Core Viewpoint - Under the dual drive of quota policy promotion and market demand boost, domestic fluorochemical leader Juhua Co., Ltd. (600160.SH) is expected to deliver impressive mid-term performance results [2][3] Company Summary - Juhua Co., Ltd. announced that it expects its net profit attributable to shareholders for the first half of 2025 to reach between 1.97 billion to 2.13 billion yuan, representing a year-on-year growth of 136% to 155% [2] - The company's net profit after deducting non-recurring gains and losses is projected to be between 1.95 billion to 2.11 billion yuan, with a year-on-year increase of 146% to 166% [2] - The significant growth in performance is primarily attributed to the simultaneous increase in both volume and price of core refrigerant products [2] Industry Summary - The refrigerant industry is undergoing a restructuring, transitioning from "free competition" to "quota regulation" due to the implementation of the Kigali Amendment [3] - Juhua Co., Ltd. holds a significant advantage with a high quota share, having a production quota of 38,900 tons for second-generation refrigerants (HCFCs), accounting for 26.10% of the national total, and 31.28% of internal quotas, making it the leader in China [3] - For third-generation refrigerants (HFCs), the company has a production quota of 299,800 tons, representing 39.6% of the total market share for similar products [3] - Since the fourth quarter of last year, domestic refrigerant prices have been on a continuous rise, with the average price of the mainstream refrigerant R32 exceeding 51,000 yuan/ton as of June 5, marking a 19% increase within the year and a 42% year-on-year growth [3] - The industry's gross profit reached 35,000 yuan/ton, an increase of over 10,000 yuan/ton compared to the same period last year [3] - Benefiting from strong performance expectations and high industry prosperity, Juhua Co., Ltd.'s stock price has risen by 20.4% this year, reaching a historical high of 29.29 yuan/share on July 2 [3]

Core Viewpoint - The company held an investor reception on June 13, 2025, to enhance communication with investors regarding its development strategy and the current situation of refrigerants, particularly the third-generation hydrofluorocarbons (HFCs) and their market dynamics [2][5]. Group 1: Event Details - The investor reception took place on June 13, 2025, from 15:00 to 17:45 [2]. - The event was held in the company's video conference room [3]. - Attendees included company executives and representatives from various investment firms, totaling 51 participants [4]. Group 2: Discussion Highlights - The main purpose of the meeting was to strengthen investor relations and address misconceptions regarding the HFCs quota system, which is a significant change in the industry [5]. - HFCs are characterized as essential refrigerants for air conditioners and heat pumps, with a growing market due to increasing demand in various sectors [6]. - The company emphasized that HFCs have unique market attributes, including low downstream cost share and high storage capability, distinguishing them from other chemical products [6][7]. Group 3: Market Dynamics - The implementation of the quota system for HFCs starting in 2024 under the Montreal Protocol has positioned China to hold over 80% of the global HFCs quota, creating a specific business model [7]. - The company noted that the seasonal production decline in the air conditioning sector does not solely dictate HFC demand, as market structures are evolving [8]. - The company has secured export orders for the third quarter, with prices showing an upward trend [8][9]. Group 4: Regulatory and Market Measures - The Ministry of Ecology and Environment has optimized the quota distribution plan for 2025, increasing the R32 quota by 45,000 tons [10]. - The company is prepared to request an additional 10% quota adjustment if demand significantly increases in the second half of the year [10][11]. - Measures to combat counterfeit products in the HFCs market include stricter regulations and enhanced enforcement against illegal production [12].

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [3][7]. Core Views - The company reported a strong performance in Q1 2025, achieving revenue of 5.8 billion yuan, a year-on-year increase of 6.05%, and a net profit of 809 million yuan, up 160.64% year-on-year, indicating a robust recovery and growth trajectory [1][7]. - The company is positioned as a leader in the fluorochemical industry, particularly benefiting from the ongoing upcycle in refrigerants, with significant growth expected in the coming years [7]. - The report forecasts revenue growth for 2025-2027, estimating revenues of 29.36 billion yuan, 35.23 billion yuan, and 40.51 billion yuan respectively, alongside net profits of 3.30 billion yuan, 4.20 billion yuan, and 4.90 billion yuan [7][15]. Financial Data and Valuation - The company’s total revenue for 2023 is projected at 20.66 billion yuan, with a year-on-year decline of 4%, followed by a recovery with 18% growth in 2024 [15]. - The earnings per share (EPS) are expected to rise from 0.35 yuan in 2023 to 1.22 yuan in 2025, reflecting a strong growth outlook [15]. - The price-to-earnings (PE) ratio is projected to decrease from 72.6 in 2023 to 20.8 in 2025, indicating improving valuation metrics as earnings grow [15]. Market Position - The company has solidified its market position as a leading player in the fluorochemical sector, particularly in the production of fluorinated refrigerants and chlorinated raw materials, with a global leadership status [7]. - The first quarter of 2025 showed a significant increase in sales and production across key product lines, particularly in refrigerants, where average prices rose over 50% [7].