Analysis of the Impact of Changes in Third-Generation Refrigerant Supply and Demand Patterns on Industry Valuation and Investment Opportunities

, by 2026, supply-side restrictions on third-generation refrigerants will continue to tighten. According to international environmental agreements, production capacities of core varieties such as R32, R134a, and R125 will be further compressed, creating long-term structural opportunities on the supply side for the industry.

: As the world’s largest refrigerant producer, China ensures orderly supply contraction through a production quota management system. Leading enterprises, with technological advantages and scale effects, have an edge in quota allocation, and industry concentration continues to rise.

: The thermal management system of electric vehicles requires significantly more refrigerant than traditional fuel vehicles, with a 2-3x increase in refrigerant usage per vehicle. As global new energy vehicle penetration rates rise rapidly, demand for environmentally friendly refrigerants such as R134a is experiencing structural growth.

: Benefiting from global climate change and improved living standards, air conditioner ownership continues to grow, especially in emerging markets where penetration rates still have significant room for improvement, directly driving demand for mainstream refrigerants like R32.

: The global refrigerant industry chain is clearly shifting toward China, and Chinese enterprises’ competitive advantages in technology, cost, and quality are continuously strengthening, leading to sustained growth in export orders.

The refrigerant industry is undergoing an important transformation from cyclical chemical products to growth-oriented new materials. Rigid supply constraints combined with structural demand growth have significantly improved industry profitability, making the shift from traditional P/E to PEG valuation an inevitable trend.

Core products such as R32, R134a, and R125 have sustained price increase expectations against the backdrop of supply-demand imbalance. According to brokerage forecasts, prices of major refrigerant products are expected to rise by 30-50% by 2026, which will directly translate into significant profit growth for enterprises and provide strong momentum for stock price increases.

:

• Market Capitalization Scale
  : $97.87 billion, occupying an absolute leading position in the industry [0]
• Financial Stability
  : Current ratio 1.61, ROE 20.77%, net profit margin 14.66% [0]
• Capacity Layout
  : Has the largest refrigerant production base in China, with R32 capacity accounting for over 30%

:

• 2024 stock price increased by 119.70%, leading the industry [0]
• P/E ratio 24.66x, in a reasonable valuation range [0]
• Strong technical R&D capabilities, with first-mover advantages in fourth-generation refrigerants

:

• Outstanding Profitability
  : Net profit margin up to 33.31%, ROE reaching 25.73%, both leading the industry [0]
• Financial Health
  : Current ratio 4.83, strong risk resistance [0]
• Product Structure Optimization
  : Increasing proportion of high-value-added products

:

• 2024 stock price increased by 68.78%, stable performance [0]
• P/E ratio 19.34x, relatively reasonable valuation [0]
• Technological leading advantages in the R134a segmented market

: As an emerging refrigerant enterprise, with a market capitalization of $13.08 billion, it has differentiated competitive advantages in specific segmented product areas [0].

: Market capitalization of $28.74 billion, a diversified comprehensive chemical enterprise, with refrigerant business as an important growth driver [0].

: The Kigali Amendment to the Montreal Protocol requires developed countries to phase out HFCs from 2024 to 2028, and developing countries to complete the phase-out from 2029 to 2045. This policy framework creates a time window for third-generation refrigerants.

: Under the dual-carbon strategy, the policy orientation for the refrigerant industry to develop in an environmentally friendly and low-carbon direction is clear, and leading enterprises’ investments in technological R&D and capacity upgrading will receive policy support.

: Leading enterprises are actively deploying HFOs and other fourth-generation refrigerants to seize the future market high ground. Accumulation of technical patents will become an important competitive barrier.

: Through continuous and automated transformation, leading enterprises’ production costs continue to decline, occupying an advantage in price competition.

Refrigerant demand has obvious seasonality, with the traditional demand peak season from June to September each year. It is recommended to layout at low prices during the off-season and realize gains during the peak season.

The mismatch between supply tightening and demand growth in 2026 will bring certain opportunities; focus on allocating leading enterprises with sufficient capacity and advanced technology.

The commercialization process of fourth-generation refrigerants will bring a new growth curve to the industry; focus on enterprises with patent layouts and R&D advantages in new technology fields.

1. Policy Execution Risk
   : If environmental policy execution is less than expected, it may affect the industry’s supply and demand pattern
2. Technology Substitution Risk
   : Breakthroughs in alternative technologies may impact existing products
3. Raw Material Price Volatility
   : Sharp fluctuations in upstream raw material prices may affect enterprise profitability

The third-generation refrigerant industry is in a golden development period driven by both policy and technology. The continuous improvement of supply and demand patterns provides a solid foundation for industry valuation growth. Leading enterprises, with scale advantages, technological advantages, and policy benefits, are expected to obtain excess returns in this round of industry upward cycle. It is recommended that investors focus on investment opportunities in leading enterprises such as Juhua Co., Ltd. and Sanmei Co., Ltd.

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