According to ITC Finance APP, SWHY released a Research Report stating that the issuance of second-generation refrigerant quotas in 2025 is in line with expectations, while the third generation exceeds expectations overall. The increase in quotas reflects the prosperity of the industry, and under the framework of international conventions, the long-term logic of refrigerants still exists, with policy-making anchored on supply and demand rather than prices. Bullish on the continued resonance and upward trend of domestic and foreign prices of refrigerants. The structure of the refrigerant industry and enterprises is continuously optimized, with strong supply constraints in the future. Demand is expected to grow with the increase in the global Air Conditioner and Autos maintenance and new installation markets, as well as the growth in the demand for industrial refrigerants and Cold Chain, leading to a continued optimization of the supply-demand structure which will bring about a rebound in the fluorochemical industry.

Shenwan Hongyuan's main points are as follows:

The issuance of quotas for second and third-generation refrigerants in 2025 has been announced.

On December 16, 2024, the Ministry of Ecology and Environment announced the public notice regarding the issuance of quotas for the production, use, and import of ozone-depleting substances and hydrofluorocarbons for 2025. Applications for production and use quotas of ozone-depleting substances for 2025 from 48 enterprises were accepted, along with applications for production and import quotas of hydrofluorocarbons from 67 enterprises.

The issuance of quotas for second-generation refrigerants is in line with expectations, and the price of R22 is likely to rise again.

According to the document's content, the issuance of second-generation refrigerant quotas in 2025 maintains the content of the previous plan, with total production quotas and domestic quotas for 163,600 and 86,000 tons respectively, reduced by 0.0512 million tons and 0.043 million tons compared to 2024 (considering Zhejiang Pengyou). Among them, the production and domestic quotas for R22 are 149,100 and 80,900 tons, reduced by 32,800 and 31,000 tons compared to 2024, with reductions of 18% and 28% respectively; the production quota for R141b is 9,157 tons, reduced by 11,938 tons compared to 2024, which only belongs to Zhejiang Sanmei Chemical Industry. The gap in the rigid repair market for household and commercial Air Conditioners in 2025 is expanding rapidly, and the price of R22 may rise again.

The quota for the third generation refrigerants was issued as scheduled, but the issuance of R32/R134a/R245fa was slightly higher than expected.

In 2025, the total quota for the third generation refrigerants (excluding R23) is 0.7889 million tons, an increase of 0.0434 million tons year-on-year, with the increase being 0.0097 million tons less than expected. The total external quota is 0.4017 million tons, a decrease of 0.0039 million tons year-on-year. In terms of specific varieties, the production quota for R32 is 0.2803 million tons, with an increase of 0.0408 million tons, which is 0.0042 million tons lower than expected. Considering the increase of 0.035 million tons in 2024, the actual increase is 5786 tons; the production quota for R125 is 0.1673 million tons, with an increase of 1614 tons; the production quota for R134a is 0.2083 million tons, a decrease of 7401 tons year-on-year, better than expected; the production quota for R245fa is 0.0195 million tons, with an increase of 5354 tons, which is 2646 tons less than expected.

The signing of long-term contracts for Q1 2025 is imminent, and high prosperity continues into the new year.

According to data from Fluorine Network, the domestic trade prices of R32/R125/134a have all surpassed 0.04 million, with some transactions reaching 0.042 million, and since Q4, foreign trade prices have also risen sharply; according to the data from the Industrial Online WeChat account, the year-on-year growth in household air conditioner production in December 2024, January 2025, and February 2025 is 32%/4%/32%, continuously catalyzing demand. It should be understood that quotas are merely rights for enterprises and do not represent obligations. The issuance of quotas reflects the prosperity of the industry, impacting the slope rather than the trend and the outcome. Within the framework of international agreements, the long-term logic for refrigerants still exists. Policy formulation is anchored to supply and demand rather than prices, and there is a bullish outlook on the continued upward resonance of domestic and foreign trade prices for refrigerants.

Investment analysis opinion: Maintain a bullish rating on the industry.

It is recommended to continue to pay attention to investment opportunities in related companies: Zhejiang Juhua (600160.SH), Zhejiang Sanmei Chemical Industry (603379.SH), DONGYUE GROUP (00189), Yonghe Co., Ltd. (605020.SH), Guangdong Hec Technology Holding (600673.SH), Haohua Chemical Science& Technology Corp. (600378.SH), China Kings Resources Group (603505.SH), etc.

Risk warning: 1. A significant decline in downstream air conditioner and auto production; 2. A drop in refrigerant prices; 3. A substantial rise in raw material prices.