The Zhitong Finance App learned that Guotai Junan released a research report saying that as green hydrogen production technology matures and the share of installed renewable energy such as scenery increases, electricity costs will decrease, and space for green hydrogen growth will be further opened up. Demand for electrolyzers will exceed 3GW in 2023. At the beginning of the release phase, alkaline electrolyzers are the main installed power. CR3 will reach 50% of the standard in 2023, and electrolyzer shipments are expected to double in 2024-25. Furthermore, the production and sales volume of hydrogen fuel cell vehicles for the full year of 2023 was 5232 and 5,534, respectively, with year-on-year increases of 44.2% and 64.4%, respectively. The bank believes that benefiting from the advanced layout of hydrogen refueling stations and various storage and transportation routes, downstream applications will quickly emerge, and fuel cell vehicle sales are expected to accelerate.

Guotai Junan's views are as follows:

Domestic hydrogen energy policies are being strengthened and promulgated step by step from top to bottom, removing the hazardous label and ushering in a new subsidy policy.

As the world's largest producer of hydrogen, China has officially incorporated hydrogen energy into the national energy strategy system. The country has introduced a series of policies to promote the development of hydrogen energy, planned a top-level design for hydrogen energy development, determined the strategic position of hydrogen energy, clarified the important role hydrogen energy plays in the national energy system, and policy support and regulation are constantly being strengthened. Local authorities respond positively to national policies and promote the consumption of green electricity and green hydrogen through production permits, subsidies, and emission reduction.

The green hydrogen project is full, and the amount of electrolyzer discharge can be expected.

The scale of the global green hydrogen storage project is rapidly expanding, with ALK and PEM electrolyzers being built together. By 2023, there are 387 renewable hydrogen projects planned, 80 under construction, and 58 in operation; the planned green hydrogen production capacity is 6.43 million tons/year, and 78,000 tons/year is built and operated. Demand for electrolyzers will exceed 3GW in 2023. At the beginning of the release phase, alkaline electrolyzers are the main installed power. CR3 will reach 50% of the standard in 2023, and electrolyzer shipments are expected to double in 2024-2025. There is still room for 63.5% reduction in the cost of hydrogen production in alkaline electrolyzers. The price of raw materials, system performance, and hydrogen production volume are all important factors affecting the cost of hydrogen production. Going overseas for electrolyzers will become another growth pole on the enterprise side.

Hydrogen stations and storage and transportation routes are competing to land, and fuel vehicles are expected to speed up.

The production and sales volume of hydrogen fuel cell vehicles for the full year of 2023 was 5232 and 5,534 units, respectively, with year-on-year increases of 44.2% and 64.4%, respectively. Driven by the trend of localization of raw materials, the average price of fuel cell electric stacks and systems is declining year by year, and the market size is growing rapidly. Under conditions of high operating mileage, fuel cell heavy trucks are economical throughout their life cycle costs. The hydrogen refueling station layout is concentrated in the five major demonstration zones. The skid-mounted/fixed dual-line layout meets the hydrogen demand in different scenarios, and there is plenty of room to reduce equipment costs. The six hydrogen storage and transportation routes have their own advantages, and each is suitable for various hydrogen energy storage and transportation scenarios. Pipeline hydrogen transportation is economical for short and long distance, and is continuously expanding. Benefiting from the advanced layout of hydrogen fueling stations and various storage and transportation routes, downstream applications will quickly emerge, and fuel cell vehicle sales are expected to accelerate.

Investment advice:

1) Companies that rely on Group resources to bring business orders will be the first to benefit from the target petrochemical machinery (000852.SZ), Huadian Heavy Industries (601226.SH), and Lanshi Heavy Equipment (603169.SH);

2) Companies that have core technical support and quickly meet market needs recommend the target Cowell (688551.SH) to benefit from the target Sinoma Technology (002080.SZ), Zhongfu Condor (688295.SH), and ice wheel environment (000811.SZ).

Risk warning: The implementation of the policy fell short of expectations, the reduction in green hydrogen costs fell short of expectations, and the development of hydrogen storage and transportation fell short of expectations.