The Zhitong Finance App learned that Guojin Securities released a research report saying that under policy drive, domestic supply will be limited, changes in the supply and demand pattern have a basis for product price increases, and the industry has been at a low profit level for a long time in the early stages. Companies in the industry have the motivation to improve profits, and third-generation refrigerants are expected to enter a stage of continuous price increases. There is relatively high room for price increases for refrigerants, and the gradual implementation of price to performance is gradually formed. It is deterministic and scarce in the current environment, and is expected to drive valuation increases. It is recommended to focus on leading refrigerant manufacturers Juhua Co., Ltd. (600160.SH), Sanmei Co., Ltd. (603379.SH), Yonghe Co., Ltd. (605020.SH), etc.

Guojin Securities's views are as follows:

Supply-side control provides a foundation for refrigerant price increases, and the supply and demand pattern has fundamentally changed.

The refrigerant industry is currently in the environmental protection policy supervision stage. It is a typical policy-controlled industry. The policy will have an obvious impact on the supply, application, demand, and trade side of the industry. As refrigerants enter the quota supervision stage, the effective supply of the industry shifts from production capacity to quotas, and the oversupply situation in the industry has improved markedly. According to the quota distribution situation in 2024, domestic use quotas account for about 48%, which constrains domestic supply, causing the domestic market to show a certain supply tension, leading to an essential improvement in the industry pattern;

The impact of short-term demand disturbances is relatively limited. There is good long-term support, and refrigerants have a basis for long-term price increases.

Demand for refrigerant terminals accounts for air conditioners as the main application market. Looking at the demand for integrated air conditioning exports, new decoration, penetration rate improvement, and stock replacement, stock replacement is the main demand force in the air conditioning market. Currently, the air conditioner penetration rate in China is only about 60%. Compared with the nearly 90% penetration rate in Japan and other countries, there is room for further improvement. Demand brought about by stock replacement and increased penetration rate will continue to grow. In the short term, the impact of the decline in completed housing area on the demand for new renovation can basically be controlled within 10%. Combined with other increases in demand, the short-term disturbance is expected to be limited to less than 10%. Limited. In the medium to long term, the air conditioning market will still have the momentum to continue to rise; at the same time, downstream demand for automobiles, refrigerators (cabinets), and cold chains will increase, and downstream demand for domestic refrigerants will be well supported;

The concentration of the industry has increased dramatically, and bargaining power in the industrial chain has gradually been transferred, and the pattern has become the core driving force for price increases.

Without entering the industry quota control stage, third-generation refrigerants are more like a “sandwich” link in the industrial chain. The upstream has resource attributes, and the downstream market concentration is high. The upward cost is difficult to be effectively transmitted downstream during the quota competition phase. However, after quotas became the ceiling for the industry's effective production capacity supply, the industry concentration increased dramatically, and the industry pattern was clearly optimized. Judging from the 2024 quota distribution, the CR3 of R32, R125, and R134a reached 66%, 66%, and 70% respectively. CR5 is 85%, respectively 85%, 92% After the quota is determined, industry concentration will be greatly increased, and synergy will be greatly increased, forming the core driving force for price increases;

Refrigerants are starting to rise in price, and there is good room for price increases.

According to the operating situation of third-generation refrigerants, demand for refrigerants was still low at the beginning of the year, but the industry has already begun a clear upward trend in prices. In just 1 month, the prices of various types of HFCs have increased markedly. The bulk prices of R32, R125, R134a, and R143a have increased by 14%, 13%, 7%, and 48%. With the gradual launch of downstream demand during the peak season, refrigerants will continue the upward trend. Judging from the operation of third-generation refrigerants, supply-side restrictions have prevented the industry from adding new production capacity — the price increase is continuous, and fourth-generation refrigerants remain high — there is plenty of room for price increases, driving refrigerant companies' profits to continue to increase.

Risk warning: risk of policy changes; risk of demand falling short of expectations; risk of sharp fluctuations in raw material prices; risk of trade policy changes.