On June 30, Sinopec released the news that the Xinjiang Kuqa Green Hydrogen Demonstration Project successfully produced hydrogen, and the hydrogen produced was transported to Sinopec Tahe for refining through pipelines, replacing the existing natural gas fossil for hydrogen production. At this point, the project has successfully completed the entire process from green hydrogen production to utilization, marking the first time in China that the entire industrial chain of a 10000 ton green hydrogen refining project has been connected. The total investment of Xinjiang Kuqa Green Hydrogen Demonstration Project is nearly 3 billion yuan. The project will be officially launched in November 2021, and will be implemented by Sinopec Nova. The project will use the abundant solar energy resources in Xinjiang to generate green hydrogen directly. The construction content mainly includes photovoltaic power generation, power transmission and transformation lines, Electrolysed water hydrogen production, hydrogen storage and other facilities. The Electrolysed water hydrogen production capacity is 20000 tons/year, hydrogen storage capacity is 210000 standard cubic meters, and hydrogen transmission capacity is 28000 standard cubic meters/hour. It is reported that all major equipment and core materials used in the Xinjiang Kuche Green Hydrogen Project, such as photovoltaic modules, electrolytic cells, hydrogen storage tanks, and hydrogen transmission pipelines, have been domestically produced, promoting the development of China's hydrogen equipment and hydrogen industry chain.

01 | Is hydrogen energy about to rise? On June 27th, the hydrogen energy sector set off a limit up trend, with the hydrogen energy index hitting a maximum intraday increase of 2.9%; On June 28th, the hydrogen energy index closed in red at 1067.69 points. Among them, on June 27th, Shudao Equipment (300540. SZ), which had a 20CM limit increase, rose 25.78% in three days, while Capital Stock (600860. SH) rose 37.89% in four days. Meijin Energy (000723. SZ), which raised its limit on the first board on June 27th, may be bullish due to the positive impact of large orders. Meijin Energy announced that its wholly-owned subsidiary Guizhou Meijin Huayu New Energy Co., Ltd. and MCC Jiaonai (Dalian) Engineering Technology Co., Ltd. have signed the "Guizhou Meijin Liuzhi Coal Coke Hydrogen Comprehensive Utilization Demonstration Project Phase II Coking General Contracting Agreement", with a total contract price of 1.558 billion yuan (including tax price). In addition, the explosion of hydrogen energy is not lacking the assistance of institutions. Shudao Equipment, Shenghui Technology (300423. SZ), and Capital Stock all made it to the Dragon and Tiger List on June 27th. Among them, the top five seats in the trading of Shudao Equipment and Shenghui Technology with a 20CM limit increase all have institutional specific figures.

02 | Various countries are laying out their plans, and the strong alliance of enterprises with hydrogen energy is known as the "ultimate energy of the 21st century", which is a new direction for energy transformation and economic growth. All countries are actively promoting the layout of the hydrogen energy industry. On June 5th, the United States officially released the "National Clean Hydrogen Strategy and Roadmap", which mentioned that the demand for clean hydrogen in the United States will reach 10 million tons/year, 20 million tons/year, and 50 million tons/year by 2030, 2040, and 2050; On June 6th, the Japanese government decided to revise the "Hydrogen Basic Strategy" at the Cabinet meeting, which aims to increase hydrogen supply to 12 million tons per year by 2040 and around 20 million tons by 2050. Over the next 15 years, it plans to invest a total of 15 trillion yen (approximately RMB 764 billion) to establish a hydrogen related supply chain and achieve commercialization of hydrogen power generation by 2030. While actively deploying hydrogen energy globally, China is also facing excellent opportunities and good momentum for hydrogen energy development. Previously, the National Development and Reform Commission and the National Energy Administration jointly issued the "Medium and Long Term Plan for the Development of Hydrogen Energy Industry (2021-2035)", which clarified the positioning of hydrogen energy development. At present, 30 provinces (cities, autonomous regions) in China have included hydrogen energy in the "14th Five Year Plan" development plan, and more than ten provinces (cities, autonomous regions) such as Beijing, Shanghai, Inner Mongolia, Tianjin, and Henan have issued special plans related to hydrogen energy. The intensive policy introduction has also attracted many enterprises to layout hydrogen energy. According to statistics, over 85GW of green hydrogen projects have been approved so far, and by 2025, the planned amount of green hydrogen in various provinces and cities will reach 1 million tons, corresponding to about 20GW. Currently, less than 1GW of projects have been implemented; The monthly bidding volume this year has reached 980MW, exceeding the total of previous years, and this year has seen an outbreak of 0-1. If the hydrogen production project is to be put into operation, the hydrogen production equipment must not be absent, and many funds are also flowing to the electrolytic cells that benefit the first. Bloomberg NEF analysts have stated that investment in the green hydrogen sector has more than tripled throughout 2022, reaching a record $1.2 billion, with electrolytic cell financing accounting for up to 99% of this. According to the China Hydrogen Energy Alliance, by 2025, the output value of China's hydrogen energy industry will reach 1 trillion yuan. In 2050, hydrogen energy accounted for over 10% of China's terminal energy system, and the annual output value of the industrial chain reached 12 trillion yuan.

03 Jingtai Investment Suggestions | The green hydrogen industrialization is expected to start at a high speed in 2023. Based on the release of demand space, effective implementation of policy support, and coordinated cost reduction of the industrial chain, the green hydrogen industrialization is expected to start at a high speed in 2023. With the high increase of new energy installed capacity and the decrease of Cost of electricity by source, green hydrogen bidding has begun to take shape and the cost reduction of technology has been continuously promoted, which is optimistic about the rapid development of green hydrogen industry. It is recommended to focus on two investment themes: firstly, industry leading companies with green hydrogen business synergy and advantages in the field of new energy power generation, as well as emerging forces that seize the market through technological innovation, are expected to benefit first. 2、 Companies that continue to deepen their efforts in the localization of key materials and components, and address industry development pain points, are also expected to enjoy industry dividends. Give the green hydrogen industry a rating of 'stronger than the market'.