support from high pig iron prices and rising coking coal prices. As a result, coke companies initiated the first price hike in late September, with increases of 50-75 yuan per ton.

Recent market news indicates that some coke companies have issued letters to commence a new round of price increases. The market generally anticipates one or two more price hikes, and with improved coking profits, coke supply is likely to remain relatively ample. On the demand side, considering the overarching "anti-involution" initiative driven from the top down in China, which has a higher position, broader coverage, and stronger coordination, the long-term effects may exceed expectations. This "anti-involution" will likely lead to a significant recovery in domestic demand, with anticipated improvements cascading to midstream and upstream sectors, ultimately reflecting in corporate financial statements. Consequently, CHINA RISUN GP's performance inflection point could arrive sooner than expected.

Moreover, there is optimism surrounding the potential introduction of structural and industry-specific increment policies in light of recent high-level meetings, along with policy-driven financial tools, which is expected to positively impact cyclical sectors. However, it is somewhat regrettable that, when considering the stock performance of leading companies in niche sectors such as CHINA RISUN GP, market participants have not fully priced in these potential benefits. Looking further ahead, as the Fed is likely to restart its rate-cutting cycle, the impending new round of global monetary easing holds significant importance for meaningful improvement and stimulation of effective demand. In this overarching context, the outlook for cyclical industries such as coke, coking, and chemicals is expected to continue recovering, warranting further attention to their investment value.

Reflecting on CHINA RISUN GP's performance, in the first six months of this year, the company achieved record volumes in both its coke and new chemical materials businesses, demonstrating high-quality scale expansion that validates its successful transition toward a service-oriented manufacturing model. This also highlights the ongoing depth of its globalization strategy. In this light, CHINA RISUN GP can be viewed as having undergone comprehensive evolution. Moving forward, with the onset of the Federal Reserve's rate-cutting cycle, the rollout of additional domestic increment policies, and the profound advancement of the "anti-involution" strategy, the fundamentals of related companies are set to improve. Consequently, there is a possibility that the capital market's stylistic shift may occur in parallel, making stable, growth-oriented leading companies like CHINA RISUN GP prime candidates for experiencing a "reversal of the investment clock."