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With a broad exposure to industrial and consumer end-markets, BASF represents a play on improving macro trends as the economy recovers from the COVID-19 pandemic. While there are legitimate fears about a slow recovery in key end markets, an oversupply of upstream chemicals building in Asia, and a likely aborted IPO of BASF's oil and gas production business, the significant earnings declines and a dividend cut are already priced into the shares. Gradual portfolio transition and self-help provide some support to earnings. As BASF is the most liquid stock in the European chemicals sector, we think it is a natural "proxy" for recovery. Fears of higher input prices and lower demand have led to a sharp underperformance in BASF's shares, creating an opportunity. The dividend yield is at levels previously seen only in previous crises (2008, 2020), and we do not think the dividend is at risk.