ZJJH(600160) 长江证券·2024-07-01 08:01Investment Rating - The report gives a "Buy" rating for the company, with an expected net profit of 27.1, 41.4, and 55.3 billion yuan for 2024-2026 [2][7] Core Views - The company is a leader in the fluorochemical industry, with the third-generation refrigerant quota officially frozen in 2024, signaling a long-term upward cycle for the industry [2][5] - The company is expanding into fluoropolymers and fine fluorochemicals, which are expected to drive future growth [2][7] - The company holds a dominant position in the refrigerant market, with a 26.3% market share in R22 and a 37.4% market share in third-generation refrigerants [4][5] Company Overview - The company is a leading fluorochemical and chlor-alkali chemical enterprise in China, with a complete industrial chain covering basic raw materials, refrigerants, organic fluorine monomers, fluoropolymers, and fine fluorochemicals [4] - The company has a strong market position in refrigerants, with a 26.3% market share in R22 and a 37.4% market share in third-generation refrigerants [4][5] - The company is also a leader in fluoropolymer materials and specialty chlor-alkali materials, with a global leading position in VDC and PVDC industrial chains [4] Refrigerant Market Analysis - The second-generation refrigerants are being phased out, with a 49.9% reduction in quotas by 2024, and a further reduction to 97.5% by 2030, leaving only 2.5% for maintenance [5] - The third-generation refrigerants have entered a right-side upward trend, with quotas officially frozen in 2024, leading to a long-term upward cycle [5][7] - The company has a significant advantage in the refrigerant market, with a 26.3% market share in R22 and a 37.4% market share in third-generation refrigerants [4][5] Fluoropolymer and Fine Fluorochemicals - The company is expanding into fluoropolymers and fine fluorochemicals, which are high-value-added products and are gradually replacing imports [6] - Fluoropolymers, such as PTFE, PVDF, FKM, FEP, and PFA, are widely used in industries like automotive, chemical, and aerospace, with significant potential for high-end applications [6] - The company is also developing fluorinated fluids, which are used in semiconductors, data centers, and other high-tech industries, with opportunities for domestic substitution due to 3M's exit from the market [6] Financial Performance - The company's revenue has grown steadily, with a compound annual growth rate of 13.0% from 2000 to 2023 [20] - The company's profitability has been cyclical, with three major cycles of growth driven by factors such as home appliance demand, environmental regulations, and energy controls [20] - In 2023, the company's revenue decreased by 3.9% to 20.66 billion yuan, while net profit decreased by 60.4% to 940 million yuan, mainly due to price adjustments in PVDF and basic chemical products [20] Strategic Advantages - The company has a complete upstream industrial chain, with self-sufficient production of key raw materials like hydrogen fluoride and chlorinated products, giving it a strong cost advantage [48][49] - The company has increased its market share through quota transactions and acquisitions, such as the acquisition of Feiyuan Chemical, which further consolidated its leading position in the third-generation refrigerant market [50][51] - The company is also a leader in fourth-generation refrigerants, with an annual production capacity of 8,000 tons, positioning it well for future growth [57]