Summary of the incident: On July 11, the company announced that Beijing Platinum plans to launch a new hydrogen energy business with Shanghai as the core, and decided to establish a hydrogen energy business operator in Shanghai.

Hydrogen energy entities are expected to land in Shanghai, and the integration of high-quality resources will accelerate: in the field of hydrogen storage, the company and relevant investors provide multi-faceted business support to Beijing Bolu through their own channel resources and project construction experience. All parties agree that establishing hydrogen energy business entities in Shanghai is more conducive to business development, and on the “Equity Investment Agreement”

Additional revisions were made: 1) The investment of 13 million yuan not delivered by investors will no longer be invested in Beijing Platinum; Beijing Platinum should complete the relevant procedures for capital reduction and return to the equity structure before the capital increase; 2) For the 7 million yuan investment amount already paid by the company, Beijing Platinum will offset the investment amount of 7 million yuan already paid by the company through the transfer of shares in the new company (tentative name “Shanghai Plu”). At the same time, “the business and technology related to Beijing Plu hydrogen energy will be transferred to Shanghai Platinum”. The transfer of the hydrogen energy business entity from Beijing to Shanghai will help the company concentrate existing project resources, promote the implementation of hydrogen storage technology projects, and accelerate commercial application. The possibility that the company will further increase capital to achieve merger of hydrogen energy entities in the future will not be ruled out.

Deep business coupling has created a pioneer in energy saving and carbon reduction: Beijing Platinum is committed to the R&D and design of safe and efficient hydrogen storage materials and hydrogen storage devices. It has about 20 invention patents and utility model patents in the fields of metal hydrogen storage and organic solution hydrogen storage, and has achieved the supply of tonnage metal hydrogen storage materials. Solid-state hydrogen storage has advantages such as high bulk density, high safety, and rapid hydrogen discharge. Among them, titanium alloy is a hydrogen storage material with good comprehensive properties, and is also a typical type AB hydrogen storage alloy. In the future, Beijing Platinum can collaborate with the company's business in two areas: 1) the company explores the resource and energy characteristics of sewage, sludge, and exhaust gas, and uses Beijing Platinum's safe hydrogen storage technology to improve the material and energy cycle level of sewage treatment plants, thereby promoting the commercial application of hydrogen storage technology; 2) the hydrogen energy business can form a coupling effect with the carbon asset management business of the subsidiary Jie Carbon Technology to promote business development.

CCER is expected to restart, and Jie Carbon Technology may welcome an opportunity: in the second half of 2022, the company will acquire Jie Carbon Technology. JieCarbon Technology's business mainly covers carbon consulting, carbon asset development and trading (development project categories mainly include VCS, GS, and PHCER). In June 2023, Ordos Guorui Carbon Asset Management Co., Ltd., Zhongcai Quanxing Industrial Investment Co., Ltd. and Jiecarbon Technology simultaneously signed a strategic cooperation agreement for the first forestry carbon sink project in Ordos. The project was supported by the JieCarbon Technology team throughout the development and trading technology. By laying out the “double carbon” field, the company actively explores new ideas for collaborative business development and extends the layout of the energy-saving and low-carbon industrial chain.

Investment suggestion: The hydrogen energy business entity is expected to land in Shanghai, which will help the company concentrate existing project resources and promote the application of hydrogen storage technology projects. Beijing has abundant technology reserves and is expected to be deeply coupled with the company's existing business to achieve commercial promotion. Maintaining the company's profit forecast, the EPS for 23/24/25 is estimated to be 1.31/1.65/1.98 yuan/share, respectively, corresponding to 18.9/15.0/12.5 times the closing price PE on July 11, 2023. Maintain 22.0 times PE in 2023, target price of 28.82 yuan/share, and maintain the “careful recommendation” rating.

Risk warning: industry policy risks; fluctuations in raw material prices; increased competition in the industry.