Donghai Securities: The price of refrigerants is steadily increasing, with vast potential for future growth.

released a research report stating that in 2025, the quota for second-generation refrigerants will be reduced, while the total production quota for third-generation refrigerants will remain at the baseline level. Considering the strong demand in the air conditioning market, the quota for third-generation refrigerants is slightly increased compared to 2024. Taking into account the demand from new installations and maintenance markets downstream, the supply and demand relationship for second and third-generation refrigerants remains tight. Since 2025, downstream air conditioning industry production has significantly increased, with strong demand. The finalized long-term contracts for air conditioning manufacturers in 2025 provide support for refrigerant prices, and the refrigerant industry is expected to maintain a high level of prosperity, with the profitability of related refrigerant production enterprises expected to increase significantly. In February, the price spread of refrigerants rose, indicating that there is still room for price increases. As of February 28, 2025, according to Baichuan Yingfu data, the prices for third-generation refrigerants R32, R125, and R134a were 44,500 yuan/ton, 44,000 yuan/ton, and 45,000 yuan/ton respectively, with monthly increases of 2.30%, 2.33%, and 2.27% respectively. The price of R22 was 34,000 yuan/ton, an increase of 3.03% from the previous month. Due to rapid capacity expansion and a decline in demand growth, the prices of PTFE and HFP in China remain low, while PVDF prices have rebounded slightly. Air conditioning production maintains a high growth rate, and it is expected to continue growing in April. The peak season for air conditioning production is expected from March to May, with demand growth likely to remain high. According to industry online data, from March to May 2025, the total production of domestic air conditioners in China is expected to be 24.76 million units, 24.26 million units, and 24.30 million units, with year-on-year growth rates of 13.54%, 10.30%, and 14.70% respectively. The production of domestic air conditioners and refrigerators is at a relatively high level in recent years, providing support for refrigerant demand. On the subject side: It is recommended to focus on leading companies in the refrigerant industry and fluorine chemical production companies with a complete industry chain, such as Zhejiang Juhua (600160.SH), Zhejiang Sanmei Chemical Industry (603379.SH), and China Kings Resources Group involved in fluorine chemical raw materials. Risk Warning: Risks of changes in refrigerant quota policies; risks of price changes in raw materials; risks of lower-than-expected demand.