Hongda Xingye Co.Ltd(002002) (002002)
Event: the hydrogen supply and marketing contract was signed, with an advance payment of RMB 70 million. On December 15, 2021, the company announced that the wholly-owned subsidiary Wuhai chemical and Wuhai jincaite new energy Co., Ltd. signed the hydrogen supply and marketing contract. Wuhai chemical intends to supply hydrogen to jincaitelai at the price of 35 yuan / kg. Jincaitelai prepays the hydrogen cost of 70 million yuan for one year.
Shanghai Chlor-Alkali Chemical Co.Ltd(600618) giant transformation cuts into the hydrogen energy track. The company is a Shanghai Chlor-Alkali Chemical Co.Ltd(600618) leading enterprise, with caustic soda production capacity and PVC production capacity of 1.1 million tons respectively, and by-product hydrogen. The company plans to raise 5.5 billion non-public funds, and Wuhai chemical, a wholly-owned subsidiary, will invest in a 50000 ton hydrogen production project, of which an annual output of 30000 tons of liquid hydrogen will fill the gap in the field of mass production of liquid hydrogen in China. The project is expected to reach full production in the fifth year. After reaching the production capacity, the annual income of the company will increase by 4.8 billion yuan and the average annual net profit will increase by 980 million yuan.
Strong support from local policies and early distribution of by-product hydrogen. The government of Inner Mongolia Autonomous Region recently issued the development plan for new energy equipment manufacturing, aiming at the requirements of hydrogen energy: rapid growth of industrial scale, obvious enhancement of innovation ability and steady improvement of industrial chain agglomeration. The company’s hydrogen production capacity is mainly distributed in Inner Mongolia. The hydrogen energy industry chain has a first mover advantage and is expected to achieve rapid development with policy support. The company has established a hydrogen energy research institute as early as 2016. At present, based on the by-product hydrogen technology of the company’s chlor alkali industry, the company goes deep into the whole industrial chain of hydrogen energy “hydrogen production”, “hydrogen storage and transportation” and “hydrogen consumption”.
The double carbon national policy drives hydrogen energy into a period of rapid development. As a clean, efficient and safe secondary energy, hydrogen energy is an important direction of global energy transformation. China’s hydrogen energy entered a period of rapid development in 2019, and a large number of industrial support policies were issued. China has become the world’s largest producer of hydrogen energy, with hydrogen production reaching 25 million tons in 2020. Under the background of double carbon, China’s hydrogen demand is expected to reach 35 million tons in 2030 and 130 million tons in 2060.
Investment suggestion: the company’s traditional chemical business will significantly improve in 2021, and has a large capacity of by-product hydrogen. In the future, the company will focus on the layout of hydrogen energy industry chain. We expect that the company’s revenue from 2021 to 2023 will be RMB 7.13/86.5/9.82 billion, and the net profit attributable to the parent company will be RMB 1.74/20.6/2.32 billion, corresponding to PE 9.9 billion 1 / 7.7 / 6.9x. Give “overweight” rating.
Risk warning: the downstream demand of hydrogen energy industry chain is lower than expected; The supporting policies for hydrogen energy industry were not as expected; The company invests in the hydrogen energy industry chain, the uncertainty risk of capital source and other debt risks; The company’s traditional chemical business cycle fluctuation risk.
