Jichong Hydrogen Energy, a technically advanced company, is encountering a cash flow crisis as the hydrogen energy industry undergoes consolidation.
On June 5, an enforcement ruling from the Zhangjiagang City People's Court drew the hydrogen sector's attention to Changzhou Yimai New Material Technology Co., Ltd. This leading domestic company in the field of metal bipolar plate coatings had all its equity, equivalent to 5 million yuan, frozen.
It was also noted that three days prior, under the same case number (2026) Su 0582 Min Chu No. 6758, another wholly-owned subsidiary of Jichong Hydrogen Energy, Jiangsu Jichong Hydrogen Energy Technology Co., Ltd., had 35 million yuan of its equity frozen. Both freezes point to the same parent company: Shanghai Jichong Hydrogen Energy Technology Co., Ltd.
This is no ordinary enterprise. Founder Fu Yu studied under Academician Yi Baolian, a foundational figure in China's fuel cell field. The core team boasts an average of over 15 years of industry experience. Last year, shipments of its MH170 fuel cell stack surged into the top three nationally. Its new-generation MH290 stack achieves a power density of 7.1 kW/L.
It can be asserted that on any hydrogen industry map, Jichong Hydrogen would be marked as a representative "technology-focused" player. However, labels such as decoration contract disputes, frozen subsidiary equity, and interrupted financing rhythm are now appearing alongside its name on the same bulletin board.
Technical leadership does not equate to cash flow security. Jichong Hydrogen's situation reveals the most realistic challenges within hydrogen energy entrepreneurship.
Strong Technical Foundation but Insufficient Cash Reserves
Founder Fu Yu's resume is a model "top student" answer sheet in the hydrogen energy circle. After eight years of combined master's and doctoral studies at the Dalian Institute of Chemical Physics, Chinese Academy of Sciences under Yi Baolian, he spent eight years at Sunrise Power honing skills from R&D to productization. He then accumulated international cooperation experience at Zhejiang Adam and Shanghai Re-Fire.
When he founded Jichong Hydrogen in December 2018, he brought not just a business plan but complete know-how across materials, processes, and equipment for metal plate fuel cell stacks. This accumulation quickly translated into product competitiveness.
The MH170 series stack employs metal bipolar plate technology, with single-stack power covering 80-160 kW, a volumetric power density of 4.7 kW/L, and the capability for -39°C cold start without assistance. The MH290, released in July 2025, pushes peak power to 410.9 kW with a power density of 7.1 kW/L and a design life of 30,000 hours, tailored for heavy-duty trucks, mining trucks, ships, and other high-intensity scenarios.
According to reports, by the end of 2025, Jichong Hydrogen's fuel cell stack products held about a 15% share of the domestic market, with shipment volume ranking among the top three in the industry.
Capital once highly recognized this technical value. From an angel round of tens of millions of yuan in 2019 to a Series A round of hundreds of millions in early 2022, Jichong Hydrogen completed six rounds of financing within three years, with investors including prominent institutions like CICC Hui Rong, Tsinghua Holdings Capital, CASSTAR, and CCB Beijing.
In terms of industrial layout, Fu Yu chose a path of deep vertical integration. In 2020, Jiangsu Jichong Hydrogen was established in Zhangjiagang, building an annual production base for 2,000 stacks (calculated at 100 kW/stack). Subsequently, it gained full control of Shenzhen Zhongwei and Changzhou Yimai, two leading companies in the metal plate supply chain, bringing core processes like bipolar plate welding and coating in-house.
Production bases in the Beijing-Tianjin-Hebei region, South China, Henan, and Shandong were successively established, forming a complete chain from R&D to mass production. However, there is a gap between products moving from the production line to the customer's warehouse and money returning from the customer's account to the company's account—a gap filled by market realities.
In the first four months of 2026, national production of hydrogen fuel cell vehicles was only 300 units, with sales of 500 units, representing year-on-year declines of 63% and 43.6%, respectively. The procurement cost of a hydrogen heavy-duty truck is nearly one million yuan, almost three times that of a comparable diesel truck. At current hydrogen refueling prices above 35 yuan per kilogram, the fuel cost per 100 kilometers is about 100 yuan higher than for diesel heavy-duty trucks.
The current major bottleneck is that end-users cannot afford the costs, so upstream component manufacturers cannot sell. Within this industry context, Jichong Hydrogen has actually performed relatively well. Its market share and order backlog were still growing in the first half of 2025. It won and completed delivery for a central state-owned enterprise's first hydrogen fuel cell bidding project. Its "Ji Zhi Yi" hydrogen-powered drone for the low-altitude economy has also entered the commercial stage.
However, order growth does not equal healthy cash flow. If the payment collection cycle lengthens while R&D, raw material, and labor expenses need to be paid monthly, cash reserves will visibly thin. Decoration contract disputes are often the most sensitive early warning signals.
In May of this year, Jichong Hydrogen's wholly-owned subsidiary Xinxiang Jichong was sued by a supplier over a decoration contract dispute. In fact, decoration payments are not large among engineering-related debts, but suppliers have the lowest tolerance for payment delays. Their initiation of legal proceedings indicates the company has already experienced payment delays.
When supplier confidence begins to waver, pressure for collecting larger equipment and material payments will follow.
The Chain Reaction of Equity Freezes is More Complex Than the Numbers
From a legal perspective, an equity freeze does not equate to company bankruptcy nor mean operations must cease. Frozen equity cannot be transferred, pledged, or used for dividends during the freeze period, but the subsidiary's daily production, sales, and R&D are not directly affected. Changzhou Yimai's coating processing line is still running, and Jiangsu Jichong Hydrogen's stack assembly workshop will not halt because of a court ruling.
From a commercial perspective, however, the damage of a freeze lies in the information it conveys. When a partner sees "held equity frozen, frozen equity amount 5 million yuan" on a corporate information platform, their first reaction will not be to study the specific clauses of the enforcement ruling but to call Jichong's sales or finance department: "Is something wrong recently?"
Bank credit managers will raise the company's risk rating during post-loan management. Potential customers might question the "judicial risk" column during tender evaluations. This implicit erosion of credit is often harder to quantify and more damaging than the frozen amount itself.
For example, after Guohong Hydrogen Energy was listed as a失信被执行人 (discredited entity subject to enforcement) in January 2026 due to a 2.07 million yuan sales contract dispute, public information showed its legal representative was restricted from high-consumption activities. Will subsequent business cooperation require higher explanation costs and longer due diligence cycles? The answer is self-evident.
More noteworthy is the knock-on effect of the freezes. Jichong Hydrogen's two core subsidiaries—Changzhou Yimai and Jiangsu Jichong—undertake the key functions of metal plate coating and stack assembly, respectively. While the freeze does not directly interfere with management rights, if it lasts for an extended period or if new creditors apply for轮候冻结 (sequential freezing) during this time, the subsidiaries' financing capacity and ability to provide external guarantees will be locked.
For hydrogen energy companies reliant on continuous investment to maintain technological iteration and capacity expansion, this is a tangible constraint. Based on public information, this freeze stems from a civil lawsuit, and the case is not yet concluded. If Jichong Hydrogen can reach a settlement with the applicant for enforcement or fulfill relevant obligations, the equity freeze can be legally lifted.
The key question is: Does the company's cash flow reserve suffice to handle such sudden judicial payment pressure?
What Can the Hydrogen Industry Rely on to Survive the Pre-Dawn Shakeout?
Jichong Hydrogen's predicament is not an isolated case. After completing a 370 million yuan financing in 2021, Sunrise Power, due to a lack of follow-up funds and delayed local support, has accumulated enforcement amounts exceeding 23 million yuan, forcing its major shareholder to pledge subsidiary equity for short-term liquidity.
Yihuatong incurred cumulative losses of approximately 1 billion yuan over the past five years, with a loss of 310 million yuan in just the first three quarters of 2025, and its R&D team shrank from 300 to 128 people. Xiongchuan Hydrogen Energy faces over 80 million yuan in total disputes related to sales contracts due to prolonged policy subsidy reimbursement cycles.
These companies have different technological routes and founder backgrounds, but their paths into difficulty are strikingly similar: financing-driven rapid expansion collided with a slower-than-expected release of the downstream market, compounded by delayed subsidy payment cycles.
The issue may lie in the design of the business model. The hydrogen energy industry chain is long, encompassing hydrogen production, storage and transportation, refueling, fuel cells, vehicle manufacturing, and operation. Each segment is still in the early half of the cost-reduction curve. Even if a stack company achieves leading technical indicators and the lowest industry costs, it still faces the reality: its customer's customer (e.g., logistics companies) cannot make the economics work for using hydrogen trucks in current operations.
This is not to deny hydrogen's prospects. Full-year 2025 sales of hydrogen fuel cell vehicles exceeded 10,000 units, a growth of over 50% year-on-year, indicating the market is still expanding. On the policy front, the Energy Law has incorporated hydrogen into the energy management system. A tri-ministry joint initiative for hydrogen energy comprehensive application pilots prepared subsidies of up to 1.6 billion yuan for each city cluster.
It can be said the policy foundation is clear, but the speed of policy implementation cannot keep pace with the rate at which companies are burning through cash.
For technology-focused companies like Jichong Hydrogen, the most critical task now is not to continue expanding摊子 (scale) but to streamline. Preserve the core—Changzhou Yimai's coating process, Jiangsu Jichong's stack assembly capability, and the technological lead of the MH290—while temporarily scaling back non-core, short-term non-self-sustaining business lines.
Furthermore, does the Xinxiang base project related to the decoration dispute need a reassessment of its investment pace? Can the capacity utilization rates of various production bases support their fixed costs? These questions are more urgent than securing another round of financing.
From a broader perspective, the hydrogen industry needs a fundamental shift from "financing-driven" to "order-driven." Subsidies are a booster, not an oxygen tank. Companies must identify scenarios where the economics can勉强打平 (barely break even) even without subsidies. Examples include port, mining, and industrial park internal short-distance transportation where hydrogen refueling costs are relatively low and routes are fixed.
By first achieving a closed-loop operation in these scenarios, accumulating operational data and cost-reduction experience, replication can then expand outward.
Fu Yu once used "3%" to describe the probability of a startup crossing the "valley of death." This figure is not pessimistic but a reminder: the 3% that survive do so not because they have the strongest technology, but because their cash flow lasts until the day the market truly takes off.
Jichong Hydrogen holds good technical cards, has national-level专精特新 "Little Giant" qualifications, has won and delivered projects for central state-owned enterprises, and has layouts in new tracks like the low-altitude economy. However, for these advantages to transform into a safety cushion, one prerequisite remains: surviving the current round of funding pressure and not falling just before the finish line.
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