SinoHytec Announces Proposed Listing on the Main Board of the Hong Kong Stock Exchange, Offer Price Between HK$60 and HK$76 per H Share, Raise up to HK$1,540.7 million

HONG KONG, Dec 29, 2022 – (ACN Newswire) – The leading provider of fuel cell systems in China – Beijing SinoHytec Co., Ltd. (“SinoHytec” or the “Company”, Stock Code: 2402), today announced the proposed listing of its shares on the Main Board of the Stock Exchange of Hong Kong Limited ( the “Hong Kong Stock Exchange”).

SinoHytec plans to offer an aggregate of 17,628,000 H shares under the Global Offering (subject to the Over-allotment Option), comprising an International Offering of 15,865,200 H shares (subject to Reallocation and the Over-allotment Option), representing 90% of the initial offer shares; and Hong Kong Public Offering of 1,762,800 H shares (subject to Reallocation), representing 10% of the initial offer shares), at a price range between HK$60 and HK$76 per Offer Share. The Hong Kong Public Offering will commence at 9 a.m., December 29, 2022 (Thursday), and close at 12:00 noon on January 5, 2023 (Thursday). Dealings in the shares of SinoHytec on the Main Board of the Hong Kong Stock Exchange is expected to commence on January 12, 2023 (Thursday), with the stock code 2402 and in board lots of 50 Offer Shares each.

Guotai Junan Capital Limited and Giraffe Capital Limited are the Joint Sponsors.

SinoHytec is a leading provider of fuel cell systems in China, focusing on the design, development and manufacture of fuel cell systems and stacks (a key component of the system) mainly for commercial vehicles, such as buses and trucks. According to the China Insights Industry Consultancy Limited Report (“CIC Report”), the company ranked first in the PRC fuel cell system market in terms of the total power output of fuel cell systems sold* in 2021, with a market share of 27.8%; and in 2021, fuel cell systems accounted for approximately 0.8% of the total sales volume of new energy systems for commercial vehicles, while lithium battery systems accounted for the rest of the total sales volume. As of June 30, 2022, the company’s fuel cell systems were installed on 80 models of fuel cell vehicles that are featured in the MIIT New Energy Vehicle Catalogs, ranking us first in the industry.

Leader in China’s fast growing fuel cell system market

Established in 2012, the company is a pioneer in the R&D and commercialization of fuel cell systems in China and started batch production in 2016. The company also participated in the fuel cell vehicle development and commercialization scheme of the United Nations Development Programme in China and witnessed the progress of the PRC fuel cell industry from the R&D phase to pilot testing and to commercialization. The company’s fuel cell systems are installed on commercial vehicles operating across various PRC cities, including Beijing, Zhangjiakou, Shanghai, Chengdu, Zhengzhou and Zibo.

As of December 20, 2022, the company’s fuel cell systems have powered over 2,800 fuel cell vehicles on the road in China. These vehicles had an average mileage of around 40,000 kilometers per vehicle, accumulating over 108.6 million kilometers and 2.3 million hours of operations, which built an industry leading record.

Strong research and development capabilities

The Company adheres to a R&D principle of “Advance Research”, “Continuous Development” and “In-depth Promotion”. The key objectives of the Company R&D and product testing activities are to optimize and upgrade the company products’ adverse weather capabilities, durability, reliability, efficiency, safety and economy. As of June 30, 2022, the Company has establised an outstanding R&D team of 270 members. The Company also cooperated with leading research universities in China, such as Tsinghua University, to facilitate the development and commercialization of innovative fuel cell technologies so that the Company can respond to the fast-changing market demands.

The Company’s R&D team has progressively developed the 30kW, 40kW, 50kW, 60kW, 80kW, 100kW, 120kW and 150kW models of fuel cell systems over the years. In particular, the Company launched the 240kW high power output model in December 2021, which is the first automotive fuel cell system in China that can reach a rated power of 240kW.

In addition, the Company participated in and achieved significant results in various R&D projects sponsored by the PRC government. As of June 30, 2022, the Company had over 590 patents, including over 210 invention patents, over 360 utility model patents, and 20 design patents. In addition, the Company has more than 590 patent applications that have been accepted by the State Intellectual Property Office of China.

* Sales volume of fuel cell systems comprises only direct sales to fuel cell vehicle manufacturers.

Solid partnerships with major PRC commercial vehicle manufacturers

The Company has built solid long-term partnerships with major commercial vehicle manufacturers in China, such as Beiqi Foton, Yutong Bus and Geely Commercial Buses, through jointly undertaking national-level R&D projects and codeveloping, demonstrating and testing fuel cell vehicles. In particular, Beiqi Foton and Yutong Bus purchased the Company’s fuel cell systems on order basis since 2016 and 2018, respectively, for the production of their fuel cell vehicles. The Company codeveloped with Toyota and Beiqi Foton transit buses using the Company’s fuel cell systems which are designated as the official transport vehicles at the Beijing 2022 Olympic Winter Games. As of June 30, 2022, the Company has sold fuel cell systems to over 20 commercial vehicle manufacturers whose total fuel cell vehicles sold in 2021 represented nearly 60% of the market share in China. In addition, Beiqi Group and Yutong Bus have become the company Shareholders and strategic partners, representing the recognition of us by the downstream players of the fuel cell vehicle industry.

Integrated components supply system and close cooperation with suppliers

After years of dedication, the Company built a comprehensive procurement system with local suppliers. During the Track Record Period, the Company has established a relatively stable long-term relationship with over 300 suppliers in China, providing parts such as MEA and air compressors. During the Track Record Period, the company had localized the supply of MEA and procured more raw materials from local suppliers each year.

Mr. Zhang Guoqiang, Chairman, Executive Director and General Manager of SinoHytec said, “Our mission is to leverage advanced hydrogen fuel cell technologies to contribute to China’s carbon emission peak and carbon neutralitygoal and empower global energy transition. We are committed to becoming a global leader in hydrogen fuel cell technologies for promoting a sustainable and low-carbon future. New energy vehicle development is strategically significant to China’s energy security and environmental protections. We intend to achieve this goal by implementing the following strategies: further advance the R&D of fuel cell systems and core components; expand the production capacity of fuel cell stacks to meet the growing market demand and achieve economies of scale; strategically expand our customer base and geographical coverage; expand and strengthen our supply chains; and improve our brand awareness and promote the application of fuel cell systems. We will grasp the opportunities arising in future trend and development of the industry, leverage on our competitive advantages to further consolidate SinoHytec’s market position, and create the greatest value for shareholders and investors.”

Beijing SinoHytec Co., Ltd.
Fact Sheet

Information on the Global Offering:
Number of Offer Shares under the Global Offering: 17,628,000 H Shares (subject to the Over-allotment
Option)
Number of Hong Kong Offer Shares: 1,762,800 H Shares (subject to reallocation)
Number of International Offer Shares: 15,865,200 H Shares (subject to reallocation and the Over-allotment Option)
Maximum Offer Price: HK$76.00 per H Share, plus brokerage fee of 1.0%, SFC transaction levy of 0.0027%, AFRC transaction levy of 0.00015% and Stock Exchange trading fee of 0.00565% (payable in full on application in Hong Kong dollars and to refund)
Board Lot: 50 H Shares
Start of the Hong Kong Public Offering: 9:00 a.m., December 29, 2022 (Thursday)
End of the Hong Kong Public Offering: 12:00 noon, January 5, 2023 (Thursday)
Announcement of Allotment Results: January 11, 2023 (Wedsnesday)
Expected Listing Date: January 12, 2023 (Thursday)
Stock Code: 2402

Use of Proceeds:
The Company estimates that it will receive net proceeds of approximately HK$1121.8 million from the Global Offering, after deducting the underwriting commissions, fees and estimated expenses payable by the Company in connection with the Global Offering, assuming that the Over-allotment Option is not exercised and assuming an Offer Price of HK$68 per Share (being the mid-point of the indicative Offer Price range). The Company intends to use the net proceeds for the following purposes:

1) Approximately 75.0% (approximately HK$841.2 million) will be used to fund the research and development in the next three years;
2) Approximately 15.0% (approximately HK$168.4 million) will be used for improving the brand recognition through product promotion and multi-channel marketing in the next three years;
3) Approximately 10.0% (approximately HK$112.2 million) will be used for working capital and other general corporate purposes.

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