First Shanghai: Maintaining Dongyue Group's (00189) “Buy” rating target price of HK$18.9

The Zhitong Finance App learned that First Shanghai released a research report stating that it maintains Dongyue Group (00189)'s “buy” rating and predicts that the company's revenue for 2025-2027 will be 16.09 billion yuan/17.47 billion yuan/18.15 billion yuan respectively; net profit will be 1.90 billion yuan/2.58 billion yuan/2.81 billion yuan, respectively. The company was given 15xPE in 2025, with a target price of HK$18.9, with room for an increase of 57.5% compared to the current price.

First, the main views of Shanghai are as follows:

Profit for the first half of the year exceeded expectations

The company achieved revenue of 7.46 billion yuan (RMB, same below) in the first half of 2025, up 2.8% year on year; gross margin was 29.1%, up nearly 9.3 percentage points year on year; net profit to mother was 780 million yuan, up 153.3% year on year, slightly higher than the company's profit forecast.

Refrigerants remain booming, and prices continue to rise

The Group's refrigerant business grew rapidly and became an important support for the company's performance. Revenue of 2.29 billion yuan was achieved in the first half of 2025, an increase of 47.7% over the previous year. Profit was 1.03 billion yuan, up 209.8% year on year. The division profit margin was 44.9%, up 23.5 percentage points year on year, mainly due to the significant increase in prices of major products such as R32, R22, and R410a. Currently, as of September 12, the price of second-generation refrigerant R22 is 34,500 yuan/ton, up 2,500 yuan/ton from the beginning of the year. In terms of third-generation refrigerants, the price of R134a was 52,000 yuan/ton, up 500 yuan/ton from the beginning of September; the price of R32 was 61,500 yuan/ton, up 1,500 yuan/ton from the beginning of September, and more than 18,000 yuan/ton from the beginning of the year. As the refrigerant quota reduction policy continues to be implemented, the refrigerant supply side is limited, and demand for air conditioners and automobiles is still relatively strong. The bank expects refrigerants to continue to be booming.

Fluoropolymers and silicones are still under pressure

The downstream demand side for fluoropolymer materials is still weak, and product prices have declined further compared to last year. Despite this, the company's competitive advantage in this field is still outstanding: the product quality is superior to the industry average, the price is higher than similar products in the market, and the performance remains strong and resilient during the market downturn. The first half of the year achieved revenue of 1.94 billion yuan, a year-on-year decrease of 4.6%; segment profit of 260 million yuan, with a division profit margin of 13.4% (14.9% in the same period last year). The bank expects a good recovery in this segment as the expansion of industry production gradually comes to an end, compounding the demand for fluoropolymer products in the emerging industry chain. On the silicone side, due to multiple factors such as the concentrated release of new production capacity, weak demand for downstream terminals, and the international trade environment, there was a serious imbalance between market supply and demand, and product prices declined, leading to a decrease in the division's external sales revenue and performance. Revenue for the first half of the year was 2.76 billion yuan, down 15.9% year on year; segment profit was 8.75 million yuan, down 83.7% year on year, and segment profit margin was 0.38% (1.95% for the same period last year).