HK Stock Market Move | DONGYUE GROUP (00189) rises by over 5% as quotas drop and demand recovers, the refrigerant industry is expected to continue to increase in prosperity.

DONGYUE GROUP (00189) rose over 5%, rising 5.2% to HK$6.27 as of press time, with a turnover of HK$59.0431 million. On the news front, the Ministry of Ecology and Environment recently released a letter soliciting opinions on the total quota setting and allocation plan for ozone-depleting substances and hydrofluorocarbons in 2025. The plan has preliminarily determined the total quota and distribution plan for second-generation refrigerants (HCFCs) and third-generation refrigerants (HFCs) in 2025, and provided an explanation of the plan's preparation. The plan follows the working principles of target orientation, steady progress, phased implementation, and categorized strategies. The quota for the second-generation refrigerants strictly implements the annual elimination task, while the quota for the third-generation refrigerants has made minor adjustments to the quota allocation for some products based on a comprehensive consideration of industry development needs and the implementation of HFC quotas in 2024. EB SECURITIES pointed out that with the continuous improvement of China's macroeconomic fundamentals and the rebound in downstream consumer demand, the national air conditioning and automobile production have been continuously growing on a year-on-year basis since August 23. As of August 2024, the cumulative year-on-year increase in air conditioning and automobile production in China was +7.8% and +3.4% respectively. As a major downstream industry of refrigerants, the continuous growth in air conditioning and automobile production is expected to support a steady recovery in refrigerant demand. The bank believes that as the quotas for 2025 gradually take effect, the supply and demand of the refrigerant industry is expected to continue to improve, and the industry prosperity is expected to continue to rise.