) - The announcement this week that global auto giants Toyota Motor and Hyundai Motor will start selling hydrogen fuel-cell passenger cars in China later this year has jolted the fledgling sector.
SHPT, a fuel-cell battery manufacturing unit which is being spun off of state-owned auto giant SAIC for a future listing, completed five rounds of financing since it was established in 2018 through September 2021. After these rounds, its valuation reached approximately 4.13 billion yuan , 9.6 times the value of its net assets at the end of 2020. On June 28, SHPT filed an IPO prospectus with Shanghai's STAR Market, with the goal of raising over 1 billion yuan.
An investor at a venture capital institution said that investors are primarily basing their bets on the development goals put forward by governments."Everyone is eyeing the market demand outlined by policy planning," said the investor.In March, the National Development and Reform Commission announced a plan for the development of hydrogen energy until 2035.
However, despite the subsidies on offer, some cities' pilot programs are lagging behind schedule. The Beijing-Tianjin-Hebei cluster completed about 60 per cent of the national plan's 2022 FCEV target, helped along by the preparations for the Beijing Winter Olympics in February, said Zhao Jishi, secretary general of China Hydrogen Development and Innovation Alliance for Urban Gas .
This"single-customer structure" also poses challenges to companies' sustainable growth. SinoHytec's annual reports have consistently pointed out the risk of excessive customer concentration. In 2021, revenue brought from the company's top five customers accounted for 84.16 per cent of the total. Sales to the largest customer, BAIC Foton, accounted for 54.01 per cent, mostly related to the Winter Olympics.
Overcapacity is contributing to a price war. In October 2020, SynoEnergy announced a"lowest strategic cooperation price" of 1,999 yuan per kilowatt for one of its fuel-cell battery stacks, becoming the first stack product cheaper than 2,000 yuan. A month later, Nowogen pushed its price down to 1,699 yuan/kW. Just a week later, HydraV set its price as low as 1199 yuan/kW.