The Zhitong Finance App learned that Guolian Securities released a research report saying that China dominates the global production and consumption of fluoropolymers, but the pain point is that there is excess low-end production capacity, insufficient high-end production capacity, and that there is still a big gap between product quality and international giants such as Daikin and Chemu. At present, China's fluoropolymer production capacity expansion rate has not slowed down, and prices and operating rates for many varieties have been low for a long time. In order to avoid heated competition, high-end transformation is the way to break the industry. After the implementation of third-generation refrigerant quotas, the future investment focus of fluorine chemical companies will shift to fluoropolymers and fluorine-containing fine chemicals with higher added value. Under the catalysis of domestic substitution, relevant enterprises in China will usher in good opportunities for high-end transformation, with long-term growth potential.

Related targets: Dongyue Group (00189) has a large production capacity of fluoropolymers and a complete product matrix; Juhua (600160.SH) is active in both polymers and fluorinated liquids; Yonghe Co., Ltd. (605020.SH) has certain product advantages in FEP and PFA; Xinzhoubang (300037.SZ) is a domestic fluorinated liquid leader, and most products are in the Blue Ocean market, and also has a high-end fluoropolymer PFA layout.

The views of Guolian Securities are as follows:

Lack of product premiums is a pain point for fluoropolymers in China

In 2022, the global mainstream fluoropolymer market was about US$6.6 billion, and the future growth rate of several segments will exceed 5%. China dominates the global production and consumption of fluoropolymers, but the pain point is that there is excess low-end production capacity, insufficient high-end production capacity, and there is still a big gap between product quality and international giants such as Daikin and Chemu. At present, China's fluoropolymer production capacity expansion rate has not slowed down, and prices and operating rates for many varieties have been low for a long time. In order to avoid heated competition, high-end transformation is the way to break the industry.

PFA, ETFE, and perfluoroether rubber represent the direction of high-end

There are many types of fluoropolymers. Among them, PTFE consumption is the largest. PVDF is catching up with lithium photovoltaics. FEP/PFA/ETFE was invented to improve PTFE processing performance, and fluorine rubber is used as a sealing material under harsh conditions. The bank believes that PFA, ETFE, and perfluoroether rubber have high technical barriers and are positioned in high-end applications, representing a high point where fluoropolymers are gaining ground, and may be more worthy of attention in the future.

The high-end transformation of fluoropolymers from leading companies is worth looking forward to

PFA has extremely high added value and is highly compatible with semiconductor manufacturing processes, and companies such as Yonghe Co., Ltd. are actively introducing it; ETFE can replace glass in construction and photovoltaics, and Dongyue Group and Juhua Co., Ltd. are expected to break foreign monopolies; perfluoroether rubber is the preferred sealing material in semiconductor manufacturing, and Zhonghao Chenguang and Sanaifu are expected to achieve high-end breakthroughs in the semiconductor field. Focus on breakthroughs in the PTFE medical/semiconductor field; focus on PVDF's supporting raw material R142b; focus on the extension of FEP from high-end cables to the medical field.

Perfluoropolyether and perfluoroolefin may be preferred for semiconductors and data centers, respectively

Fluorinated liquid is the most ideal data center immersion coolant. In 2025, global usage may exceed 100,000 tons, and the market may exceed 20 billion yuan; 3m withdrew from PFASS production, and about 80% of the global semiconductor coolant market is in the supplier switching window, and China's fluorinated liquid companies have ushered in important development opportunities. Hydrofluoroether/perfluoropolyether/perfluoroolefin are the mainstream subvarieties. Although hydrofluoroether is relatively mature, it is less compatible with liquid cooling, and is more used in the field of cleaning; perfluoropolyether is more expensive and more suitable in the semiconductor field; perfluoroolefins have good performance, are easy to prepare on a large scale, have cost advantages, or are ideal for data center coolants.

There has been a breakthrough in domestic fluorinated liquid, and we are actively monitoring the progress of the introduction during the window

Foreign companies such as 3M and Solvay occupy a major share of the global electronic fluoride solution, and Chinese companies are catching up at an accelerated pace. Xinzhoubang is the leader in fluorinated liquids in China, with a complete fluorinated liquid product matrix and high dosage certainty; Juhua Co., Ltd. invests in perfluoropolyether, and the Juxin coolant project continues to advance, and there is a possibility of introducing it to Alibaba Cloud; Yonghe PFC is expected to achieve volume release with cost advantages; Yongtai Technology undertakes technology from the Shanghai Organic Institute of the Chinese Academy of Sciences and promotes project construction; Tianci Materials has a large planned production capacity for perfluoropolyether and perfluoroolefin.

Risk warning: downstream market demand falls short of expectations; environmental policy risks; industry competition exacerbates risks