On the evening of September 5, SINOHYTEC (688339.SH; 02402.HK) announced the termination of its share issuance for asset acquisition and supporting fund-raising related to affiliated transactions, authorizing management to handle termination-related matters. This marks the official collapse of the major asset reorganization plan between SINOHYTEC and Risesun Group (01907.HK) that had been underway for six months.
The Elusive "Strong Alliance"
This major reorganization was perhaps a "strong alliance" that SINOHYTEC could never truly grasp from the beginning. "Valuation disputes" became a key factor in the eventual failure: SINOHYTEC's peak valuation in 2023 was unacceptable to Risesun Group, while Risesun Group's acceptable 2024 peak valuation was unacceptable to SINOHYTEC.
In 2023, SINOHYTEC went public on the Hong Kong Stock Exchange, becoming China's first "Hydrogen A+H listed company." At that time, the hydrogen energy industry was riding high winds, with warming policy support and intense capital pursuit. SINOHYTEC's market value once reached a peak of 10 billion yuan.
In 2024, according to TrendBank statistics, China's hydrogen fuel cell installed capacity reached 807.42 MW, with SINOHYTEC ranking first with a 20.8% market share. However, its market value had already shrunk significantly compared to 2023.
The peak valuations of the two years differed by more than double - how could such a massive valuation gap be reconciled? Moreover, neither party's current situation looked optimistic.
Risesun Hydrogen achieved revenue of 320 million yuan in 2024, down 21% year-on-year, with net profit of 23.13 million yuan, down 61% year-on-year. SINOHYTEC achieved revenue of 367 million yuan in 2024, down 54% year-on-year, with a net loss of 453 million yuan, setting a record for the largest annual loss. In the first half of 2025, it achieved revenue of 71.93 million yuan, down 53.25% year-on-year, with net profit of -163 million yuan, down 15.51% year-on-year.
Control disputes were another reason for the reorganization's failure. Risesun Group demanded that original shareholders surrender majority board seats, while SINOHYTEC's founding team refused to relinquish control. The two sides had fundamental differences in their understanding of the company's future development direction.
New regulatory rules delivered the "final blow": share issuances for asset purchases must include simultaneous supporting financing, automatically becoming invalid if stock prices fall below 80% of the issuance price. From August 2025, SINOHYTEC's A-share price triggered the 80% red line, significantly undermining the feasibility of the original reorganization plan where Dingzhou Risesun Hydrogen's entire equity would subscribe to SINOHYTEC's issued A-shares with supporting financing totaling approximately 550 million yuan.
With nothing left to negotiate, both parties went their separate ways. According to relevant regulations, SINOHYTEC committed not to plan major asset reorganizations within one month of disclosing the termination.
Should the "Upstream Extension" Strategy Take the Blame?
Looking back at SINOHYTEC's reorganization preview disclosed in March, the company stated that the reorganization would drive "chain extension and supplementation" in its industrial development, extending upstream into the "production-storage-transportation-refueling-research-application" industrial chain. Risesun Hydrogen was expected to provide large-scale hydrogen supply with cost advantages.
Now that the reorganization has failed, was SINOHYTEC's "upstream extension" strategy wrong?
The first-half ranking released by Gaogong Hydrogen in July 2025 showed that SINOHYTEC had fallen out of the top ten in hydrogen fuel cell system installation capacity. SINOHYTEC stated that overall market demand in the fuel cell industry declined, with industry scale shrinking year-on-year. Based on current liquidity considerations, SINOHYTEC adopted a prudent marketing expansion strategy, leading to reduced product sales during the reporting period.
Industry data shows a significant downward trend in the hydrogen energy market in the first half of 2025. National fuel cell vehicle production was only 1,364 units, down 47.2% compared to the same period last year; sales dropped to 1,373 units, down 46.8% year-on-year. According to GGII statistics, actual registered sales of domestic fuel cell vehicles in the first half reached 1,947 units, down 22.5% year-on-year.
Meanwhile, current hydrogen fuel cell system prices have dropped to around 2,000 yuan/kW, but remain higher than internal combustion engine costs; hydrogen refueling stations cost over 15 million yuan per station to build, preventing nationwide density improvement; hydrogen terminal prices remain at 35-40 yuan/kg, making refueling costs for heavy trucks significantly higher than diesel vehicles, creating enormous barriers to commercial promotion.
Risesun Hydrogen's main business includes production and sales of high-purity hydrogen and synthetic ammonia, comprehensive energy station operations, and R&D and industrialization of green hydrogen production and liquid hydrogen storage and transportation systems. It has achieved large-scale, low-cost, high-quality, and ultra-low-carbon high-purity hydrogen production and operations.
Risesun Hydrogen could provide large-scale hydrogen supply with cost advantages, potentially reducing operating costs for hydrogen fuel cell vehicles. Additionally, Risesun Hydrogen's liquid hydrogen storage and transportation technology is about to be deployed, effectively expanding the transportation radius of hydrogen fuel cell vehicles. Combined with existing comprehensive energy station layouts and pipeline transportation construction plans, this would promote terminal market development for SINOHYTEC's products.
From this analysis, SINOHYTEC's "upstream extension" strategy is undoubtedly correct. The reorganization's failure doesn't mean the "upstream extension" strategy lacks feasibility.
SINOHYTEC's Path Forward
After the reorganization failure, accelerating accounts receivable collection is SINOHYTEC's urgent priority for improving cash flow. In the first half of 2025, SINOHYTEC's accounts receivable balance reached 2.13 billion yuan, nearly 30 times the half-year revenue, with 1-2 year accounts representing 38% and over-5-year accounts reaching 311 million yuan.
Expanding application scenarios is equally crucial. SINOHYTEC stated that China's fuel cell vehicle applications have evolved from early single-scenario commercial demonstrations in public transit to multi-scenario demonstrations in public transport, sanitation, urban logistics, cold chain transportation, construction waste transport, and bulk goods transport, while also expanding into new areas like shipping and combined heat and power.
Continuing to control costs and expenses remains important. SINOHYTEC's R&D team has continued shrinking, with research personnel decreasing from 346 in 2024 to 156, and further down to 128 in the first half of 2025. SINOHYTEC stated this adjustment is a proactive strategy to respond to market changes and operational pressure, aimed at controlling cost expenditure through optimized R&D project allocation.
What remains is "doing one's best and accepting fate," waiting for market winds to come. The International Energy Agency predicts that China's green hydrogen manufacturing equipment capacity will account for nearly 70% of the global total in 2025. Policy support continues with positive signals - in June 2025, the National Energy Administration issued the "Notice on Organizing Hydrogen Energy Pilot Work in the Energy Sector," guiding the implementation of advanced hydrogen energy technology and equipment and high-level infrastructure construction.
SINOHYTEC's reorganization failure is not the end of the story, but rather a footnote in the hydrogen energy industry's difficult growth period. The hydrogen energy race is a marathon - temporary leads or lags don't determine final victory.
On the evening of September 5, SINOHYTEC also disclosed an announcement regarding the departure of key technical personnel. According to the announcement, core technical personnel Yang Shaojun mutually agreed with SINOHYTEC to terminate his employment relationship due to personal reasons and will no longer hold any position at SINOHYTEC after departure.
For SINOHYTEC, how to maintain sufficient energy when the industry spring arrives has become the most urgent challenge.
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