When will hydrogen energy investment opportunities arrive?

For the vast majority of people, hydrogen fuel cells still seem to be very distant, and it seems to be the same as setting up a human-inhabited capsule on Mars. Yet for the institutions that are shaping the industry, there is a whiff of an imminent outbreak.

Listed companies quietly deploy hydrogen energy

In June 2016, after the launch of the Action Plan for Innovation in the Energy Technology Revolution (2016-2030), some listed companies concerned about new energy sources began to quietly deploy hydrogen energy, briefly summarized as follows:

In June 2016, the listed company Xiongtao (002733) held a 21.74% stake in Hydrogen Chuangneng through its wholly-owned subsidiary Shenzhen Pengyuan Automation Equipment Co., Ltd. At the end of 2017, the company's valuation was 800 million yuan. In November 2016, Weichai Power (02338-HK) announced that it planned to invest RMB 49.95 million to subscribe for a 33.5% stake in Vorse and become its second largest shareholder. The subscription was completed in July 2017; in May 2017, the listed company Yufu (SZ: 002427) announced that it had increased its capital by RMB 115 million to Wuhan Zhongyu with a post-investment valuation of 450 million, accounting for the post-investment company. 25% equity; in August 2017, the listed company Kane shares invested in Beijing to establish Shineng Hydrogen, and acquired a mature control system and its team from the UK, adopting a similar approach to Yihuatong, with the ready-made system as Foundation, extending to both ends.

At present, Xiongtao shares(002733) is negotiating with Wuhan Institute of Technology on new energy acquisition issues, and plans to build a 1200 Mu hydrogen energy industrial park in Wuhan.

In addition, a number of listed companies have participated in the investment in Huatong, and several funds focused on hydrogen energy investment have been quietly launched. There are also strong listed companies behind them.

It can be said that by the end of 2017, as long as the domestic hydrogen energy companies survive for a period of time, they have received strategic investment from listed companies.

As long as we live, we have a chance.

2017 may be the watershed in the development of China's hydrogen energy industry. Before it was extremely difficult, it may turn out to be.

Before 2017, the vast majority of hydrogen energy companies, especially those engaged in the research and development and production of electric reactors and their accessories, faced great difficulties in operating. The earliest pioneer Xinyuan Power, Shanghai Shenli, Century Fuyuan, and Speeding Green Energy four companies, only Xinyuan Power can continue to operate under the support of SAIC. Although Shenli was supported by a large amount of government research and development funds for science and technology, its operations have not improved. It was eventually acquired by Yihuatong and most of the founding team members have left. The century is rich, and the flying green energy is sacrificed before the opportunity comes.

Beijing hydrogen PU and Suzhou fulsey, two companies founded after 2010, have struggled to reach 2017 and have finally received strategic investment from listed companies. Moreover, in 2018, Beijing Hydrogen Power has confirmed orders for more than 100 million yuan and has seen the dawn of development.

As long as there is a chance, it is a true portrayal of the hydrogen energy industry.

The hydrogen energy industry has turned a corner.

Since 2016, the state has issued a series of policies aimed at promoting the development of hydrogen fuel vehicles, and is looking forward to overtaking in this area. The high subsidies from the central and local governments have made the OEMs eager to try. In just over a year, more than 1,000 hydrogen fuel vehicles are on the road. Many automakers have taken hydrogen fuel cell vehicles as the strategic focus of their next development, forming a team and advanced layout. The small targets are basically 500 to 1000 hydrogen fuel cell vehicles per year. For a time, the reactor became a hot commodity, and individual manufacturers began to expand production scale. According to Academician Yi Baolian, due to the increase in the production volume of China's electric reactors, the carbon paper of Japan's Toray has been scheduled for two years.

It can be inferred that in 2018, some companies are expected to shake off their long-lost hats and usher in the first profit year in history.

The development trajectory of the hydrogen energy industry is bound to be very different from the lithium industry

Hydrogen energy and lithium electricity belong to the industry of new energy vehicles. However, according to my personal point of view, the development trajectory of lithium power may not be suitable for hydrogen energy. The development law of lithium power can not be simply used to predict the future of hydrogen energy. There are three reasons:

First, the initial role of lithium is to replace rechargeable batteries such as nickel-metal hydrogen batteries, that is, lithium is replaced by similar products(although the voltage platform is slightly different). Therefore, even before lithium power is applied to new energy vehicles on a large scale, the lithium power industry can survive and have certain profits, but the scale is not very large. Second, the power supply is spread throughout all corners of the city, making the promotion of lithium-electric new energy vehicles early, charging is not an insurmountable problem. Third, the birth of Tesla led the industry development, star effects can not be replaced.

Compared to lithium, hydrogen energy faces more difficulties in the beginning.

First, hydrogen energy is a new type of energy. Its mission is to replace traditional energy sources, not similar products. It is difficult at the initial stage. Second, hydrogenation stations are severely deficient in the initial phase. Third, there is no alternative company like Tesla. At present, the companies engaged in the development and production of hydrogen energy vehicles are all traditional vehicle companies, and it is difficult to have a sensational effect.

However, lithium-ion batteries also have obvious disadvantages in China.

First, the proportion of urban Chinese with fixed parking spaces is very low, and the number of households with private charging piles is limited. It is neither realistic nor economical to build a large number of public charging piles. Second, although part of the waste lithium can be recycled, there is pollution to its treatment. Third, lithium has safety hazards. Although technology can minimize this risk, theoretically, it can not be eliminated at all.

Compared with these disadvantages of lithium, it is precisely the advantage of hydrogen energy. We can believe that hydrogen energy will have a better future in China.

According to the overview, hydrogen energy will not be accepted by consumers as soon as it is accepted by consumers. It will require a gradual process of development. After the hydrogen station and other supporting facilities are gradually completed, the cost of key components will gradually decrease with mass production and the popularization of new technologies. The day will come when hydrogen fuel cell vehicles will become the mainstream of new energy vehicles.

Development of hydrogen energy industry contributes to national security

On the one hand, China is a shortage of oil and gas, highly dependent on imports; On the other hand, our country is the world's largest hydrogen rich country. It is understood that hydrogen, a by-product of existing chlor-alkali plants, can be collected for more than 2 million vehicles. China's rich new energy, such as wind power and solar energy, is used to electrolysis of water(seawater) to produce hydrogen. The technology is mature, the cost is low, and the efficiency can reach 70 %.

In the long run, the development of hydrogen can help reduce dependence on oil and gas, and strategically, contribute to national security. In the near future, hydrogen energy is an effective supplement to new energy sources.

Investment opportunities in the hydrogen energy industry

At present, the majority of Chinese hydrogen energy enterprises are developing vertically. In addition to the new source power relying on the Dalian Chemical Institute, there is a certain amount of R&D and accumulation in every link of hydrogen fuel cells. The average business is one of its strengths, along the vertical extension. If it belongs to the former, it is divided into system integration class and electric heap class.

For PE funds, it is possible to invest in companies that focus on system integration, such as Yihuatong and Shanghai Rebuilding. Such enterprises can solve the urgent problems of the vehicle factory and can have better cash flow; For VC funds, the valuation of the system integration company is too high, such as Yihuatong valuation of 2.2 billion yuan, PE more than 50 times. If the duration of the fund is sufficient, it is advisable to set up an electric reactor R&D and production enterprise or an electric reactor core component enterprise. It is also possible to consider building enterprises around upstream industries, such as hydrogen refueling stations, and making appropriate advanced investments.

In addition, the layout of other applications around hydrogen energy is also a good choice. Some experts believe that fuel cell cars are only part of hydrogen energy utilization, and energy storage and distributed energy will account for 80 % of hydrogen energy utilization.

As for the future, after the development of the hydrogen energy industry to relatively mature, there may be horizontal development of enterprises, such as those that specialize in certain materials, making materials more extensive, better quality, and better performance. But in the short term, it will be difficult for companies to focus on materials. After all, it will take time for the development of the market to reach the forefront.

The page contains the contents of the machine translation.