Yuanta Investment Consulting Names 11 Traditional Stocks to Watch, Favors Petrochemicals, Shipping, and Apparel

Yuanta Investment Consulting has identified 11 traditional industry stocks poised for growth, with a particular focus on the petrochemical, shipping, and apparel sectors. The firm's latest report indicates a bright outlook, driven by factors such as fluctuating Middle East peace talks boosting prices and cargo demand, alongside a robust domestic economy leading to better-than-expected profits. Traditional industry stocks delivered impressive results in the second quarter. The report specifically names Formosa Petrochemical, Formosa Plastics, and Nan Ya Plastics as beneficiaries of the Middle East conflict, which has driven up oil and petrochemical prices and improved profit margins. Shipping companies U-Ming Marine Transport and Wisdom Marine Lines are expected to benefit from strong demand for bulk cargo, including coal, grain, and steel. In the apparel sector, Eclat Textile Company, Far Eastern New Century, and Tainan Enterprises are highlighted for their optimized product portfolios. Additionally, Ta Chen Stainless Steel is recommended due to rising steel and aluminum tariffs and increased demand for AI data center construction, which is pushing up shipment volumes and prices. Yuanta Investment Consulting noted that the petrochemical sector's profits improved in Q2 due to the U.S.-Iran conflict driving up oil and petrochemical prices and clients actively replenishing inventories. They project Q3 revenue to increase by 6.5% quarter-on-quarter and 26.0% year-on-year, with Q4 revenue expected to decrease slightly quarter-on-quarter but still show a significant year-on-year increase. The shipping sector saw a surge in freight rates and better-than-expected profits in Q2 due to a rush of shipments before U.S. tariff adjustments expired. While the long-term container supply-demand imbalance persists, high oil prices are expected to impact shipping companies' profits. The firm forecasts Q3 revenue to increase by 17.5% quarter-on-quarter, with Q4 revenue decreasing by 12.5%. For bulk shipping, demand for coal, grain, and steel has kept freight rates firm, leading to better Q2 profits. They anticipate Q3 revenue to increase by 6.1% quarter-on-quarter, with Q4 revenue decreasing by 9.0%. The apparel sector's Q3 and Q4 revenue are projected to increase by 10.3% and decrease by 5.4% respectively, driven by inventory replenishment orders during the traditional peak season.