On November 22, 2022, Guohong Hydrogen Energy Technology (Jiaxing) Co., Ltd. (hereinafter referred to as "Guohong Hydrogen Energy") submitted to the main board of the Hong Kong Stock Exchange. This is another domestic hydrogen fuel cell company that intends to raise blood through the Hong Kong capital market after Yihuatong, the "first hydrogen energy share", obtained an IPO pass in Hong Kong on October 22.
Guohong Hydrogen Energy stated in the prospectus that the company is a leading technology hydrogen fuel cell company focusing on the research, development, production and sales of hydrogen fuel cell stacks and hydrogen fuel cell systems. Since its establishment, through continuous scientific and technological innovation and product iteration, the company has effectively promoted the transformation of China's hydrogen fuel cell industry and the innovative development and commercialization of hydrogen energy technology.
According to the shipment volume of hydrogen fuel cell stacks, from 2017 to 2021, for five consecutive years, Guohong Hydrogen Energy ranked first in the Chinese market, and in terms of shipments of hydrogen fuel cell systems equipped with self-produced stacks, the company ranked first in the Chinese market in 2021. According to the shipment volume of hydrogen fuel cell stacks and the shipments of hydrogen fuel cell systems equipped with self-produced hydrogen fuel cell stacks, the company occupies 24.1% and 21.2% of the Chinese market, respectively.
According to reports, as of the time of the prospectus, the company's hydrogen fuel cell stack shipments have exceeded 450 MW, and in the third quarter of 2022, the company delivered a total of 25.1 MW of hydrogen fuel cell systems, an increase of 109% over the same period. The company's hydrogen fuel cell stacks and battery systems are widely used in buses, heavy trucks, logistics vehicles, forklifts, rail transit and ships, as well as fixed applications such as distributed generation and backup power generation.
Losses for two and a half consecutive years, high concentration of large customers, low capacity utilization
The financial figures on the prospectus show that Guohong Hydrogen Energy is still in the entrepreneurial climbing period and urgently needs blood transfusion in the capital market.
From the perspective of revenue, Guohong Hydrogen Energy has been in a loss state for three consecutive years. In the first half of 2019, 2020, 2021 and 2022, the company's revenue was 366 million yuan, 227 million yuan, 457 million yuan and 190 million yuan, respectively. In addition to the net profit of 21 million yuan in 2019, the company's net profit was 221 million yuan, 703 million yuan and 151 million yuan, respectively.
The company said that while product sales and revenue may continue to support the hydrogen vehicle industry due to continued favorable government policies, it is likely to continue to lose money until the company obtains enough purchase orders and expands sales to economies of scale that allow it to be profitable.
During the reporting period, the comprehensive gross profit margins reflecting the company's profitability were 30.4%, 3.5%, 27.9% and 18.6%, respectively.
In terms of the company's cash flow, in 2019, 2020, 2021 and the first half of 2022, the net cash generated by the company's operating activities was -13.69 million yuan, -86.63 million yuan, -561 million yuan and -47.42 million yuan, and the amount of cash generated by investment activities was -18.14 million yuan, -65.78 million yuan, -232 million yuan and -278 million yuan.
In addition, it is important to note that the company relies on several major customers for most of its revenue. In 2019, 2020, 2021 and the first half of 2022, the revenue contributed by the largest customers was 124 million yuan, 112 million yuan, 245 million yuan and 71 million yuan, respectively. The revenue contributed by the Company's top five customers was $346 million, $217 million, $402 million and $183 million respectively, accounting for 94.4%, 95.7%, 88.1% and 96.6% of the total revenue.
In the first half of 2019, 2020, 2021 and 2022, the company's accounts receivable reached 300 million yuan, 288 million yuan, 649 million yuan and 725 million yuan, and the number of accounts receivable turnover days was 222 days, 495 days, 430 days and 769 days respectively.
In terms of capacity utilization, because hydrogen fuel cells have not yet achieved commercial application, the market demand for products is insufficient or unstable, and the company's capacity utilization rate is low. During the Reporting Period, the utilization rates of the Company's hydrogen fuel cell stacks were 21.1%, 27.2%, 78.8% and 48.6%, and the utilization rates of hydrogen fuel cell systems were 0, 29.6%, 61.1% and 20.5%, respectively.
In terms of product prices, according to Frost & Sullivan's statistics, the average price of hydrogen fuel cell stacks in China decreased from about RMB 10,500 / kW in 2017 to 2,400 yuan / kW in 2021, with a compound annual growth rate of about -30.9%, while the average price of hydrogen fuel cell systems in China decreased from about RMB 16,400 / kW in 2017 to about RMB 5,100 / kW in 2021, with a compound annual growth rate of -25.3%. In addition, according to analysis, the average price of hydrogen fuel cell stacks and hydrogen fuel cell systems is expected to further decline due to technological breakthroughs and large-scale production.
In terms of R&D investment, the company said that it led and participated in the formulation of more than 10 national and industry standards related to the hydrogen fuel cell industry, including the "vehicle proton exchange membrane stack service life test and evaluation method" and so on. In 2019, 2020, 2021 and the first half of 2022, the company incurred R&D expenses of 34.7 million yuan, 35.9 million yuan, 72 million yuan and 49.2 million yuan, respectively, accounting for 9.5%, 15.8%, 15.8% and 25.9% of the company's revenue in the same year or the same period.
The entrepreneurial road of hydrogen energy "unicorn" Guohong hydrogen energy
Since the development of Guohong hydrogen energy, it has completed the transformation from technical overseas purchase to domestic production.
According to previous media reports, in 2013, Ma Dongsheng, the founder of Guohong Hydrogen Energy, established Bikong Hydrogen Energy in Nantong, Jiangsu Province, an enterprise engaged in the research and development, production and sales of hydrogen fuel cells and system control equipment. Subsequently, Foshan and Yunfu in Guangdong Province issued policies to focus on the development of hydrogen energy industry, and Ma Dongsheng saw the opportunity and turned south.
In May 2015, Ma Dongsheng and Foshan Auto Transport jointly invested in the establishment of Guangdong Hongyun Hydrogen Energy Technology Co., Ltd. The following month, the company joined hands with Guangdong Foshan (Yunfu) Industrial Transfer Industrial Park Investment and Development Co., Ltd. to jointly invest in the establishment of Guangdong Guohong Hydrogen Energy Technology Co., Ltd., with a registered capital of 200 million yuan, of which Hongyun Hydrogen Energy holds 41% of the shares, making it the largest shareholder.
Soon after its establishment, the company received an order for 300 hydrogen fuel vehicles from the local government. Subsequently, Guohong Hydrogen Energy cooperated with Ballard, the head enterprise of Canadian hydrogen fuel cells, and the two sides established a joint venture, and Guohong Hydrogen Energy purchased Ballard's most advanced technology at that time - 9SSL stack, and obtained Ballard's 20,000 units / year production line construction technical support. Since then, Guohong Hydrogen Energy has rapidly expanded its market in Yunfu, Foshan, Shanghai and other places.
Since 2016, Guohong Hydrogen Energy has begun to independently develop hydrogen fuel cell products. In the same year, Yan Xiqiang, the leader of hydrogen fuel stack technology research and development, Liu Zhixiang, the leader of hydrogen fuel system technology research and development, and a group of domestic and foreign hydrogen fuel cell experts joined the company. Among them, Liu Zhixiang is a special expert, and as the technical leader, he has successfully developed the first fuel cell locomotive in mainland China and the world's first commercial fuel cell/supercapacitor hybrid tram.
Today, Guohong Hydrogen Energy has built the world's largest commercial fuel cell stack production line and system production line, taking the lead in realizing the mass production of low-cost flexible expansion graphite bipolar plates, self-developed Hongxin GI stack from the end of 2020 began mass production, the company successfully developed and launched a new generation of battery stack Hongxin GIII in April 2022, put into production in July 2022. According to reports, Hongxin GIII is a high-power molded flexible graphite bipolar plate hydrogen fuel cell stack, with a single stack with a power of more than 200 kilowatts.
Among the company's products, the sales revenue of its earlier purchased 9SSL stack and hydrogen fuel cell system using 9SSL stack continued to decline, and the proportion of total revenue has fallen from about 88.4% in 2019 to 1.2% in the first half of this year.
In previous rounds of financing, Guohong Hydrogen Energy has won the favor of investors. After 2020, the company's financing began to explode - first Meijin Energy's strategic investment of 180 million yuan, and then received 525 million yuan of equity investment from CRRC Green Vein, Huayi Investment, Chengxin Venture Capital, Yuecai Venture Capital, and Hongsheng Fengtai.
In April 2021, the investors of Guohong Hydrogen Energy appeared in China Capital, Qingdao City Investment Group, CRRC, Zhuoneng Investment, Hongta Venture Capital and other figures; In November of the same year, the company received strategic investment from Sunfly Technology and China Merchants Dinghong. In January, August and September this year, the company completed three rounds of financing, and the cumulative investment has exceeded RMB 3 billion.
In 2022, the company's registered address was changed from Yunfu, Guangdong to Jiaxing, Zhejiang.
Prior to the submission of the main board of the Hong Kong Stock Exchange, the market valuation of Guohong Hydrogen Energy reached RMB 7 billion.
Are hydrogen fuel cells promising?
On the road to developing new energy and achieving dual carbon, hydrogen fuel cells and hydrogen fuel vehicles have sprung up in recent years.
It is understood that the hydrogen fuel cell system is a power generation equipment that converts chemical energy into electrical energy through an electrochemical reaction that does not burn. Its essence is the reverse reaction of electrolysis of water, hydrogen and oxygen are supplied to the anode and cathode respectively, hydrogen diffuses outward through the anode and reacts with the electrolyte, and the electrons are released to reach the cathode through the external load.
The stack, air supply system, hydrogen circulation system, hydrothermal circulation system and electronic control system constitute the hydrogen fuel cell system. The stack is the core of the entire system and is responsible for generating electricity, accounting for about 65% of the total cost of fuel cells; Other components are responsible for supporting the chemical power generation process, including fuel supply, storage, safety monitoring, etc. Catalysts, bipolar plates, catalysts, proton exchange membranes, gas diffusion layers (carbon paper), etc. together account for 85% of the total production cost of the stack.
In recent years, the state has issued a number of policy documents involving hydrogen energy and hydrogen fuel cell vehicle industry. In March this year, the National Development and Reform Commission and the National Energy Administration jointly issued the "Medium and Long-term Plan for the Development of Hydrogen Energy Industry (2021-2035)", proposing to achieve about 50,000 hydrogen fuel cell vehicles by 2025. According to data released by the China Association of Automobile Manufacturers, from January to August this year, the production and sales of hydrogen fuel cell vehicles in mainland China have reached 2,000 units, an increase of 2 times and 1.6 times respectively year-on-year. Among them, the output in the first half of the year alone has exceeded that of last year.
As of 2021, the number of registered hydrogen fuel cell related enterprises in mainland China reached 1,440, a year-on-year increase of 70%; The installed capacity of fuel cell systems was 210.6MW, a year-on-year increase of 165.9%.
But even so, compared with pure electric vehicles loaded with lithium batteries, the production and sales of hydrogen fuel cell vehicles are currently only a fraction of the former. According to the statistics of the Passenger Association, from January to October 2022, the mainland produced 4 million pure electric vehicles, a year-on-year increase of 102%, while the sales of pure electric vehicles were 3.36 million units, a year-on-year increase of 92%.
According to industry insiders, the main reason for the large difference in the scale of the two in the market is the different uses of their scenes. At present, domestic pure electric vehicles are mainly in short- and medium-distance passenger car scenarios, while hydrogen fuel vehicles are mainly in long-distance commercial scenarios, such as buses, commercial buses, logistics vehicles, etc.
At present, the industry has different views on the development prospects of hydrogen fuel cells. For example, Zhou Dadi, former director of the Energy Research Institute of the National Development and Reform Commission, recently said that hydrogen energy is a secondary energy, renewable energy power production hydrogen, fuel cell power generation, energy loss of up to 75%, and power batteries will form an overwhelming advantage over fuel cells.
In the eyes of more industry insiders, compared with lithium-ion batteries, the advantages and disadvantages of hydrogen fuel cells are obvious, because the fuel cell system is an open power system, the output power is easy to increase, and the additional battery will not add too much weight, Toyota Mirai's battery power density reached 2036W/kg. And because the fuel is hydrogen and oxygen, the final water produced, hydrogen fuel cell can achieve zero emission and zero pollution in the true sense.
However, the current disadvantages of hydrogen fuel cells are also obvious, such as the cost of hydrogen production and the safe storage of hydrogen, which has also become a bottleneck in the development of hydrogen fuel cells. In terms of cost, the current price of lithium-ion power batteries is about 8-9 yuan/KWh, and the investment in single charging station infrastructure and power distribution facilities is about 4.3 million yuan. At present, due to the small production in China, the cost of hydrogen fuel cells is between 1-15,000 yuan / KW, and according to relevant data calculations, when the output of hydrogen fuel cells in foreign countries reaches 500,000 units, its cost can be reduced to 40 US dollars / KW.
The infrastructure for fuel cell vehicles is hydrogen refueling stations, and the construction cost of hydrogen refueling stations is related to their hydrogen refueling capacity. According to public information, the investment scale of domestic hydrogen refueling stations with 500kg/d hydrogen supply capacity is between 12 million and 18 million yuan.
In addition, the mainland hydrogen fuel cell industry is still in the early stage of commercialization, and there is still a gap with foreign countries in key technology fields. According to industry insiders, for example, the overall performance of domestic battery membrane electrodes is close to the international level, but there is still a certain gap with the international level in the professional characteristics of the battery, such as platinum load, cold start, and anti-polarity. Therefore, the development of hydrogen fuel cells first needs to focus on breakthroughs in technology research and development in key areas such as membrane electrodes, catalysts, proton exchange membranes, and bipolar plates, continuously improve battery performance, further reduce costs, and strengthen related infrastructure construction under continuous policy support.