Fuel cell system price in China down 33% yoy to $524/kw, the IPO documents of Sino-Synergy reveal
(Hongkong) Sino-Synergy Hydrogen Energy, a major China’s fuel cell stack and fuel cell system producer, announced that its IPO will be hold from Nov 27th to 30th to raise up to HK$1.7 billion and it will be publicly listed on Hongkong equity market from Dec 5th, 2023.
Sino-Synergy is the largest fuel cell manufacturer in China in term of production volume of fuel cell stack, the company sold 11MW, 85MW and 131MW fuel cell system for the year of 2020, 2021 and 2022 respectively, according to IPO documents.
The IPO documents also revealed several critical facts through which we can learn a lot about momentum, strength, and weakness of China’s fuel cell market. According to these documents, the average sales price of the company’s fuel cell system was Rmb 10,423/kw, Rmb 4,893/kw, and Rmb 5,578/kw for the year of 2020, 2021 and 2022 respectively (or $1,453/kw, $682/kw, and $777/kw respectively). And for the first 5 months of 2023, the average price is Rmb 3,756/kw, or $524/kw, down 33% from 2022 full year level.
Declining sales price came with major consequeces that Sino-Synergy reported net losses continuesly during last 3 years-Rmb 221.4 million, Rmb 703.0
million, Rmb 280.2 million and Rmb 88.3 million for the years ended 31 December 2020, 2021, 2022 and the five months ended 31 May 2023. Although part of these losses could be attributed to share-based payment in 2020 and 2021, decreasing gross profit margin and increasing expenses are the main causes for the recurring operating losses.
For the profitability outlook, the company also admits it may continue to incur losses due to market competition although favorable policies and regulartory framework will boost the expansion of fuel cell value chain.
Forecast of fuel cell system price trend in China
In the IPO documents, Sino-Synergy refers to market research conducted by Frost & Sullivan as the forecast of fuel cell system price in China domestic market. According to the research, the system price will decrease to Rmb 2,500/kw ($349/kw) by 2025 and Rmb 1400/kw ($195/kw) by 2030, down another 33% and 63% from current level.
The company regards advancement of the core technology and manufacturing process, the localization of the key components, as well as the increasing downstream demand would push the average price of hydrogen fuel cell stacks and systems lower through 2030. As the major cost component in fuel cell vehicles, the decreasing prices of hydrogen fuel cell stacks and systems will have a knock-on impact on the overall cost of hydrogen fuel cell vehicles. This downward trend in costs has made fuel cell vehicles more affordable and competitive in the market.
This price reduction in prices will stimulate deployment of FCEVs and the growing demand for FCEVs will serve as a catalyst for the expansion of capacity in China. As the production of hydrogen fuel cell vehicles scales up, the demand for key components such as hydrogen fuel cell stacks and systems experienced a corresponding uptick. The company is optimistic the whole FCEV value chain will benefit from this bidirectional reaction.
About Sino-Synergy
Sino-Synergy is a leading technology-based hydrogen fuel cell company in the PRC focusing on research, development, production and sales of hydrogen fuel cell stacks and hydrogen fuel cell systems. The company was established in 2015 and has passed the ISO9001:2015 and IATF16949:2016 quality system certification in 2017.
Main products:
Fuel cell stack
Source: company website
Key feature of Sino-Synergy’s fuel cell stack:
Source: IPO documents
2.Fuel cell system
Source: company website
Key feature of Sino-Synergy’s fuel cell system: