Tianfeng Securities: Real Subsidy Pushes Improvements in Wind Power Equipment and Agricultural Chemical Products Industries

Sources from Jinrong APP have learned that Tianfeng Securities has released a research report stating that this round of anti-roller logic and supply-side reform are different, with this round focusing on cost investigation and price monitoring, regulating enterprises' low-price disorderly competition. After the expectation phase is over, the anti-roller trend will evolve into pricing some industries' cyclical clearing, performance stabilization, and continuous verification. The trend will shift from "expected anti-roller" (game-changing reversal) to "real anti-roller" (actual pricing improvement). Agricultural chemical products and wind power equipment may be examples of such real anti-roller.

Two industries that may improve their structures, one is wind power equipment, the other is agricultural chemical products:

From the structure of wind power equipment can be seen:

1) Operating cash flow and capital expenditures: In 2023-2024, companies with decreasing CAPEX (TTM) will continue to increase, cash flow improves, and the proportion of companies with negative operating cash flow (TTM) decreases, corresponding to clearing progress. After Q1 2025, capital expenditures show an upward trend again, the proportion of companies with decreasing CAPEX (TTM) decreases, and the right side of clearing appears.

2) Gross margin and total capital expenditures: In 2022-2023, the industry's CAPEX (TTM) decreased to negative growth rates, gross margins (TTM) decreased for companies occupying a high proportion, corresponding to deeper clearing. "Start making money". From Q1 2023 to Q1 2025, the industry's profitability improves, and the proportion of companies with decreasing gross margins (TTM) decreases, corresponding to clearing progress.

3) Inventory and revenue: From Q1 2025 to present, revenue (TTM) remains positive, inventory liquidation progresses.

From the structure of agricultural chemical products can be seen:

1) The background of the previous peak is a dynamic accumulation of agricultural chemicals in 21 years, prices are high, and profit improves. Revenue increases for pesticide companies.

2) From H2 2022 to Q3 2023, the industry continued to accumulate inventory, with supply exceeding demand; from Q4 2023 to present, the industry is clearing out inventory.

3) The periodic reversal logic visible in consecutive financial reports is a quarterly-level logic, which needs to be distinguished from the cycle-level logic of anti-roller expectations.

The structure chart of the agricultural chemical products looks complex but is actually just a combination of traditional indicators such as capital expenditures (capacity), gross margin (supply and demand), and inventory.

From a methodological perspective, different types of cyclical industries require different key indicators to focus on. Tianfeng Securities believes that sales-type cyclical stocks are more focused on CAPEX and enterprise capacity clearing, while price-type cyclical stocks follow the logic: "inventory liquidation determines small-scale market trends, enterprise capacity clearing + demand side determines large-scale market trends", and inventory cycles tend to be shorter than capital expenditures cycles, with greater volatility.