Haima Motor Corporation's hydrogen energy business

With the wave of new energy vehicles sweeping the world, The Hainan Free Trade Port has also joined the fierce competition for new energy vehicles. A few days ago, the World New Energy Vehicle Experience Center project was held in Haikou City, Hainan Province, and the first opening area of the first phase of the project is expected to be put into operation in 2023.

At the same time, Haima Automobile Co., Ltd. (000527. SZ, hereinafter referred to as "Haima Automobile") has attracted market attention. Since the termination of cooperation with Mazda, Haima Automobile has continued to try to transform, and in the fourth venture that began in 2017, Haima Automobile used the dividends of the policy to bet on hydrogen energy vehicles for its new business.

Haima Automobile told the "China Business Daily" reporter that the company's water hydrogen production and high-pressure hydrogenation integration experimental device project has been completed, and hydrogen energy vehicles have entered the third generation of research and development stage. In terms of electric vehicles, Haima Motors plans to launch a new model based on the existing Haima 7X model in 2022.

At present, the market share of independent brands is rising, but the models launched by Haima Automobile have not brought obvious improvement, and in the fierce market competition, it remains to be seen whether Haima Automobile can make a comeback with the advantages of Hainan Free Trade Port. As of press time, the total market value of Haima Automobile is about 9.884 billion yuan.

Aiming for hydrogen-powered vehicles

Since the peak of the Fumeilai model, Haima Automobile has devoted itself to the development of the new four modernizations. After the era of new energy vehicles has entered a stage of rapid development, Haima Automobile, as a member of the domestic independent brand, is also developing its new energy sector business, especially hydrogen energy vehicles.

A few days ago, some investors raised relevant questions about Haima Automobile's hydrogen energy vehicle business, and Haima Automobile replied that Haima Automobile plans to gradually invest about 2,000 hydrogen energy vehicles for demonstration operation and promotion during the "14th Five-Year Plan" period. At present, the third generation of haima automobile hydrogen fuel cell vehicle prototype has been put into research and development, and the first model is a seven-seat MPV model.

The reporter then called the secretary of the board of directors of Haima Automobile on issues such as the development of hydrogen energy vehicles, and got a reply saying that in terms of hydrogen energy, the latest development of Haima Automobile is that the integrated experimental device project of water hydrogen production and high-pressure hydrogenation has been completed. According to reports, the project is the first integrated project of electrolysis of water hydrogen production and high-pressure hydrogenation in Hainan Province, which is mainly composed of hydrogen production equipment, multi-level hydrogen pressurization equipment, hydrogen storage equipment, etc., taking into account the future expansion and upgrading requirements.

In addition to the first hydrogen refueling station, Haima Automobile's layout of hydrogen energy continues. According to the plan, Haima Automobile Haikou Base will build a photovoltaic power station in the future, combined with Haima's third-generation hydrogen fuel cell vehicles, to achieve the emission cycle of "solar power generation, water electrolysis to hydrogen, and hydrogen for hydrogen vehicles". By the end of the "14th Five-Year Plan" period, Haima Motor plans to use its own funds and social capital to build five large-scale hydrogen refueling stations in Hainan Province.

However, it is worth noting that although the hydrogen refueling station, which cost nearly 20 million yuan, has been completed, there is currently no hydrogen fuel cell vehicle officially operated in Hainan Province. At present, the manufacturing cost and maintenance cost of hydrogen energy vehicles are still at a high level, the cost of producing a hydrogen fuel cell passenger car is twice that of electric vehicles, and the operation and maintenance costs and hydrogen costs of hydrogen refueling stations are not cheap.

Based on this, many car companies, including Mercedes-Benz and Hyundai Motor, had to suspend their hydrogen energy passenger car plans. Similarly, when the reporter asked when the hydrogen energy vehicle will be mass-produced and listed, Haima Automobile did not give a clear time, only saying that there are second-generation hydrogen energy vehicle samples, and the third-generation hydrogen energy vehicle is still in the research and development stage.

Putting aside the question of the mass production and listing of hydrogen energy vehicles, in terms of new energy vehicles, the official website of Haima Automobile shows that the current Haima automobile new energy vehicles include three models of the Aishang series, the Haima 6P plug-in series, the Haima E3, E5, E7, etc., and the models are involved in SUVs, cars, MPVs and other ranges, which are more comprehensive.

In the first half of 2021, Haima Automobile's sales have rebounded to a certain extent under the leadership of 7X, 8S, 6P and other products. According to the latest data, Haima Automobile's cumulative sales from January to December 2021 were about 29,500 units, up 67.01% year-on-year, and there is still room for improvement.

Production up 76.77% year-on-year

As sales rose year-on-year, Haima Motor's cumulative production from January to December 2021 increased by 76.77% year-on-year to approximately 29,700 units. It is understood that the annual production capacity of Haima Automobile Haikou Base has been expanded to 250,000 units in 2021, far exceeding the output of Haima Automobile in 2021.

In addition, investors questioned whether Haima Automobile's Zhengzhou factory was in a state of suspension or semi-suspension, to which Haima Automobile responded that the company's operation has always been based on Haima brand automobile products, and the Haikou base and Zhengzhou base are operating normally.

It is worth mentioning that Haima Automobile said that it will cooperate with Xiaopeng Automobile in the production until the end of 2021, and another source said that the two parties agreed in the contract that after the expiration of the contract, "if there is no objection between the two parties, the contract will continue to take effect". But Haima Motors did not explicitly respond to whether it would automatically extend the cooperation for 5 years.

According to public data, from 2017 to 2020, Haima Automobile's revenue continued to decline over the years, about 9.683 billion yuan, 5.047 billion yuan, 4.690 billion yuan and 1.375 billion yuan, respectively. At the same time, the net profit attributable to the shareholders of the listed company was about -994 million yuan, -1.637 billion yuan, 85 million yuan and -1.335 billion yuan, respectively, and turned a loss into a profit in 2019.

However, a good trend is that due to the change in the accounting standards for foundry income, Haima Automobile's third quarter 2021 financial report revenue has been excluded from Xiaopeng Automobile's foundry income, while Haima Automobile's revenue in the first three quarters of 2021 increased by 22.63% year-on-year. Various financial data show that Haima Automobile is still looking forward to achieving transformation through its own brand.

Another investor revealed that Haima Automobile's Annual Meeting on New Year's Day reported sales of 1.53 billion yuan in 2021 and achieved profitability at the same time. Haima Automobile said that the 2021 annual performance forecast is to be disclosed at the end of January 2022.

Can we seize the policy outlet?

With the blessing of the unique natural environment advantages of Hainan Province, technologies such as water to hydrogen production have been vigorously developed, and many companies have aimed at the opportunity to lay out hydrogen energy vehicle business in Hainan Province. Hunan Kemet Gas Co., Ltd. (hereinafter referred to as "Kemet") said that the petrochemical Hainan Refining and Chemical Hydrogen Kemet Filling Station project in the first hydrogen filling station project in Hainan Province has reached the national standard for the use of hydrogen in hydrogen fuel cell vehicles, which will help the construction of Hainan Hydrogen Energy Island.

Since 2016, Hainan Province has successively issued a number of relevant guidance documents around the development of new energy vehicles, in 2019, it is proposed that by 2030, Hainan Province will completely ban the sale of fuel vehicles; in July 2021, the "14th Five-Year Development Plan for High-tech Industries in Hainan Province" proposed to develop renewable energy hydrogen production such as wind power hydrogen production, hydropower hydrogen production and nuclear power hydrogen production, and take the lead in launching hydrogen energy application demonstrations in transportation fields such as automobiles to effectively meet the transportation travel of clean energy vehicles.

However, the world new energy vehicle experience center built in Hainan Province is not clear whether there is a figure of Haima Automobile for the time being, for the relevant questions of investors, Haima Automobile only said that the company has built a Haima new energy vehicle experience center in Haikou, Sanya, Danzhou and other places and put into operation.

From the government subsidies of Haima Automobile over the years, it is not difficult to see the strong support of Hainan Province, in 2021, China FAW Motor Co., Ltd. will transfer 49% of the equity held by FAW Haima to Hainan Development Holding Co., Ltd. free of charge, and the more independent Haima Automobile has received more attention from the market.

It is worth noting that at present, Haima Automobile is not a bonded enterprise, for which Haima Automobile said that the company is actively paying attention to and continuing to follow up the relevant preferential policies of Hainan Free Trade Port, and strive to enjoy relevant preferential policies and contribute to the development of the new energy automobile industry in Hainan Province.

Near the end of the year, Haima Motor wants to find another way to increase net profit. According to the announcement, Haima Finance Co., Ltd., a holding subsidiary of Haima Automobile, intends to transfer its 7% equity in Hainan Bank Co., Ltd. to China Railway Investment Co., Ltd. However, the transaction was not approved by the Hainan Regulatory Bureau of the China Banking and Insurance Regulatory Commission.

Looking forward to 2022, Hainan Province plans to promote more than 35,000 new energy vehicles, focus on promoting the construction of projects such as the World New Energy Vehicle Experience Center, and explore the demonstration pilot of hydrogen fuel cell vehicles. Whether Haima Automobile can seize the opportunity to break through successfully remains to be seen.

(Editor: Zhao Yi Proofreader: Zhang Guogang)