Cathay Pacific Junan: Maintaining China's Xuyang Group (01907) “Increase” Rating and Plans to Hold Yihuatong to Jointly Promote the Strategic Development of Hydrogen Energy Business

The Zhitong Finance App learned that Guotai Junan released a research report stating that it maintains China's Xuyang Group (01907) “gain” rating. Since the second half of 2024, supply and demand for coking coal have been loosening, and coal prices have continued to fall. The decline is greater than that of coke, and coke profits have improved. The policy tone of the 2025 two conferences is “steady progress”. The combination of the 5% GDP target and 4% deficit rate is expected to raise demand potential, while the supply and demand for coking coal on the cost side is still loosening, cost pressure is declining, and the company's coke business profits are expected to bottom up.

It is proposed to hold Yihuatong-U (688339.SH) to jointly draw up a new blueprint for the hydrogen energy industry

On March 12, 2025, the company signed a framework agreement. According to the announcement, it was announced that it had signed a framework agreement with Beijing Yihuatong Technology Co., Ltd., and that Xuyang Group plans to use all of the shares of Dingzhou Xuyang Hydrogen Energy Co., Ltd. to subscribe for A-shares issued by Yihuatong with a total supporting price of about 550 million yuan to subscribe for additional A-shares from Yihuatong. After the transaction is completed, Xuyang Group will become the controlling shareholder of Yihuatong. Yihuatong is a leading hydrogen fuel cell system company in China, focusing on hydrogen fuel cell system R&D and manufacturing, covering commercial vehicles, passenger vehicles, etc., and is a leading enterprise in the midstream of the domestic hydrogen energy industry chain. The acquisition can complement the upstream hydrogen production, storage and transportation links in Yihuatong's hydrogen energy industry chain and reduce the comprehensive use cost of fuel cell vehicles. The two sides are expected to form a competitive advantage of “low-cost hydrogen source+leading fuel cell technology”. Accelerating the hydrogen energy commercialization process will jointly promote the strategic development of the hydrogen energy business.

The largest supplier of high-purity hydrogen in Beijing-Tianjin-Hebei Province, continues to build a new ecosystem for the hydrogen energy industry

Since 2020, Xuyang Group has actively deployed the hydrogen energy industry. So far, it has 5 high-purity hydrogen production lines in Dingzhou, Xingtai, Tangshan, Hebei, and Hohhot, Inner Mongolia, with a high-purity hydrogen production capacity of 34 tons/day, making it the largest supplier of high-purity hydrogen in Beijing-Tianjin-Hebei Province. In terms of hydrogen energy applications, the company has 4 hydrogen refueling stations, 5 tons/day hydrogenation capacity, and 5.5 tons/day hydrogen transportation capacity. The company's hydrogen energy industry continues to develop, and it is expected to become a new profit growth point for the company in the future.