Geopolitical conflicts ignite a major cycle in agriculture and chemicals! Fertilizers lead the rally, and Huabao Fund's Chemical ETF (516020) surged over 1% intraday! Nearly 10 billion yuan of main capital inflows.

The chemical sector continued its strong performance today (March 27). The Hua Bao Chemical ETF (516020), which reflects the overall trend of the chemical sector, quickly surged after the market opened, with an intra-day price increase reaching a maximum of 1.31%, and then continued to fluctuate in the red, rising 0.88% as of the time of publication.

In terms of constituent stocks, some individual stocks in the potassium fertilizer, phosphorus fertilizer, and soda ash sectors showed significant gains. As of the time of publication, Yaqi International surged over 4%, while Guangdong Hongda and Salt Lake Company both rose over 3%. Many stocks, including Hualu Hengsheng, Hebang Biotechnology, and Tongcheng New Materials, rose over 2%.

On the funding side, the basic chemical sector continues to attract significant capital inflows. According to Wind data, by the close, the basic chemical sector saw a net inflow of nearly 9.6 billion yuan from main funds in a single day, ranking first among the 30 Citic primary sectors; in the past five days, the cumulative inflow into the basic chemical sector exceeded 30 billion yuan, with net inflows also ranking first among the 30 Citic primary sectors.

In terms of news, the recent geopolitical situation has led to tighter international energy and chemical raw material supplies, combined with a concentrated release of domestic spring plowing fertilizer demand, which has jointly driven the agricultural chemical industry chain’s prosperity upward. The National Development and Reform Commission issued a notice requiring the stabilization of fertilizer supply and prices for spring plowing to ensure raw material supply. Meanwhile, prices for major pesticide varieties such as glyphosate and glufosinate have risen, leading to a tense market supply situation.

Huaxin Securities pointed out that rising oil prices and geopolitical conflicts directly result in rising food prices, and historically, the period of 1-2 years following a rise in food prices tends to be a major cycle for agricultural chemicals. This will likely lead to an expansion of the price gap between domestic and foreign fertilizers and increased demand for pesticides. The expansion of fertilizer price differentials will primarily benefit phosphorus chemical and potassium fertilizer sectors.

Looking ahead, Founder Securities noted that based on the rhythm of price increases this year, cyclical price trading has begun to become active, with the price increase chain likely experiencing market diffusion at least at a short-term monthly level, suggesting that attention should be paid to the direction of basic chemicals and other cyclical sectors. The larger policy background for the chemical sector is “anti-involution,” while on the industry side, there is structural high growth in emerging demand and factors such as domestic capital expenditure contraction and European capacity exit on the supply side, thus prosperity verification is expected to gradually arrive.

How to seize opportunities in the chemical sector? Investing in Hua Bao Chemical ETF (516020) may offer higher efficiency. Public data shows that the Hua Bao Chemical ETF (516020) tracks the CSI Sub-Industry Chemical Theme Index, with the combined weight of the oil, petrochemical, and basic chemical sectors exceeding 80%. Off-exchange investors can also invest in the chemical sector through the Hua Bao Chemical ETF Connection Fund (Class A 012537/Class C 012538).

Source: Shanghai and Shenzhen Stock Exchanges, etc. as of March 27, 2026.

Note: When investors subscribe or redeem fund shares, the subscription and redemption agent brokers may charge a commission of no more than 0.5%, which includes relevant fees charged by the securities exchange, registration agency, etc. The chemical ETF does not charge a sales service fee.

The subscription fee rate for Chemical ETF Connection A is: below 1 million yuan, 1%; 1 million (inclusive) - 2 million, 0.6%; above 2 million (inclusive), 1,000 yuan per transaction. The redemption fee rate is: within 7 days, 1.5%; 7 days (inclusive) - 180 days, 0.5%; 180 days (inclusive) and above, 0%.

The redemption fee rate for Chemical ETF Connection C is within 7 days, 1.5%; 7 days (inclusive) and above, 0%. The sales service fee rate is 0.2%.

Note: Wind data shows that based on the Shenwan primary industry classification, as of February 27, 2026, the weights of the basic chemical and oil and petrochemical industries in the CSI Sub-Industry Chemical Index are 71.57% and 11.7%, respectively.

Risk Warning: The Hua Bao Chemical ETF passively tracks the CSI Sub-Industry Chemical Theme Index, which has a base date of December 31, 2004, and was published on April 11, 2012. The composition of index constituent stocks is adjusted in accordance with the index compilation rules, and past historical performance does not indicate future performance of the index. The individual stocks mentioned in the text are listed as objective representations of index constituents and do not constitute any individual stock recommendations, nor do they represent the direction of the fund manager and fund investments. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for any self-determined investment actions. Furthermore, any views, analyses, and predictions in this article do not constitute any form of investment advice to the reader, nor does it bear any responsibility for any direct or indirect losses arising from the use of this content. Investors should carefully read the “Fund Contract,” “Prospectus,” “Fund Product Summary,” and other legal documents to understand the risk-return characteristics of the fund and choose products that match their risk tolerance. Past performance of the fund does not indicate future performance, and the performance of other funds managed by the fund manager does not guarantee the fund’s performance. According to the fund manager’s assessment, the risk level of Hua Bao Chemical ETF is rated R3 - medium risk, suitable for balanced (C3) investors and above, with suitability matching opinions to be determined by the sales institution. Sales institutions (including direct sales institutions of the fund manager and other sales institutions) evaluate the risks of the above funds according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager, and the suitability opinions of various sales institutions may not necessarily be consistent, and the risk rating evaluation results provided by fund sales institutions must not be lower than the risk rating evaluation results made by the fund manager. The differences in the fund contract regarding the fund’s risk-return characteristics and fund risk ratings exist due to different considerations. Investors should understand the risk-return situation of the fund and carefully choose fund products based on their investment objectives, duration, investment experience, and risk tolerance, and bear risks independently. The registration of the above funds by the China Securities Regulatory Commission does not imply a substantive judgment or guarantee of the investment value, market prospects, and returns of this fund. Fund investments must be approached with caution.

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