【IPO Subscription in Hong Kong】Refire Energy: Can It Replicate the Surge of Guofu Hydrogen Energy?
I. Basic Information
1.1 Company Profile
$REFIRE(02570.HK), established in September 2015 in Shanghai, is a leading hydrogen energy technology company with a market-oriented approach and a global vision. Its product and service portfolio covers multiple segments from upstream hydrogen production to downstream hydrogen applications.
The company is the first domestic hydrogen energy technology company to fully achieve in-house R&D and mass production of fuel cell systems, stacks, membrane electrodes, and bipolar plates. It has reached international advanced levels in core commercial vehicle fuel cell technologies such as long lifespan, high reliability, and environmental adaptability.
1.2 IPO Information
II. Fundamental Analysis
2.1 Financial Data
Revenue: The company achieved revenues of RMB 524 million, RMB 605 million, and RMB 895 million in 2021, 2022, and 2023, respectively, with a compound annual growth rate (CAGR) of 30.69%. However, revenue for the first five months of 2024 plummeted by 85.7% year-on-year to only RMB 13 million. While the growth from 2021 to 2023 was relatively strong, the sharp decline in 2024 is primarily attributed to seasonal factors and fluctuations in customer demand for fuel cell systems and components due to their vehicle production plans.
Profit: The company reported gross profits of RMB 62 million, RMB 50 million, and RMB 180 million in 2021, 2022, and 2023, with corresponding gross margins of 11.8%, 8.2%, and 20.1%. Net losses during the same period were RMB -654 million, RMB -546 million, and RMB -577 million, totaling over RMB 1.7 billion in losses over three years.
2.2 Industry Development
In terms of sales, the market size of China's hydrogen fuel cell industry grew from RMB 700 million in 2018 to RMB 3.9 billion in 2023, with a CAGR of 40.4%.
The market size is expected to reach RMB 49.8 billion by 2028, with a CAGR of 66.2%.
2.3 Company Position
As of December 31, 2023, there were nearly 57 fuel cell system companies in China's hydrogen fuel cell market.
In terms of sales output power, the market size in 2023 was approximately 1,016.5 MW, with the top five companies accounting for about 70.7% of the total market. Reshape Energy's total sales output power for hydrogen fuel cell systems reached 242.3 MW, giving it a 23.8% market share and ranking first in China's hydrogen fuel cell market.
In terms of the total sales output power of hydrogen fuel cell systems installed in heavy-duty trucks, the company ranked first in China's hydrogen fuel cell market in 2023, with a 42.4% market share.
III. Cornerstone Investors and Sponsors Analysis
The company has secured one cornerstone investor for this IPO, with a subscription amount of RMB 300 million. At the mid-point of the offering price range, the subscription accounts for 43.4% of the total shares issued, which is a relatively high proportion, close to half. According to the agreement, the cornerstone investor has a lock-up period of six months...
IV. Lottery Rate Analysis
The Hong Kong public offering consists of 482,800 shares, with each lot comprising 20 shares, totaling 24,140 lots. Currently, the margin financing is insufficient. With few recent Hong Kong stock listings and the recent rally in Hong Kong stocks, it is unlikely to exceed 15 times oversubscription, meaning no clawback. Thus, both Group A and Group B will receive 12,070 lots each. Based on 4,000-6,000 applicants, the estimated one-lot winning rate is around 80%, with two lots guaranteeing one winning lot...
V. Comprehensive Analysis and Rating of the New Stock
1. From a fundamental perspective, the company's revenue performance was relatively strong in the first three years, but the first five months of 2024 saw a cliff-like drop. More critically, the company has accumulated losses exceeding RMB 1.7 billion over these years. However, profitability remains a challenge across the hydrogen energy industry, as seen with the recently listed Guofu Hydrogen Energy.
2. From a brand recognition perspective, the company operates in what is considered a relatively traditional new energy sector. Despite years of development, the hydrogen energy industry has yet to see significant breakthroughs. Nonetheless, the company holds a pivotal position as an industry leader, albeit with certain qualifications.
3. From the cornerstone investor perspective, one cornerstone investor subscribed to RMB 300 million, accounting for 43% of the total offering—a bold move. The company's pre-IPO financing rounds included participation from notable industrial investors such as Sinopec Capital, National Manufacturing Transformation and Upgrading Fund, FAW Jiefang Group, Yutong Group, Toyota Tsusho, Sequoia Capital, and Hillhouse Capital.
4. From a market environment perspective, the company is in the new energy sector, which theoretically has bright prospects. However, the hydrogen energy industry has progressed slowly within this sector, largely due to a lack of technological breakthroughs. As a result, industry growth relies heavily on government support, with most companies operating at a loss.
5. From a valuation perspective, the company's current valuation ranges between HKD 12.4-14.2 billion. Given its loss-making status, price-to-earnings (P/E) ratios are irrelevant, leaving price-to-sales (P/S) ratios as the primary metric. After comparing with other Hong Kong-listed hydrogen energy companies, the valuation becomes clear.
6. From a liquidity perspective, the company is issuing 4.82 million shares, aiming to raise HKD 750 million. With cornerstone investors subscribing to HKD 320 million, the remaining HKD 430 million will be freely tradable. This will inevitably lead to significant selling pressure, especially compared to Guofu Hydrogen Energy, which had only around HKD 100 million in free float.
7. Overall, Reshape Energy's fundamentals are unremarkable, offering limited appeal. Those expecting a surge in its stock price should look elsewhere, though the downside is also limited—a classic case of "neither fish nor fowl." The only noteworthy point is that Guofu Hydrogen Energy, which listed earlier this month, saw a 20% gain on its debut and has since risen over 40%.
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