The Zhitong Finance App learned that Guotai Junan released a research report stating that in the short term, the price of third-generation refrigerants is likely to rise or fall when the peak season comes. In the medium to long term, the supply and demand pattern for third-generation refrigerants continues to improve. The supply-side refrigerant quota is gradually being cut, and the increase in demand side downstream air conditioners, refrigerators, etc. is driving up demand for refrigerants. It is expected that third-generation refrigerants will begin a long-term boom cycle, and refrigerant manufacturers with high quotas will benefit from this boom cycle. Juhua Co., Ltd. (600160.SH), the third-generation refrigerant quota leader, is recommended. Relevant beneficiaries include Sanmei Co., Ltd. (603379.SH), Yonghe Co., Ltd. (605020.SH), Haohua Technology (), and Dongyue Group (00189). 600378.SH

Guotai Junan's main views are as follows:

As the peak season approaches, the price of third-generation refrigerants continues to rise, and the price difference has clearly recovered

Price: According to Baichuan Yingfu, as of March 26, 2024, R32/R134A/R410A/R143A prices were 26000/32000/43500/35500/60,000 yuan/ton respectively, weekly increase +2.0%/0.0%/0.0%/0.0%/0.0%/0.0%, monthly increase +13.0%/3.2%/10.1%/9.2%/5.3%, quarterly increase +57.6%/18.5%/61.1%/57.8%/90.5%.

Cost side: According to Baichuan Yingfu, as of March 26, 2024, fluorite/sulfuric acid/dichloromethane/trichloroethylene chloride prices were 3400/370/2280/4615/5200 yuan/ton, with weekly increases of 0.0%/+2.2%/0.0%/+4.0%, monthly increases of 2.3%/19.4%/0.0%/-2.8%/+18.2%, with quarterly increases of -4.9%/-14.0%/-5.8%/-17.2%/+25.3%.

Spread: Price spread improved significantly, R32/R134A/R125 spread weekly increase +3.2%/-0.3%/-1.7%, monthly increase +29.7%/7.3%/15.0%, depending on the quarter, R32/R134A/R125 spread increase +539.0%/97.0%/388.6%.

Household air conditioning production is high, and demand for third-generation refrigerants continues to grow

According to Aowei Cloud Network production monitoring data, the total domestic household air conditioner production schedule in April was 20.73 million units, of which the domestic sales schedule was 1.05 million units, an increase of 18.5% over the previous year, and the export schedule was 8.68 million units, an increase of 28.8% over the previous year. On the supply side, rising copper prices provided cost support, and channel providers locked in low prices to pick up goods in advance. On the demand side, during the high temperature weather, manufacturers increased their stocking to meet the peak market season. Guotai Junan believes that the air conditioning market boom will drive a steady increase in refrigerant demand. Combined with rigid supply restrictions on refrigerant quotas, refrigerant prices tend to rise and fall easily.

Companies with the highest quotas are expected to fully benefit

According to the Ministry of Ecology and Environment's announcement, a total of 7455.56 million tons of third-generation refrigerants (HFCs) were issued in 2024, which is in line with overall market expectations. Among them, Juhua Co., Ltd.'s production quotas of R32/R134A/R125A/R143A are 8.35/6.06/5.01/207,000 tons respectively. Without considering the acquisition of Feiyuan, the quota accounts for 30.1%. If future acquisition of Feiyuan is taken into account, the share of Feiyuan's quota will reach 37.4%. Sanmei Co., Ltd.'s R32/R134A/R125A/R143A production quota was 2.78/5.15/3.15/0.63 million tons, respectively. Yonghe Co., Ltd.'s R32/R134A/R125A/R143A production quota is 0.58/1.09/0.29/14,400 tons, respectively.

Risk warning: Prices of raw materials fluctuate sharply, demand for refrigerants falls short of expectations, and alternatives such as fourth-generation refrigerants are progressing rapidly.