According to Zhituo Finance APP, Kaiyuan Securities released a Research Report stating that after the adjustment of the quota policy in 2024 through expected games and switches, along with the market trends of related cooling agent varieties, the adjusted policy will be more reasonable and stable, and the market will have a more rational understanding of the issuance of quota surplus. In Q4 2024, multiple varieties of cooling agents in both domestic and foreign trade are expected to rise, and the Industry's inventory is running at low levels, making 2025 prospects promising. Firmly bullish on the continued cooling agent market, and determining that in 2025, under the multiple catalytic resonance of sustained profit releases, accelerated right-side trends, possible peak season restocking due to low inventory, and rational policy expectations, the cooling agent Industry may experience a main upward trend in both profits and valuations.

KYG Securities' main points are as follows:

Review and current situation: Profit recovery coexists with market fluctuations, with multiple varieties of cooling agents and comprehensive upturns in both domestic and foreign trade in Q4.

In 2024, China enters the first year of HFCs cooling agent quota period. Looking over the year, the market shows the characteristics of "Q1 all varieties generally rising and recovering → Q2, Q3 structural differentiation → Q4 overall rising and upturn", and "Q1-Q3 domestic trade market leading foreign trade → Q4 domestic and foreign trade resonating and rising". During this process, although the overall trend in the cooling agent Industry's fundamentals is good, the prices of corresponding listed companies have shown significant fluctuations due to various comprehensive impacts such as mismatch of reality and expectations, policy adjustments, and shifts in expectations.

Current situation: Policy side: The quota policy for 2025 has already been implemented. After the expected games and switches regarding the adjustment of quotas in 2024, along with the market trends of related cooling agent varieties, the adjusted policies will be more reasonable and stable, and the market will have a more rational understanding of the issuance of quota surplus. Fundamental side: In Q4 2024, multiple varieties of cooling agents are rising in both domestic and foreign trade, and the Industry's inventory is running at low levels, making 2025 prospects promising.

Outlook: Under the global quota system, there may be multiple rounds of investment opportunities in cooling agents, capitalizing on the golden investment period for cooling agents.

Short-term: Currently, the annual production of the refrigerant market is nearing its end, with the Industry as a whole entering a phase of gradually consuming quotas and tightening supply. Additionally, according to data from the industry online, the production of household Air Conditioners in December 2024, as well as January and February 2025, is expected to grow year-on-year by 31.7%, 4.1%, and 31.5%, respectively, indicating good demand. The price of various refrigerants may have the potential to rise further in the short term. The continued prosperity of the Industry, combined with low inventory levels, lays a good foundation for the market developments in 2025.

Mid-term: Although 2024 marks the first year of the quota period and the refrigerant Industry has seen some improvement, it still faces significant pressures due to factors such as domestic and international inventory backlog, structural differences in market performance among different varieties, weak performance in the basic chemical sector, and policy adjustments. The year 2024 is a year of recovery and transition for the refrigerant Industry, as well as a year to solve problems and build consensus. Entering 2025, catalyzed by factors such as "profit release improving + industry supply-demand optimization (low inventory) + possible seasonal replenishment + HCFCs reduction + rational expectations for policies," the refrigerant Industry may experience a major upward market trend.

Long-term: The industrial transformation is a long and arduous journey, and the seller's market pattern for refrigerants is expected to continue for a long time. With the exploration of substitutes and long promotion cycles, the domestic refrigerant Industry, which masters the pricing power in this seller's market commercial logic, combined with China's strong manufacturing base, is expected to gain further global leadership once the world fully enters quota management. The refrigerant Industry may become a sector that has profit and valuation support, with predictable and multiple investment opportunities for an extended period, and the current time may be a golden period for investment.

Recommended symbols: Zhejiang Juhua (600160.SH), Zhejiang Sanmei Chemical Industry (603379.SH), Haohua Chemical Science& Technology Corp. (600378.SH); Beneficiary symbols: Guangdong Hec Technology Holding (600673.SH), DONGYUE GROUP (00189), Yonghe Co., Ltd. (605020.SH).

Risk warnings: Policy changes in the Industry exceed expectations; demand falls short of expectations; progress on substitutes exceeds expectations.