Excerpts from UOB KayHian report Analyst: Clement Ho We are seeing a widening of gross profitability from high product ASPs and a slower rise in raw material prices. We do not expect any significant new production capacity for dimethylformamide and methylamine due to environmental concerns remaining at the forefront of the Chinese government’s agenda, while ample supply of methanol will put a cap on feedstock costs. Maintain BUY with higher target price of S$0.168 (from S$0.138) after re-basing our valuation year from 2021 to 2022. WHAT’S NEW • Product ASPs continue to trend upwards in 1Q22. According to CEIC Data, the average price for dimethylformamide (DMF) recorded a 74.5% yoy spike in 2M22 to Rmb16,350/tonne (2M21: Rmb9,370/tonne). This compares with our initial estimate of Rmb10,500/tonne in 2022 for Jiutian Chemical Group (Jiutian). Historically, ASPs are typically the lowest in the first quarter, before trending up the rest of the year. • No new capacity in the foreseeable future. China’s manufacturing industry continues to...