上市捷报丨沙利文助力河南金源氢化化工股份有限公司成功赴港上市(2502.HK)

Henan Jinyuan Hydrogen Chemical Co., Ltd. (Stock Code:2502.HK) on2023year12month20Successfully logged onto the main board of the Hong Kong capital market on the same day. The company is a supplier of hydrogenated phenyl chemicals and energy products in Henan Province, focusing mainly on production and processing.(i)Hydrogenated phenyl chemicals (mainly including pure benzene, toluene and xylene); and(ii)Energy products (including liquefied natural gas and gas). Frost & SullivanFrost & Sullivan,Frost & Sullivan, referred to below as 'Frost & Sullivan', provides exclusive industry advisory services for Henan Jinyuan Hydrogen Chemical Co., Ltd.'s listing. We hereby extend our warmest congratulations on its successful listing.

Henan Jinyuan Hydrogen Chemical Co., Ltd. (hereinafter referred to as 'Jinyuan Hydrogen') was established on2023year12month20The company plans to go public on the 1st of July2.3891100 million sharesHThe final issue price is set at HK$100 per share1.2HK$, net proceeds from global offering approximately2.46HK$10 billion.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

Investment highlights

The company is a leading supplier of hydrogenated phenyl chemicals and energy products in Henan Province;

The company has sufficient and stable raw material supply and has established a strong customer base, ensuring the sustainability and economy of the company's production and operation;

In terms of hydrogenated phenyl chemicals, the company possesses advantages including product quality, production management and capacity, market position, and geographical location (with ample raw material supply nearby);

In terms of liquefied natural gas, the company possesses production management capabilities, efficiency and output, as well as market position and geographical advantages (adjacent to the national railway network, major highways and expressways in North China);

In terms of hydrogen, the company already possesses professional knowledge and experience in hydrogen production and operation, with an annual hydrogen production capacity of24A hydrogen production facility with a capacity of one million cubic meters has completed the upgrade of relevant hydrogen purification equipment, enabling it to purify hydrogen into high-purity hydrogen with an annual production capacity.48One million cubic meters, which can be used for fuel cell vehicles;

The company is the only enterprise in Zhengzhou High-tech Industrial Development Zone (one of the pilot areas for hydrogen energy business development in Zhengzhou) that has entered into a cooperation agreement with the Management Committee regarding hydrogen refueling stations.

According to a report by Frost & Sullivan, by2022Year-on-year earnings, Company:

It is the largest pure benzene supplier in Henan Province, with a market share of18.6%The market scale of pure benzene in Henan Province accounts for3.4%;

It is the third-largest liquefied natural gas supplier in Henan Province, with a market share of4.9%The market scale of liquefied natural gas in Henan Province accounts for1.8%.

Overview of China's Coal Chemicals and Coking Derivative Chemicals Industry

Phenyl chemicals refer to chemicals with the benzene ring as their base group, mainly extracted from coal and petroleum processing. For the benzene extracted from coal, crude benzene generated during the coking process is mixed with gas through washing and absorption equipment, using high-boiling wash oil as a washing and absorbing agent to recover benzene from the gas. Crude benzene can be refined to obtain industrial-grade benzene, with the main products being pure benzene (about 70%), toluene, and xylene.

Currently, the crude benzene hydrogenation process involves hydrogenation under the action of a catalyst to purify crude benzene. It is an environmentally friendly process. Compared to the earliest purification processes such as acid washing, oxidation, and low-temperature gas extraction, the crude benzene hydrogenation process causes less pollution, consumes less energy, has higher product quality and yield, and has virtually no quality difference from petroleum benzene (the pure benzene obtained from refineries).

Source: Frost & Sullivan report

According to the Frost & Sullivan report, with the continuous and steady development of China's macroeconomy, manufacturing industry and industry as a whole, the production and sales volume of pure benzene in China have maintained steady growth. The output of pure benzene in China has decreased from2018year12.7One million tons grew to2022year19.3One million tons, with an annual compound growth rate of10.9%China's pure benzene relies on imports, with annual sales consistently higher than annual production. The sales volume of pure benzene in China has been from2018year15.3One million tons grew to2022year22.6One million tons, with an annual compound growth rate of10.3%In recent years, the production and sales volume of pure benzene in China have maintained a stable growth trend. In the future, the production volume of pure benzene in China is expected to decline from2023year21.1One million tons grew to2027year30.0One million tons, with an annual compound growth rate of9.1%China's pure benzene sales are expected to decline from2023year24.6One million tons grew to2027year34.4One million tons, with an annual compound growth rate of8.7%.

Source: Frost & Sullivan report

According to the Frost & Sullivan report, hydrogenated toluene maintains a relatively fast development pace, boosting the continuous growth of toluene production and sales in China to meet downstream demand. The production volume of toluene in China has been from2018year8.4One million tons grew to2022year16.0One million tons, with an annual compound growth rate of17.6%The sales volume of toluene in China2018year8.7One million tons grew to2022year17.0One million tons, with an annual compound growth rate of18.3%In the future, with the expansion of downstream markets and products in the toluene industry and the continuous development of the macroeconomy, China's toluene production is expected to2023year17.9One million tons grew to2027year30.3One million tons, with an annual compound growth rate of14.1%And China's toluene sales are expected to decline from2023year18.2One million tons grew to2027year30.6One million tons, with an annual compound growth rate of13.9%.

Source: Frost & Sullivan report

Overview of China's Liquefied Natural Gas Industry

Liquefied natural gas is natural gas that has been compressed and cooled to-161.5After heating to °C, a colorless, odorless, non-toxic, and non-corrosive liquid natural gas is formed. Its volume is equal to that of the same amount of gaseous natural gas.0.16%, with a mass of only45%Therefore, it is more flexible compared to pipeline gas transportation. Under the background of 'carbon neutrality', natural gas plays a crucial role, and more flexible loading and transportation methods have led to an annual increase in the demand for liquefied natural gas. The liquefied natural gas industry mainly includes upstream energy extraction, midstream production and storage, downstream distribution, and consumption.

Source: Frost & Sullivan report

China's liquefied natural gas production is from2018year9.0One million tons increased to2022year17.4One million tons,2018Year-end2022The annual compound growth rate for the year18.0%At present, the 'National Single Network' has taken initial shape. The interconnection and interoperability capabilities of natural gas have been significantly enhanced, and the gas storage and peak shaving capabilities have been continuously strengthened. It is expected that2027In China, the production of liquefied natural gas will reach32.1One million tons, itself2023The annual compound growth rate starting from14.2%.

China's natural gas production is insufficient to meet the rapidly growing consumer demand, thus stimulating the need for natural gas imports. The main countries from which China imports liquefied natural gas include Australia, the United States, Qatar, Malaysia, Indonesia, and other countries.4.2%The annual compound growth rate is from2018year53.7One million tons rose to2022year63.4One million tons. Currently, China's energy industry is undergoing a transformation from a severely coal-dependent economy to a diversified energy economy. Natural gas will play an important role in China's future energy supply. It is expected that China will continue to rely on overseas natural gas supplies, and China's liquefied natural gas imports will rise to2027year91.4One million tons,2023Year-end2027The annual compound growth rate for the year8.1%.

Data source: Frost & Sullivan report, National Bureau of Statistics

Overview of China's Gas Industry

Gas can be obtained by purifying coke oven gas produced during the coking process. It is extracted through a purification process that recovers crude benzene, coal tar, sulfur, and ammonia. Gas is mainly used as urban civil fuel or industrial fuel, and carbon monoxide, hydrogen, and methane in gas are important chemical raw materials. In terms of its main components, gas generally consists of57.0%hydrogen,26.0%methane,8.0%carbon monoxide and2.0%composed of carbon dioxide, etc.

Relying on its widely distributed coal resources, China has become a major producer of gas. In addition, the large population base and rapidly developing economy also provide a guarantee for the stable demand in the gas market. China's gas production has been2018year1,196.6Ten billion cubic meters increased to2022year1,600.410 billion cubic meters, with an annual compound growth rate during that period7.5%Looking ahead, it is expected that China's gas production will2023year1,627.4Ten billion cubic meters increased to2027year1,958.3One billion cubic meters, with an annual compound growth rate during that period reaching4.0%.

Data source: Frost & Sullivan report, National Bureau of Statistics

Overview of China's Hydrogen Energy Industry

Hydrogen is a major secondary energy source, with advantages such as light weight, good thermal conductivity, abundant reserves, recyclability, high calorific value, good combustion performance, environmental friendliness, and diverse utilization forms. The biggest difference between hydrogen and traditional fossil fuels is that hydrogen, as an energy carrier, is not obtained through natural mining but is produced through artificial chemical processes. Therefore, hydrogen production is the fundamental link in hydrogen energy utilization. Currently, hydrogen mainly comes from fossil fuels and industrial by-products. Hydrogen can be transported in various forms such as gas, liquid, and solid, depending mainly on the storage method chosen.

The hydrogen energy industry chain can be divided into upstream hydrogen production, midstream hydrogen storage, transportation, and refueling, as well as downstream application segments.

Source: Frost & Sullivan report

China's hydrogen production has been steadily increasing in recent years.2022The annual hydrogen production is35.2One million tons has become the world's largest hydrogen producer. Due to China's energy characteristics of 'rich coal, poor oil, and scarce gas', most of the hydrogen in China is currently produced from coal and industrial by-products as grey hydrogen.

2018Year-end2022In [year], China's demand for hydrogen gradually increased, with industrial production being one of the main demand drivers for hydrogen. In particular, hydrogen energy is widely used in industries such as petrochemicals, electronics, metal processing, and glass manufacturing. Government policy support for energy transformation and environmental protection has also promoted the development of hydrogen energy.

Hydrogen fuel cell vehicles, as one of the zero-emission transportation solutions, have received attention from the Chinese government. Relevant departments have introduced a series of supportive policies to promote the research, development, production, and application of hydrogen energy vehicles. With the improvement of hydrogen refueling station construction and the continuous launch of hydrogen fuel cell vehicle products by OEMs, China's demand for hydrogen in the transportation sector is expected to increase. It is estimated that China's demand for hydrogen will2050reaching about95.0One million tons,2022Year to2050The annual compound growth rate for3.6%.

Data source: Frost & Sullivan report, China Coal Industry Association, China Hydrogen Energy Alliance

The number of hydrogen refueling stations in China2018year26Seats increased to2022year310seat, maintain with85.8%The annual compound growth rate is increasing rapidly. With the active layout of leading enterprises and strong support from the government, the number of hydrogen refueling stations in China is expected to continue to grow steadily. It is estimated that by2025In [year], China will have more than1,000Sagang Hydropower Station, arrive2030Will reach in3,000seat,2050It is expected to exceed the target in 202410,000Seating arrangements have laid a solid foundation for the development of hydrogen fuel cell vehicles and made significant contributions to China's energy transformation and sustainable development.

Source: Frost & Sullivan report

Overview of the Market Competition Pattern of Phenyl Chemicals in Henan Province

There are two main participants in the phenyl chemicals market, namely (i) Petrochemical enterprises that obtain phenyl chemicals from petroleum refineries; andiiA hydrogenated phenyl chemical manufacturing enterprise that obtains phenyl chemicals through crude benzene hydrogenation.

According to a report by Frost & Sullivan,2022In [year], calculated by revenue, the market scale of pure benzene in Henan Province was RMB5,475.6One million yuan, of which the top five companies account for approximately the total market size66.0%.2022In [year], the revenue from Jin Yuan's hydrogenation of pure benzene was RMB1,016.1One million yuan, possession18.6%Market share, ranking first in the industry.

The top five pure benzene companies in Henan Province ranked by revenue2022year

Source: Frost & Sullivan report

2022In [year], in terms of revenue, the market scale of toluene in Henan Province was RMB1,329.9One million yuan, of which the top five companies account for approximately the total market size77.5%.2022In [year], the revenue from Jinyuan hydrogenated toluene was RMB106.7One million yuan, possession8.0%Its market share ranks third in the industry.

The top five tobenes companies in Henan Province ranked by revenue2022year

Source: Frost & Sullivan report

Overview of the Market Competition Pattern of Liquefied Natural Gas in Henan Province

According to a Frost & Sullivan report, in terms of revenue, the top five liquefied natural gas suppliers in Henan Province account for25.1%.2022In [year], the revenue from Jinyuan's hydrogenated liquefied natural gas was RMB428.2One million yuan, possession4.9%It ranks third among liquefied natural gas suppliers in Henan Province in terms of market share.

The top five liquefied natural gas suppliers in Henan Province ranked by revenue2022year

Source: Frost & Sullivan report

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Frost & Sullivan has extensive research experience in the energy and power sectors, assisting well-known companies in successfully listing on capital markets. Recent successful listings include: Huizhu Technology (2481.HK), Huzhou Gas6661.HK), MingYang IntelligenceMYSE:LI), Guotou Electric PowerSDIC:LI), Nacre Energy Technology1597.HK), Jiaxing Gas (9908.HK), Chun Cheng Thermal Power1853.HK), Sinopec Clean Energy1759.HK), Jiutai Bangda2798.HK),TL Natural Gas（8536.HK), Tianbao Energy1671.HK), Domain High International1621.HK), Jintai Feng8479.HK), Zhongcheng Energy2337.HK), Inner Mongolia Energy Engineering Group (1649.HK), Raiscon1679.HK),Persta Resources（3395.HK), Xintele Energy1799.HK), China Energy Engineering Group Corporation (3996.HK), North China Energy(NASDAQ:CNEY)wait.