China’s 1st Hydrogen Energy Stock SinoHytec Files for HK IPO

Author: Yiru Qian Editor: Tao Ni Feb 23, 2022 12:32 AM (GMT+8)

If successful, proceeds from the public offering will help alleviate pressure on the company's operating cash flow

Hydrogen energy

The largest Chinese maker of fuel cell engine, Beijing Sinohytec (688339:SH), has filed a listing application with the Hong Kong Stock Exchange, with Guotai Junan International and Giraffe as the joint sponsors.

Founded in 2012, SinoHytec is a high-tech enterprise specializing in the R&D and commercialization of hydrogen fuel cell power systems.

With a vision of becoming a "world-leading" supplier of hydrogen fuel cell engines, the company offers fuel cell systems with different-rated power from 30kW to 120kW over the years.

As of December 31, 2021, SinoHytec had been powering over 1,800 fuel cell vehicles on Chinese roads. Besides, it has established a long-term partnership with mainstream vehicle manufacturers such as Beiqi Foton, Yutong Bus and Geely Commercial Vehicles.

However, since fuel cell technologies are still at the early stage of monetization, and owing to huge losses in the firm's account and note receivable, SinoHytec's profits have been turned into losses, leaving it struggling to generate new revenue.

In 2016, SinoHytec was listed on the National Equities Exchange And Quotations (NEEQ, also known as the New Third Board) as "the first hydrogen energy stock."

It went public on Shanghai's Nasdaq-like STAR market in August 2020. If given the greenlight this time, SinoHytec will achieve a dual listing on both the A-share market and Hong Kong exchange.

As the world's largest carbon emitter, China has put forward the country's carbon peak and neutrality goals at the UN General Assembly in September 2020. This has spurred the growth of China's fuel cell industry, which became a magnate for a large amount of capital and technology, and international cooperation and strategic investment in this field have also accelerated. 

In July 2016, Sinosynergy, a Guangdong-based fuel cell system supplier, signed a strategic cooperation framework agreement with Ballard Power (BLDP:NASDAQ), the world's Tier-1 clean energy fuel cell manufacturers. 

In August of the same year, Zhongshan Broad-Ocean Motor (002249:SZ) , a major auto electric motor maker, subscribed for a 9.9% stake in Ballard and the duo also signed a strategic cooperation framework agreement. 

Other industry players have gravitated toward this sector, enticed by growing demand for clean energy such as hydrogen. Fujian Snowman (002639:SZ) , a producer of cooling system, subscribed for 17.6% of Hydrogenics – a Canadian fuel cell and hydrogen technologies provider – through an industrial M&A fund in July 2017; Cummins (CMI: NYSE) , one of the world's largest engine manufacturers, closed its acquisition of Hydrogenics on September 2019.

Meanwhile, Weichai Power (000338:SZ), a company making combustion engines, worked alongside Ballard Power in November 2018 to establish Weichai Ballard Hydrogen Energy Technology Co Ltd, with a total investment of CNY 561 million. Weichai Power previously subscribed for 19.9% of Ballard's shares and they entered into a strategic partnership agreement.