The sharp rise in the stock price of Peric Special Gases Co.,Ltd. (SH688146) is being fueled by a key raw material for chip manufacturing: tungsten hexafluoride. Since early April, the company's share price has surged over 700%, and as of June 10th, its static price-to-earnings ratio stands at a lofty 447.41 times. This rally stems from a narrative of a potential "supply gap": the storage chip industry has entered a high-growth cycle, while supply issues at some overseas tungsten hexafluoride producers have ignited strong expectations for domestic substitution. The company has indicated that some clients are in discussions for incremental orders. However, the realization of these subsequent collaborations and the scale of any orders remain uncertain. Against a backdrop of potential for domestic substitution on one side and repeated company warnings about the stock's deviation from fundamentals on the other, the question arises: is this multi-fold surge a discovery of value or an irrational bubble?
Understanding Tungsten Hexafluoride
According to company announcements, tungsten hexafluoride is an electronic specialty gas primarily used in the manufacturing of storage and logic chips. Technically, it plays a crucial role in connecting circuits during thin-film deposition processes, with its consumption directly correlating to the number of stacked layers. The more layers, the greater the amount used per chip. With the AI industry's explosive growth and accelerated iteration of integrated circuit processes, especially the increasing layer counts in 3D NAND, market demand for tungsten hexafluoride is rising daily.
Shifting Global Supply Dynamics
As industry prosperity continues, the global supply landscape for tungsten hexafluoride is quietly changing. Brokerage research reports indicate that in early April 2026, major global producers Kanto Denka Kogyo and Chuo Sangyo of Japan notified semiconductor clients, including Samsung, that their raw material inventories would only last until late May or June, with supply for the second half of the year unguaranteed. In April, the company also mentioned in investor interactions that "some overseas manufacturers have announced production halts for the second half of the year." In January 2026, China's Ministry of Commerce announced strengthened export controls on dual-use items (like tungsten products) to Japan. In May 2026, a State Council executive meeting reviewed and passed a draft implementation regulation for the Mineral Resources Law, stipulating protective mining measures such as planning control, total volume regulation, and restricted mining entities for specific strategic mineral resources designated by the State Council. The tightening overseas supply of upstream tungsten raw materials presents an incremental opportunity for domestic producers.
Assessing the Supply Gap
How significant is this potential "supply gap"? According to the company's IPO prospectus disclosed in February 2023, the combined tungsten hexafluoride capacity of Kanto Denka Kogyo and Chuo Sangyo was 2,100 tons; in 2020, Kanto Denka Kogyo held a 17% global market share. The company claims to operate the world's largest tungsten hexafluoride production base. On June 11th, a company representative stated that the current global annual capacity for tungsten hexafluoride is between 8,000 and 9,000 tons. The company itself possesses an annual capacity of 2,000 tons, with an additional 1,000-ton capacity under construction expected to become operational in Q1 or Q2 2027. Notably, prior to and including 2025, the company's tungsten hexafluoride production often operated below full capacity. For example, in 2025, production was 1,307.71 tons, representing a capacity utilization rate of approximately 65.4%.
The representative mentioned that recent discussions for increased orders involve both new and existing clients. Tungsten hexafluoride sees its largest usage in storage chips, with long-term clients including Micron, SK Hynix, Yangtze Memory Technologies, ChangXin Memory Technologies, and Intel. If these clients have new demands, they can place orders directly for normal delivery. However, the company has repeatedly stated in announcements that it has not yet signed any new, legally binding long-term or large-scale substantive order agreements. The finalization of subsequent collaborations, order sizes, product pricing, and their specific impact on operational performance all carry significant uncertainty.
Domestic Production Landscape
Currently, few companies in China have achieved mass production of tungsten hexafluoride. Besides the company, others include Haohua Gas (a subsidiary of Haohua Chemical Technology Co.,Ltd. SH600378) and Borui Zhongxiao. Recent information on investor platforms indicates Haohua Gas has an annual capacity of 600 tons. According to Haohua Chemical's announcements, tungsten hexafluoride product revenue accounted for 0.13% of its annual revenue in 2025, approximately 21.6957 million yuan. Borui Zhongxiao is a joint venture established by Zhejiang Borui Electronic Technology Co., Ltd. (a subsidiary of China Grand Micro SH688549) and Chuo Sangyo. According to China Grand Micro's announcements, Borui Zhongxiao currently has a capacity of 600 tons with no immediate expansion plans.
Price and Cost Trends
According to General Administration of Customs data, from January to April this year, the average export price of tungsten hexafluoride rose from $68.75/kg to $149.79/kg, an increase exceeding 100%. Concurrently, April's export volume was 53.975 tons, a month-on-month increase of 41.83%. While tungsten hexafluoride prices are rising, so are the costs of its upstream raw materials. According to the IPO prospectus, the company produces tungsten hexafluoride by reacting its self-produced nitrogen trifluoride with tungsten powder. The representative noted that tungsten powder prices rose continuously from the second half of 2025 through Q1 2026, stabilized and retreated after Q1, but remain higher than the same period in previous years. Due to rising raw material costs, the company reduced its finished tungsten hexafluoride inventory in 2025. However, the representative emphasized that the company's tungsten powder supply is currently unaffected—"it can be purchased with money"—and the company has also signed strategic cooperation agreements with several tungsten mining and resource companies.
Financial Performance and Pricing Strategy
In Q1 2026, the company reported revenue of 701 million yuan, a year-on-year increase of 36%, and net profit attributable to shareholders after deducting non-recurring gains and losses of 90.9812 million yuan, up 30.70% year-on-year. Benefiting from growing market demand, the company adjusted selling prices for some products. Additionally, net cash flow from operating activities decreased by 204.18% year-on-year during the reporting period, primarily due to increased payments for raw material stockpiling.
Amidst supply-demand adjustments, the company is working to shorten the price adjustment cycle for its tungsten hexafluoride products. In April 2026, during an investor relations event, the company stated that due to significant fluctuations in upstream raw material prices, the original annual price adjustment cycle could not adequately and timely reflect cost changes. The company is transitioning the adjustment cycle from annual to quarterly, with potential further evolution to monthly, aiming to make product prices more accurately reflect current supply-demand dynamics and cost variations.
Market Speculation and Company Clarification
Market rumors suggest the real-time market price for the company's 6N-grade high-purity tungsten hexafluoride, packaged in 47L cylinders for semiconductor applications, is approximately 2,000 to 2,500 yuan per kilogram. However, when queried, the representative stated the company has not publicly disclosed prices for individual products. On the evening of June 11th, the company issued another abnormal trading volatility announcement, clarifying it has not publicly disclosed information regarding tungsten hexafluoride product prices. Given that prices are influenced by multiple factors including market supply-demand, raw material costs, competitive landscape, and downstream industry trends, their volatility is uncertain. The company urged investors to be mindful of investment risks and avoid overestimating the impact of price fluctuations for a single product on company performance.
Broader Product Portfolio
The annual report shows that in 2025, electronic specialty gases accounted for approximately 86.56% of the company's revenue. Besides tungsten hexafluoride, this category includes nitrogen trifluoride, inorganic gases, mixed gases, and fluorocarbon gases. As of the end of 2025, the company possessed an annual nitrogen trifluoride capacity of 18,500 tons.
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