On August 22, Caixin reported (Reporter Luo Yichen) When the market is bullish on the refrigerant bull market, it may have overlooked the drag on the performance of manufacturers caused by the overall weakness of fluorochemicals. This year is a big year for refrigerants, and the market generally expects listed companies to achieve breakthroughs in performance, but the industry leader, Zhejiang Juhua (600160.SH), did not reach the high point of the same period in 2022 in Q2 net profit. The company stated that in addition to the rise in refrigerant prices, the simultaneous decline in prices of fluoro-polymer materials, food packaging materials, and basic chemical products dragged down performance.

Tonight, Zhejiang Juhua announced that in the first half of the year, the company achieved revenue of 12.08 billion yuan, an increase of 19.65% year-on-year; the net profit attributable to the shareholders of the listed company was 0.834 billion yuan, a 70.31% year-on-year increase.

When viewed by quarter, the company's performance has been rising each quarter, but the year-on-year growth rate of profits has slowed down. In the first quarter, it achieved a net profit attributable to the mother of 0.31 billion yuan, an increase of 103.35% year-on-year; in the second quarter, it achieved a net profit of 0.524 billion yuan, which did not reach the high point of the same period in 2022, and the year-on-year growth rate then decreased to 55.35%.

This year is the first year after the determination of the third-generation refrigerant quota. Zhejiang Juhua holds nearly 45% of the quota for the core variety HFC-32. The market has high expectations for its performance. Several brokerages predict that Zhejiang Juhua's full-year revenue and net profit attributable to the mother in 2024 will increase by about 15.60% and 176.21%, respectively. Considering the performance in the first half of the year, the profit growth in the second half of the year undoubtedly faces significant pressure.

As a growth engine for the company, the quantity and price of the company's refrigerant products rose in the first half of the year. Among them, the refrigerant products achieved revenue of 3.925 billion yuan, a year-on-year increase of 36.59%, accounting for approximately 32% of the total revenue and contributing 0.64 billion yuan in profit, accounting for approximately 61% of the total profit. In comparison, basic chemical products, fluoro-polymer products, food packaging material products, and fluorochemical raw materials all saw a year-on-year decline in prices. According to the company's statistics, the profit loss caused by the price decline of the aforementioned products reached 0.413 billion yuan in the first half of the year.

Caixin reporters noticed that as a refrigerant leader, Zhejiang Juhua has adopted a diversified business strategy, and has made a series of layouts around the upstream and downstream sectors of fluorochemicals, possessing a complete fluorochemical industry chain. However, in the context of the overall weakness of fluorochemicals this year and the refrigerant's outstanding performance, the diversified layout has instead dragged down the company's refrigerant performance.

In sharp contrast, Zhejiang Sanmei Chemical Industry (603379.SH), also based in Zhejiang, focuses on refrigerants as its core product. The company expects its net profit attributable to the mother in the first half of the year to increase by 157.19% to 234.35% year-on-year. Based on this performance forecast, its Q2 net profit attributable to the mother is expected to be between 0.176-0.276 billion yuan, far exceeding 0.151 billion yuan in the same period of 2022.