Understanding and reasoning about objects' physical properties in the natural world is a fundamental challenge in artificial
intelligence. While some properties like colors and shapes can be directly observed, others, such as mass and electric charge, are
hidden from the objects' visual appearance. This paper addresses the unique challenge of inferring these hidden physical properties
from objects' motion and interactions and predicting corresponding dynamics based on the inferred physical properties. We first introduce
the Compositional Physical Reasoning (ComPhy) dataset. For a given set of objects, ComPhy includes limited videos of them moving
and interacting under different initial conditions. The model is evaluated based on its capability to unravel the compositional hidden
properties, such as mass and charge, and use this knowledge to answer a set of questions. Besides the synthetic videos from simulators,
we also collect a real-world dataset to show further test physical reasoning abilities of different models. We evaluate state-of-the-art video
reasoning models on ComPhy and reveal their limited ability to capture these hidden properties, which leads to inferior performance.
We also propose a novel neuro-symbolic framework, Physical Concept Reasoner (PCR), that learns and reasons about both visible
and hidden physical properties. Leveraging an object-centric representation, PCR utilizes videos and the associated natural language
to infer objects' physical properties without dense object annotations. It incorporates property-aware graph networks to approximate the
dynamic interactions among objects. Furthermore, PCR employs a semantic parser to convert questions into semantic programs, and
a program executor to execute the programs based on the learned physical properties and dynamics. After training, PCR demonstrates
remarkable capabilities. It can detect and associate objects across frames, ground visible and hidden physical properties, make future
and counterfactual predictions, and utilize these extracted representations to answer questions. We hope the proposed ComPhy dataset
and the PCR model present a promising step towards more comprehensive physical reasoning in AI systems.