Finance Association, May 17 (Reporter Wu Chao) As the core production equipment for “green hydrogen,” the number of tenders for hydrogen electrolyzers has increased significantly since last year, and is receiving widespread attention from the industry. Environmental equipment company Huaguang Huaneng (600475.SH) is also entering this field. At the performance briefing held today, the company addressed investors' concerns one by one on hot issues such as electrolyzer, thermal power transformation, and commercialization implementation of CCUS (carbon dioxide capture, storage and utilization) business.

A CIFA reporter noticed that in the 2023 report, Huaguang Huaneng's electrolyzer business did not show revenue. Up to now, the company has not disclosed in the announcement that it has received an official order for the electrolyzer. Therefore, some investors inquired about the fulfillment of the company's domestic and foreign electrolyzer orders.

Jiang Zhijian, chairman of Huaguang Huaneng, responded that the company successfully rolled off the alkaline electrolyzer hydrogen production equipment with a hydrogen production capacity of 1500 m³/h within 2023 and completed performance testing. The DC power consumption of the equipment under standard current density and 1.6 MPa pressure is 4.2 kilowatts of hydrogen per standard of electricity, which is at the leading level in the industry. The company improved the main and secondary electrode structure of the hydrogen production equipment developed by the company. Using a new environmentally friendly diaphragm material, the current density was greatly increased. Under the same amount of hydrogen production, the size of the equipment was greatly reduced.

He explained that in November 2023, the company participated in China Energy Construction's qualified supplier bid and was shortlisted for the supplier list. At the same time, the company has developed industry-university-research cooperation on hydrogen production equipment with Dalian University of Technology, the Shanghai Institute of Advanced Studies of the Chinese Academy of Sciences, etc.; it has established strategic partnerships with the Jiangsu Special Inspection Institute, China Energy Construction Hydrogen Energy Co., Ltd., and Sinopec Guangzhou Engineering Co., Ltd.

Jiang Zhijian further revealed that at present, the company is simultaneously building a new intelligent, green, and digital special equipment base based on the design and manufacturing capacity of 1GW electrolyzers and hydrogen production systems every year. Electrolyzer production lines have arrived one after another, and installation and commissioning have gradually begun. Furthermore, the company is actively bidding for projects for customers related to central enterprises such as China Energy Construction.

In 2023, the gross margin of Huaguang Huaneng's main business was 17.99%, down 1.51 percentage points from the same period last year. Faced with investors' questions about how to improve the decline in gross margin of the equipment manufacturing business, the company said that large-scale equipment upgrades and other related policies promoted by the state will have a great positive impact on the industry, accelerate the release of demand for the company's boiler parts renewal and transformation, and further expand the scale of the technical improvement business. The company will actively seize development opportunities, continue technological innovation, and actively explore the market.

The company also said that in terms of equipment manufacturing, the company has focused on expanding domestic and foreign markets for environmentally friendly boilers such as combustion engine waste heat stoves in recent years. Orders and revenue for waste heat furnaces have maintained good growth, and the environmentally friendly garbage furnace market has also picked up. In the future, the company will actively adjust the structure of boiler products and expand overseas markets

In response to the issue of cost reduction and fee control, the company said that it is currently carrying out lean operation management, which mainly includes the following aspects: optimizing supply chain management and reducing procurement costs in terms of procurement management; targeting advanced enterprises in the industry to improve per capita efficiency; carrying out personnel optimization work to reduce labor costs in relevant enterprises; the entire group is starting to establish a lean operation system and carry out systematic cost reduction activities; and carrying out multi-channel financing to adjust the capital structure to reduce financing costs.

In addition, Huaguang Huaneng's thermal power transformation and commercialization implementation of CCUS (carbon dioxide capture, storage and utilization) business have also attracted investors' attention.

In response, general manager Miao Qiang revealed that the technology and products of thermal power flexibility transformation have been tested at the company's own Huilian Power Plant. The powder delivery system transformation was completed within 2023, overcoming problems such as powder delivery, etc., and is currently in a state of commissioning and operation. The company has had in-depth communication with interested customers in Shanxi, Shandong, Liaoning and other places, and is expected to achieve substantial breakthroughs in the business within 2024.

He also said that at present, the company's CCUS pilot demonstration project has been set up at the Chengdu Research Institute of Dalian Technology. The project can be operated normally and will soon enter the inspection stage. Based on this pilot device, it is planned to install CCUS system verification in its own power plant, aiming to enter the commercial application stage within 2024.