The hydrogen energy track ran out of a “dark horse”, and the IPO of Jiehydro Technology Science and Technology Innovation Board was accepted

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The “Little Giant of Science and Technology Innovation” of SAIC Group has finally taken the first step in landing on the Science and Technology Innovation Board.

On June 28, Shanghai Jie Hydrogen Technology Co., Ltd. (hereinafter referred to as “Jie Hydrogen Technology”), a subsidiary of SAIC Motor, disclosed its prospectus on the Shanghai Stock Exchange and plans to apply for listing on the Science and Technology Innovation Board. After the completion of the spin-off and listing, SAIC Group’s shareholding structure will not change, and it will still maintain control over JieHydrogen Technology.

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According to public information, JieHydrogen Technology was established on June 27, 2018. It is a company under the SAIC Group that focuses on hydrogen fuel cells. The company is committed to providing fuel cell products and engineering services for the industry, and has completed a variety of fuel cell stacks. And product development of fuel cell systems, with power ranging from 6kW to 260kW, and used in passenger cars, light buses, city buses, highway buses, light, medium and heavy trucks, locomotives, forklifts, trailers and many other fields.

Just four years after its establishment, the superimposed hydrogen energy track is still in the early stage of development. Even with SAIC as its backer, JieHydrogen’s landing on the Science and Technology Innovation Board seems to be a bit “pressured”.

How to make money?

Since last year, there has been news that JieHydrogen Technology plans to spin off and go public, and SAIC Group has also publicly claimed on many occasions that it will “split off a group of subsidiaries for listing”.

In May of this year, SAIC Group officially passed the proposal for the spin-off and listing of JieHydrogen, making JieHydrogen the first subsidiary of a state-owned automobile group to initiate a spin-off and listing.

As a board dedicated to serving technology-based and innovative small and medium-sized enterprises, the Science and Technology Innovation Board has high threshold restrictions on the scientific and technological innovation and R&D capabilities of enterprises. As a pioneer of the hydrogen energy track, JieHydrogen is very in line with the “personality” of the Science and Technology Innovation Board.

According to the prospectus, the research and development expenses of Jiehydro Technology in the past three years were 29.3895 million yuan, 94.7635 million yuan and 112 million yuan respectively, and the cumulative research and development expenses were 237 million yuan, accounting for 25.01% of the cumulative operating income in the past three years. As of December 31, 2021, the company has a total of 121 R&D personnel, accounting for 54.26% of the total number of employees.

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High R&D investment, established for four years, focusing on hydrogen energy and the Science and Technology Innovation Board, these words seem to be difficult to think about without losing money.

It is true that Jiehydro Technology has not achieved profitability at present, and has been relying on external “blood transfusion” to survive. In 2019, 2020 and 2021, the operating income of Jie Hydrogen Technology was 112 million yuan, 247 million yuan and 587 million yuan respectively, and the net profit attributable to the owner of the parent company was 34.8781 million yuan, 94.2648 million yuan and 58.7503 million yuan respectively. Yuan.

In 2021, JieHydrogen’s losses seem to have decreased, but it is worth noting that its R&D expenses in 2021 will only increase by 17.7273 million yuan compared with 2020. The ratio of R&D investment to operating income also dropped to 19.16%.

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Judging from the status quo of hydrogen energy development in my country and even in the world, since it has chosen to focus on the hydrogen energy track, losses are expected, and it may be difficult to reverse in a short period of time.

According to statistics from Flush, as of June, 16 of the 282 companies listed on the Science and Technology Innovation Board are unprofitable companies. If the listing of JieHydrogen Technology goes smoothly, this number may become “17”.

Take Yihuatong, the hydrogen energy “predecessor” of the Science and Technology Innovation Board as an example. Yihuatong was listed on the Science and Technology Innovation Board on August 10, 2020, and it is still in a loss state for two years after its listing. The compound annual growth rate of Yihuatong’s total operating income in the past three years is 19.54%, but the compound annual growth rate of net profit in the past three years is -291.34%.

Yihuatong’s main operating income is divided into three categories: fuel cell systems, components, technology development and services. Among them, the fuel cell system accounted for 82.31% of the operating income and was the main source of income.

In the prospectus of JieHydrogen Technology, its main operating income is fuel cell systems, system sub-assemblies, fuel cell stacks, components and technical services. The current largest source of operating income is also fuel cell systems. This also means that after the listing of JieHydrogen, it is very likely to repeat the old path of Yihuatong.

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However, JieHydrogen Technology still has a “killer” – fuel cell stack.

The fuel cell stack is the core part of the fuel cell power system, where the electrochemical reaction of hydrogen and oxygen occurs to generate electricity. The multi-layer membrane electrodes and bipolar plates are alternately stacked, and seals are embedded between the monomers, which are pressed and fastened by the end plates on both sides to form a fuel cell stack.

At present, Hydrogen Technology has successfully completed the R&D and mass production of PROME M3 fuel cell stack platform products and PROME P3 fuel cell system platform products.

The goal set by JieHydrogen Technology is also very accurate, “to reach the first domestic fuel cell stack power shipment during the 14th Five-Year Plan period”.

In addition, according to the prospectus, the proportion of the fuel cell stack revenue of JieHydrogen Technology to the total revenue has also increased year by year. If JieHydrogen Technology achieves profitability in the future, its investment in fuel cell stacks is bound to contribute.

However, it is still necessary to see that on the fuel cell stack, companies such as Guohong Hydrogen Energy, Hydrogen Pure Energy, and Vision Technology have been rooted in the market for many years and have strong strength. It may not be easy to gain market share among these companies.

the track is tough

If the hydrogen energy track wants to be profitable, it is not achievable by the technical efforts of a single enterprise, but requires the entire industry and the social and policy levels to move forward together.

At present, although many companies are actively deploying, they are basically in a “thankful” situation where they invest in funds for a long time and receive no return.

The high cost of hydrogen production, storage and transportation has become a commonplace. The domestic hydrogen energy market is also faced with three major problems: shortage of core technologies and materials, less infrastructure construction such as hydrogen refueling stations, and limited policy incentives.

From the perspective of policy incentives alone, my country’s policies at this stage basically only focus on hydrogen fuel cell vehicles, and the driving effect on hydrogen energy technology innovation is very limited. If there is no substantial progress in technology, hydrogen fuel vehicles may be just empty talk if they want to receive policy subsidies on a large scale.

Even so, the advantages of hydrogen energy are obvious. In the context of dual carbon, such a clean, efficient, flexible and widely used energy carrier is naturally placed in high hopes by all parties.

The layout of each enterprise is like a stone thrown into a broad river. Although there is not much splash, the continuous investment has become a tacit understanding.

Not only SAIC, but also state-owned automobile groups such as Dongfeng, Great Wall, Changan, and BYD have basically bet on the hydrogen energy track.

At the 2020 Beijing Auto Show, Dongfeng displayed its first hydrogen fuel cell vehicle, the hydrogen boat e·H2, and announced the establishment of a hydrogen energy sub-brand “Dongfeng Hydrogen Boat”.

This year, Changan Automobile launched my country’s first mass-produced hydrogen fuel cell car, the Deep Blue SL03 Hydrogen Energy Edition, and opened pre-sale.

Great Wall Motors is deploying the entire industry chain of hydrogen energy, and intends to establish a complete ecology of “hydrogen production-hydrogen storage-transportation-hydrogenation-application”. In addition, Great Wall has also established Wei Shi Energy to be responsible for the development of the company’s hydrogen energy business.

For the automotive industry, hydrogen energy represents the future and is an indispensable piece of the puzzle. But the status quo of hydrogen energy “burning money and not making a profit” makes people love and hate.

As the first subsidiary company in the state-owned automobile group to start the spin-off and listing, JieHydrogen Technology has made a good start for the industry. The spin-off and listing of the hydrogen energy subsidiary will be self-financing, which will not drag down the parent company’s financial report, but also raise funds to accelerate development. It seems to be an excellent choice.

The spin-off and listing of JieHydrogen Technology is actually part of SAIC’s market-oriented reform. At this stage, SAIC Motor’s Zero Beam Technology has been restructured into a subsidiary, while Feifan Motors is operating independently. According to Zu Sijie, vice president and chief engineer of SAIC Motor, its subsidiaries Zhonghaiting and Lianchuang Electronics will also be spun off and listed.

Therefore, the listing of JieHydrogen Technology is of pioneering significance. If the financing of JieHydrogen Technology goes smoothly after the listing, the business opens up and even becomes profitable, it is not impossible for other state-owned automobile groups to spin off many of their businesses.

Whether JieHydrogen Technology can play the role of a “leader” remains to be seen.

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