The company has been deeply involved in the fluorine chemical industry for nearly 20 years, transforming from a basic chemical industry enterprise to an innovative enterprise focusing on high-performance fluorine and chlorine materials. It is a leading advanced fluorine chemical manufacturing base with comprehensive support for fluorine chemicals and chlor-alkali chemicals in China. The company has formed a complete industrial chain of fluorine refrigerants, organic fluorine monomers, and fluoropolymers supported by liquid chlorine, chloroform, trichloroethylene, perchloroethylene, and AHF as supporting raw materials. The company's core industry, fluorine chemicals and other leading products, are at the leading level in the industry in terms of scale and technology. The share of “Juhua” refrigerants in the global market has always been at the leading level.

The company has a complete fluorine chemical industry chain such as fluorine chemical raw materials, fluorine refrigerants, fluoropolymers, and fluorine-containing fine chemicals. Relying on leading competitive position, perfect technological innovation system and industrial operation experience, and based on the good development prospects of fluorine chemicals, the company has formed a pattern and trend of high-end expansion of the industry. The company has the advantage of a characteristic business model of production according to national quotas, and has the absolute leading production quota for fluorine refrigerants in China. Fluorine chemicals have an outstanding position as a leader.

The company's core products, second-generation and third-generation fluorine refrigerants (HCFCs, HFCs), are produced and sold in accordance with nationally approved production quotas and relevant national quota management regulations. According to the Montreal Protocol and its Kigali Amendment, the total HCFCs quota is being reduced at an accelerated pace. The total HFCS quota has now been frozen and will be gradually reduced in the future, and market supply is limited by the amount of quotas. The company (including holding subsidiaries) now has a production quota of 0.0475 million tons of second-generation fluorine refrigerant HCFC-22, accounting for 26.3% of the country, and its domestic use quota accounts for 31.55% of the country, ranking first in the country; it has a production quota of 0.2788 million tons of third-generation fluorine refrigerants (HFCs), accounting for 39.16% of the country's total share of similar varieties. The total volume is absolutely leading, the mainstream variety is complete, and the share is leading, firmly establishing the company's absolutely leading competitive position in the market.

After entering 2024, various manufacturers have begun to produce and sell third-generation refrigerants in accordance with relevant national regulations. Sales volume has declined markedly, and prices have risen. At the same time, overseas manufacturers of third-generation refrigerants have begun to shut down some of their equipment, and a large number of existing equipment still use a lot of third-generation refrigerants, so the increase in demand for maintenance of equipment stocks abroad will also stimulate an increase in exports of third-generation refrigerants from China. As overseas third-generation refrigerants are further reduced and export demand increases, the long-term supply and demand pattern for third-generation refrigerants is expected to improve.

First coverage, giving a “Highly Recommended” investment rating. Based on current industry trends and product price estimates, we expect refrigerant prices to continue to rise next year, and the company's performance is expected to continue to grow month-on-month. The company's revenue for 2024-2026 is estimated to be 24 billion yuan, 27.584 billion yuan and 31,528 billion yuan respectively; net profit due to mother is 2.01 billion yuan, 3.178 billion yuan, and 4.401 billion yuan, respectively; EPS is 0.74 yuan, 1.18 yuan and 1.63 yuan, respectively. The current stock price corresponds to PE of 30.5 times, 19.3 times, and 13.9 times, respectively. It was covered for the first time and gave a “highly recommended” investment rating.

Risk warning: the risk of capacity construction falling short of expectations, the risk of rising raw material prices, and the risk of product price fluctuations.