Jinhong Gas

Jinhong Gas is China's largest privately owned integrated industrial-gas company. Its sales have ranked first among private gas companies in the China Industrial Gases Industry Association statistics for many years. It sells three things. The first is bulk gases (oxygen, nitrogen, argon, carbon dioxide, acetylene), delivered in cylinders and as liquid through a dense retail network centred on the Yangtze River Delta. The second is specialty and electronic gases: 7N ultra-pure ammonia, high-purity nitrous oxide, high-purity hydrogen, high-purity CO₂, electronic-grade TEOS, a growing fluorinated-etchant range, and helium. The third is long-term on-site supply: air-separation units for steel and chemical customers, and electronic bulk carrier-gas plants for semiconductor and display fabs. The company is moving from cylinder-and-tanker retail towards a hybrid model. That model combines retail density with take-or-pay on-site contracts, a contracted backlog that reached about CNY 8.8 billion in total value, and a vertically integrated helium supply chain. Since 2024 the shift has squeezed earnings through depreciation, interest and acquisition impairments. In return it has built a contracted, more cyclically resilient revenue base. In the global helium shock of 2026 it also gave the company a strategically valuable domestic helium supply position.

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What the company does. Jinhong Gas researches, produces, sells and services industrial gases. Its IPO prospectus already described a portfolio of more than 100 gas types across specialty gases, bulk gases and natural gas, sold to customers in electronics and semiconductors, photovoltaics, LED and display, optical fibre, healthcare, steel, chemicals, new energy, food and beverage, and general manufacturing. Management describes the company as a "comprehensive gas service provider" offering one-stop gas supply solutions.

Reporting lines (FY2025 annual report). Main-business revenue is split into four lines:

Bulk gases: (44.2% of FY2025 main-business revenue): oxygen, nitrogen, argon, carbon dioxide and acetylene, supplied as liquid in bulk tankers, in cylinders, and through gas stations. This is the largest line, and management calls it the company's "ballast stone".

Specialty gases: (33.6%): ultra-pure ammonia, high-purity nitrous oxide, electronic-grade tetraethyl orthosilicate (TEOS), high-purity CO₂, high-purity hydrogen, helium, and newer fluorinated electronic gases (C₄F₆, C₄F₈, CH₃F). It also includes the electronic bulk carrier-gas service for fabs.

On-site gas generation and rental: (13.5%): long-term air-separation and nitrogen-generation plants built on or beside customer sites, plus equipment rental. Contracts typically run 15–20 years.

Gas / clean fuel (燃气): (8.7%): legacy natural-gas and clean-fuel distribution.

Revenue model. Product sales dominate. Bulk and specialty gases are sold per unit (per kilogram, cubic metre or cylinder), under framework supply agreements for large accounts and spot pricing for small customers. On-site supply is a service-like, contracted model with long-dated take-or-pay structures. These typically combine a fixed facility charge with a variable gas charge, priced to recover the plant investment over the contract life. Cylinder rental is a small recurring rental stream. In 2026 the company also booked some electronic bulk carrier-gas installations as finance leases. This produced about CNY 40 million of asset-disposal gains in H1 2026, so revenue recognition in that business now mixes lease and service accounting. There is no meaningful licensing or subscription revenue.

Value-chain position. Jinhong works in the midstream and downstream of the gas value chain. Upstream it buys crude ammonia, raw CO₂ streams, electricity (the dominant cost of air separation), liquid argon and nitrogen from third-party air-separation plants, and imported helium. It then:

• purifies these into electronic grades;

• produces liquid gases in its own air-separation units;

• fills cylinders and tube trailers;

• runs a logistics fleet of tankers, cylinder trucks and tube trailers;

• operates on-site plants.

Its competitive moat rests on four things: regional distribution density and safety licences; purification know-how for electronic-grade products; customer qualification, which is long and costly for semiconductor fabs; and the capital already sunk into on-site plants.

Customer types and end markets. Customers range from thousands of small and medium manufacturers served by retail cylinders to large integrated-circuit makers. In semiconductors these include SMIC, an advanced-process logic fab in Beijing, SK Hynix's Wuxi and Dalian fabs, the Beijing North IC Technology Innovation Center, Guangdong Xinyueneng, CR Micro, Tianma and Laibao. Other large customers include optical-fibre groups (Hengtong, Sumitomo Electric), battery makers (CATL, supplied with high-purity helium since Q1 2026), photovoltaic and LED producers, and heavy industry for on-site supply (Yunnan Chenggang, Jishan Mingfu Steel, Jingjiang Special Steel, Yingkou Jianfa, Shandong Ruilin Polymer, Jiangsu Huaihe Chemical, CIMC Green Energy in Zhanjiang). In 2025 the company added more than 20 semiconductor customers, and in H1 2026 its integrated-circuit revenue grew 29.56% year on year.

Company's own description. In its 2025 annual report, management describes 2025 in three parts:

• Bulk retail: the company "wove a nationwide network" through new stations and regional M&A, entering Southeast Asia through the acquisition of Singapore's CHEM-GAS.

• Specialty gases: it focused on "national strategic tracks" (semiconductors and new energy), building on import substitution of existing products while trial-producing several new products and breaking into overseas markets.

• Helium: it is building a "globalised, self-controlled" supply system.

On-site gas is presented as the "operational stabiliser".

Independent characterisation. Jinhong is best understood as a regional Chinese packaged-and-liquid gas distributor that has grafted on two higher-value businesses: electronic specialty gases and long-term on-site supply. Its electronic-gas franchise is concentrated. Ultra-pure ammonia, the flagship, is largely sold into LED, display and photovoltaic nitride deposition, where oversupply and price competition in 2024–2025 compressed specialty-gas margins sharply. The average specialty-gas price fell from CNY 5.71/kg in 2023 to CNY 3.68/kg in 2024, and segment gross margin dropped from 40.36% to 27.69%. The strategic pivot to semiconductor-grade fluorinated etchants, fab carrier gases, helium and on-site ASUs is real and well funded. However, it has front-loaded capex (CNY 0.98–1.07 billion a year in 2023–2025) and depreciation ahead of revenue, so returns on capital have fallen to cyclical lows. The 2026 helium shock gave the company an unexpected tailwind that the market priced aggressively.

Stated strategy (FY2025 annual report and 2026 "Quality, Efficiency and Returns" action plan). Management frames the strategy as three coordinated businesses plus a resource play:

1. "Ballast stone" bulk retail. Expand horizontally through new stations and M&A, consolidate the Yangtze River Delta, enter new regions and Southeast Asia, raise liquid self-sufficiency, and digitise logistics and quality control.

2. "Growth potential" specialty gases. Focus on the "national strategic tracks" of semiconductors and new energy. Extend import substitution into high-end fluorinated etchants and precursors (C₄F₆, C₄F₈, CH₃F, disilane, dichlorosilane), deepen relationships with leading fabs, offer full-chain electronic bulk carrier-gas service, and expand overseas.

3. "Stabiliser" on-site generation. Pursue large ASU contracts with steel, chemical and new-energy customers on 15–20-year terms, and take the model abroad (Thailand, Spain).

4. Helium security. Build a dual-source system of "overseas direct procurement plus domestic production": the Jinhong Puhua JV with a global oil and gas major, re-negotiated Russian volumes, and the Alar BOG extraction plant. The aim is for helium to serve as a strategic national-supply asset as well as a profit centre.

Initiatives of the last 24 months.

Yingkou Jianfa 66,000 Nm³/h ASU: Date: Contract March 2024; Detail: About CNY 2.4 bn over 20 years; trial production targeted around end-2026

Thailand on-site project: Date: December 2024; Detail: First overseas on-site win

Zhanjiang company / CIMC Green Energy: Date: February 2025; Detail: New-energy on-site supply

CHEM-GAS acquisition, Singapore: Date: Completed March 2025; Detail: Southeast Asian bulk retail platform

Alar BOG helium project: Date: Agreement June 2025; Detail: Commissioning in H2 2026; gaseous and liquid helium

Hanxing Gas and Huai'an Shengma acquisitions: Date: 2025; Detail: On-site engineering capability and East China capacity; brought in the current GM

Spain new-energy materials on-site project: Date: Signed 2025; Detail: First European project, under construction

• More than 20 new semiconductor customers; first overseas specialty-gas sales — Date: 2025; Detail: Customer diversification

Shareholder-return programme: Date: 2024–2026; Detail: First interim dividend in 2024; 2025 final dividend raised to CNY 2.50 per 10 shares; 2026 interim dividend skipped

Early redemption of convertible: Date: March–April 2026; Detail: Deleveraging; about CNY 1.0 bn converted to equity

Beijing Jinhong Puhua JV: Date: H1 2026; Detail: Long-term overseas helium supply agreements

Shanghai Zemu acquisition: Date: H1 2026; Detail: East China retail density

2026 restricted share plan: Date: June 2026; Detail: 5.88 M shares; revenue and profit vesting hurdles

Electronic-grade dichlorosilane: Date: 2026; Detail: Trial production complete; 200 t/yr planned

Taizhou Guangming station: Date: October 2026; Detail: Bulk retail capacity

Sustainability-linked initiatives. CO₂ capture and recovery projects (part of the convertible use of proceeds), hydrogen production projects, and on-site ASUs that replace less efficient merchant-liquid supply for steel customers.

Medium-term targets. Management has not published formal revenue or margin guidance. The vesting hurdles of the 2026 restricted-share plan are the clearest stated targets: 2026 revenue of CNY 3.19 billion or net profit of CNY 185 million, and 2027 revenue of CNY 3.61 billion or net profit of CNY 211 million. At the April 2026 shareholders' meeting, management also said it expects 2026 helium sales volume to roughly double year on year.

Specialty and electronic gases

Electronic bulk carrier gas (电子大宗载气)

The company designs, builds and operates on-site nitrogen, oxygen, argon, hydrogen and helium supply systems (bulk gas yards, purifiers and pipelines) for wafer fabs and display lines, on contracts of about 15 years. Named projects:

Bulk gases

Bulk gases are sold through a network of retail stations concentrated in Suzhou and the wider Yangtze River Delta, extended into Central China (Hunan, Hubei), North China (Tianjin, Shanxi), Chongqing and, since 2025, Singapore. In 2024 the company produced 514,800 tonnes of bulk gas (up 81.8%) and sold 956,000 tonnes (up 54.3%).

On-site gas generation and rental

At the end of 2024 the major on-site and electronic bulk contracts were worth about CNY 8.8 billion in total, with CNY 8.58 billion still to be performed.

Gas / clean fuel

The company distributes natural gas and clean fuels through subsidiaries such as Jiangsu Jinhualong Gas Development. FY2024 revenue was CNY 213 million at an 18.08% gross margin. This is a legacy, low-growth line.

Services

Services include gas testing and inspection (Suzhou Jinhong Inspection & Testing Technology), logistics (Jiaxing Jinhong Logistics, Chongqing Jinsu Transport, Changsha Jinhong Mande Logistics), cylinder rental, and intelligent remote monitoring of customer tanks.