Finance Association, November 12 (Reporter Luo Yichen) “Since September, refrigerant export prices and the prices of some stagnant varieties have been rising at an accelerated pace. It is expected that the actual prices of fluorine refrigerant products will fully recover in the fourth quarter. Furthermore, some of the company's chemical products have experienced a decline of nearly two years and have begun to stabilize.” At the 2024 third quarter results briefing, Han Jinming, general manager of Juhua Co., Ltd. (600160.SH), looked forward to the Q4 market.

Benefiting from the settling of third-generation refrigerant quotas, the prices of several refrigerant varieties have been rising steadily. This refrigerant leader with a market capitalization of over 60 billion yuan has seen a sharp recovery in the past three quarters, but at the same time, the company's performance has been dragged down by the non-refrigerant business, causing many investors to question that its performance did not meet expectations. In this context, how to balance the two major refrigerant and non-refrigerant businesses has become an urgent problem for the company's management to solve.

According to reports, the company's non-refrigerant business reached a profit high in 2022. Product prices continued to drop sharply in the following two years. Corresponding to this, the refrigerant business strengthened sharply this year after experiencing adjustments in the previous two years. The unsynchronized boom in the two major business segments made it difficult to predict the performance of Juhua Co., Ltd.

According to Han Jinming, as the refrigerant business continues to strengthen and risks in the non-refrigerant business are released, the company's prospects next year will outweigh the challenges. At the performance briefing, he detailed the two major challenges and three opportunities he may face next year.

On the challenge side, Han Jinming acknowledged that, on the one hand, there is still significant uncertainty about the current situation and market; on the other hand, the conflict over capacity in the non-refrigerant business will be difficult to resolve in the short term, and competition will still be fierce.

However, at the same time, Han Jinming emphasized that next year's development of the company will also usher in three major opportunities. “First, the third-generation refrigerants will implement a quota system, and the upward trend will be established by the quota competition in previous years. It is expected that the average price of fluorine refrigerant products will continue to rise next year, and the business and profit ratio will further increase; second, the macro-level strengthening of countercyclical adjustment policies is expected to improve the company's external competitive environment; third, after nearly two years, the company's non-fluorinated refrigerant business has been fully released. At the same time, as the refrigerant business expands and the share of non-fluorine refrigerants increases, the share of non-fluorine refrigerants The refrigerant business versus the company's performance Influence has declined.”

Currently, among the main refrigerant varieties, the third-generation refrigerant R32 has received the most attention. According to data, Juhua Co., Ltd. and its subsidiary R32 have a total annual production capacity of 0.19 million tons. Currently, the nationally approved production quota accounts for 44.99% of the country, making it the absolute leader in this field.

Juhua Co., Ltd. acquired 51% of Zibo Feiyuan Chemical Co., Ltd.'s shares in Zibo Feiyuan Chemical Co., Ltd. at the end of last year at 1.394 billion yuan at the end of last year. The latter achieved operating income of 2.122 billion yuan and net profit of 0.297 billion yuan from January to October this year, which contributed to the performance of listed companies. At the meeting, when asked how to evaluate this merger and acquisition, the company's management replied, “This merger and acquisition has met expectations.”