ChinaNewEnergy—HydrogenChinaHydrogenDevelopmentPlanfor2021-2035unveiledEnergySectorReviewFigure1:EPScontributionfromhydrogenby2030fortheCS-coveredhydrogenplaysSource:CreditSuisseestimatesHotoffthepress.On23March,China’sNDRCtogetherwiththeNEAannouncedthelong-awaitedChinaHydrogenDevelopmentPlanfor2021-2035.ThismarksthefirsthydrogengameplanfromthecentralgovernmentsincePresidentXi’snet-zeropledgebackin2020.Despitenotmanyspecificnumerictargets,itsetsoutapathwayfor2025/2030/2035acrossthehydrogenvaluechain,asignificantmilestoneforChina’smovetowardscarbonneutrality.What’snew.(1)Greenhydrogen:Acceleratesthedevelopmentofgreenhydrogenbytargeting100-200ktpaoutputby2025(~1%ofChina’stotalhydrogenoutput),andencouragesconsumptionofgreenhydrogeninprovinceswhererenewablesaresufficienttosupportgreenhydrogenproduction.(2)FCEV:Targets50kunitsofFCEVownershipby2025,which,onthesurfaceofit,appearsatthelow-end(CSe:150kunits),butthegovernmentnowaimstodevelopFCEVsinparallelwithBEVs,whichtousisapositivesignal.(3)Localisation:FocusesontheR&Dofkeycomponents,e.g.,PEM.(4)Financing:EncouragequalifiedcompaniestolistintheA-sharemarket.Stockcalls.Thepositivestance,aslaidoutinourChinaHydrogenConnectionSerieslastyear,remainsintact,andthispolicyannouncementshouldkick-startawaveofcapexspendinginthehydrogenvaluechain,inouropinion.WelistsevenCS-coveredcompanieswhichwebelieveshouldbebestpositionedtorideonthetheme,giventheirleadingpositionsinvariouspartsofthevaluechain:production—Sinopec,LONGi;storage/infrastructure—CIMCEnric,DongfangElectric;application—BeijingSinoHytec,Dongyue,WeichaiPower.5%7%35%5%13%10%0%5%10%15%20%25%30%35%40%SinopecLONGiCIMCEnricDongfangElectricBeijingSinoHytecDongyueWeichaiPowerProductionStorage/InfrastructureApplicationEarningscontributionfromHydrogenby2030100%24March2022EquityResearchAsiaPacificChinaDISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ResearchAnalystsHoraceTse85221017379horace.tse@credit-suisse.comBinWang85221016702bin.wang@credit-suisse.comIrisZheng,CFA85221016075iris.zheng@credit-suisse.comGaryZhou,CFA85221016648gary.zhou@credit-suisse.comJibangChai85221016704jibang.chai@credit-suisse.comDanielCui85221016523daniel.cui@credit-suisse.comSabrinaShao,CFA85221016305sabrina.shao@credit-suisse.comCynthiaWu85221017693cynthia.wu@credit-suisse.com24March2022ChinaNewEnergy—Hydrogen2FocustablesFigure2:SummaryofChina’shydrogendevelopmentplanfor2021-2035Source:NDRC,NEA,CreditSuisseestimatesFigure3:Valuationcomps—ChinahydrogenplaysunderCScoverage(pricedasof23March2022)MktcapP/E(x)EV/EBITDAP/BROE(%)Div.yldNetD/ECompanyTickerFXRat.PriceTPUS$mn22E23E22E23E22E22E23E22E22ECSAnalystProductionSinopec-H0386.HKHKDN3.723.6074,0844.64.42.22.10.439.5%9.3%13.1%3%HoraceTseLONGiGreenEnergy601012.SSHKDO80.50130.068,40828.122.318.914.77.4426.5%26.3%0.4%NetcashGaryZhouStorage/InfrastructureCIMCEnric3899.HKRMBO9.7313.302,52212.811.78.58.01.8514.4%14.5%3.1%NetcashIrisZhengDongfangElectric1072.HKHKDO8.9316.006,8148.57.95.04.60.667.8%7.9%3.6%NetcashGaryZhouApplicationBeijingSinoHytec688339.SSHKDO161.5300.01,809146.871.568.533.85.193.5%6.8%-10%BinWangDongyue0189.HKRMBO11.0414.403,1796.96.42.92.71.3119.0%17.9%5.3%NetcashHoraceTseWeichaiPower2338.HKHKDN12.9215.2018,2878.47.74.74.31.3115.6%15.3%4.2%NetcashJibangChaiNote:O=Outperform,N=Neutral.Source:Companydata,CreditSuisseestimatesChenDaiofCreditSuisseSecurities(China)Limited(“CSS”)providedadministrativeandothersupportinthepreparationofthisresearchreportthatdonotrequirealicense.CSSisaSino-foreignjointventurebetweenCreditSuisseAGandFounderSecuritiesCo.,Ltd.CSSisnotlicensedtoprovidesecuritiesinvestmentadvisoryservicebytheChinaSecuritiesRegulatoryCommissioninthePeople’sRepublicofChina.202520302035Production•Buildupahydrogensupplynetwork,utilisinggrey/brown(by-product)hydrogenorgreenhydrogenlocallytocaterforconsumptionbyregion•Progressingreenhydrogentechnologies•Targetsgreenhydrogenproductiontoreach100-200ktpa•Establishacomprehensivegreenhydrogensupplysystemandstriveforawiderutilisation•AchieveasignificantproportionofgreenhydrogeninenergymixStorage/Infrastructure•Establishapreliminaryhydrogensupplychain•Achieveamilestoneinhydrogenstoragetechnologies•Buildabatchofhydrogenrefullingstations•Establishacomprehensivehydrogensupplychaininstorage/infrastructuren/aApplication•TargetsFCEVownershiptoreach50,000unitsby2025•Striveforawiderutilisationofgreenhydrogeninend-markets•Promoteawiderhydrogenapplicationinvariousend-markets,includingtransportation,energystorage,industrialsetc.Others•Formulateandpromulgaterelatedpoliciestosupportthedevelopmentofhydrogenvaluechain•Acceleratetechnologicalinnovationacrossthehydrogenvaluechain•Formacomprehensivetechnologicalsystemindomesticmarketn/a24March2022ChinaNewEnergy—Hydrogen3ChinahydrogenvaluechainexposureFigure4:CompaniesthatareexposedtotheChinahydrogenvaluechainSource:Companydata,CreditSuisse24March2022ChinaNewEnergy—Hydrogen4ChinaHydrogenDevelopmentPlanfor2021-2035unveiledAftermuchhypeonChina’shydrogendevelopmentafterPresidentXi’snet-zeropledgebackin2020,on23March2022,theNationalDevelopment&ReformCommission(NDRC)togetherwiththeNationalEnergyAdministration(NEA)finallyannouncedtheChinaHydrogenDevelopmentPlanfor2021-2035.Thisisthefirstofficialhydrogengameplanannouncedbythecentralgovernment,puttingthepreviousguidancefromtheStateCouncilintoaction.Thefactthathydrogencanbeazero-emissionenergysourceonboththesupplyanddemandsideshasinducedhighexpectationsonitsroleintheworld’smovetowardscarbonneutrality.Overallspeaking,therearenotmanyspecificnumerictargetsthatarebeingsetoutinthisnewplan.Nonetheless,itsetsoutapathwayfor2025/2030/2035acrossthehydrogenvaluechain,which,inourview,isofkeysignificancetothemarket.ThismarksasignificantmilestonewhereChinanowplaceshydrogenasoneofthekeyenergysourcesforthenextfewdecades,echoingtheindustryestimateofhydrogencontributing~20%oftheworld’sprimaryenergyconsumptionby2050.Figure5:KeypointsofChina’shydrogendevelopmentplanfor2021-2035Source:NDRC,NEA,CreditSuisseestimatesFinancialsupportKeypointsinChina'sHydrogenMedium-toLong-termPlan(2021-2035)Production•Prioritiesby-producthydrogeninpetrochemical-concentratedareas,encouragelocalconsumption,andfurtherreducecostofsupply•Carryoutpilotprojectsofgreenhydrogeninareaswithabundantrenewablesresources•Exploredifferentelectrolysistechnologies,includingSOEC,offshoremarine,nuclearetc.•PromotetheapplicationoffuelcellengineinthefieldofbackuppowerStorage•Improvetheefficiencyofhigh-pressurehydrogenstorage,reducerelatedcost,andacceleratethecommercialisationprogress•Promotetheapplicationofcryogenicliquidhydrogenstorage&transportation,andexploredifferentstorage•CarryoutdemonstrationprojectsonpipelinetransporationInfrastructure•Buildouthydrogenrefuellingstationnetworkinaccordancetodemandandhydrogenmarketdevelopment•Supportthebuild-outofhydrogenrefuellingstationsvialeveragingonexistingretailstationnetwork•Explorethemodelofequippinghydrogenrefuellingstationswithon-sitehydrogenproductionandstorage•SupportqualifiedhydrogencompaniestolistinSTARMarketorChiNextIndustrial•Expandapplicationofhydrogenasanenergyreplacementinindustrials•SupportChina's"littlegiants"tobeinvolvedinthehydrogenvaluechainInnovation&Technologies•AcceleratethetechnologicalinnovationofPEMfuelcellengine,andfacilitatethecommercialisationprocess•Promotetechnologicalinnovationinfuelcellengines•FacilitatetheR&DinthekeycomponentsandequipmentApplicationTransportation•CoordinatethedevelopmentbetweenFCEV&BEV•Exploreapplicationoffuelcellsinships,aircraftandothersStorage•ExploreacombinationofrenewablespowergenerationandESSbasedonhydrogenPowergeneration•Setupcogenerationfacilityofhydrogenandrenewables24March2022ChinaNewEnergy—Hydrogen5ProductionGrey/brownhydrogen(by-producthydrogen)TheChinaHydrogenDevelopmentPlanfor2021-2035callsforby-producthydrogenasthekeysourceofsupplyintheneartomediumterm.Chinaisoneoftheleadinghydrogenproducersglobally,with33mntofannualproductionasoftoday.This,accordingtoourestimates,canatleastsupportthedemandfrom500,000FCEVsfromthetransportationsegment.Currently,mostofChina’shydrogenisproducedfromfossilfuelsasfeedstock(coal,methane,propane,ethane,etc.)intherefiningorpetrochemicalprocess,categorisedasgrey/brownhydrogen(by-producthydrogen),whichisestimatedtoaccountfor>90%oftotalhydrogenproductioninChinagiventhereliablesupplyandcostadvantage.Withanumberofethaneandpropanecrackersliningupforthecomingyears,webelieveby-producthydrogenvolumewillcontinuetorampup,providingcheapandstablesourcesofhydrogensupplies.Inthedevelopmentplan,Chinaaimstobuildupahydrogensupplynetworkbyutilisinggrey/brownhydrogen(by-producthydrogen)orgreenhydrogenlocallytocatertoconsumptionbyregion.Thisimpliesthatgrey/brownhydrogen(by-producthydrogen)shouldbeusedastransitionaryenergyunderthenext-zeropledge,wherebyawiderutilisationshouldbeexpected.Figure6:By-producthydrogencurrentlyaccountsfor~18%oftotalhydrogenproductioninChinaFigure7:By-producthydrogenisexpectedtoprovidelow-costandreliablehydrogensuppliesintheneartermSource:ChinaNationalInstituteofStandardisation,ChinaEV100,CreditSuisseestimatesSource:ChinaEV100,CreditSuisseestimatesFigure8:TophydrogenproducersinChinaaremostlypowergeneratorsorrefining/chemicalcompaniesFigure9:ChinaHydrogenAllianceexpectstheportionofgreenhydrogeninChinatorisefrom3%in2020to70%in2050Source:ESCN,CreditSuisseestimatesSource:ChinaHydrogenAlliance,CreditSuisseestimates62%17%18%3%Coaltohydrogen(coalgasification)Naturalgastohydrogen(steammethanereforming)Byproductsofthechemicalprocesses/othersElectrolysis-5.010.015.020.025.030.035.0Coaltohydrogen(coalgasification)Naturalgastohydrogen(steammethanereforming)ByproductsofchemicalprocessesElectrolysis(Rmb/kgofhydrogenproduction)CHNEnergy20%Sinopec14%JiangsuHuachangChemical1%Otherproducers65%0%10%20%30%40%50%60%70%80%90%100%2020E2030E2040E2050EFossilfuelstohydrogenByproductsofchemicalprocessesElectrolysisusingrenewableenergyBiomasstohydrogenandothers24March2022ChinaNewEnergy—Hydrogen6GreenhydrogenBy2025,materialprogressshouldbemadeincleanenergyhydrogenproductiontechnology,andahydrogenenergysupplysystemcenteredonindustrialby-producthydrogenandnearbyutilisationofhydrogenproducedfromrenewableenergysourcesshouldhavebeenestablished.Thetargetoutputofhydrogenproducedfromrenewableenergyshouldreach100k-200kt/year,whichistobecomeanimportantpartofnewlyaddedhydrogenconsumption.By2030,arelativelymoreestablishedcleanenergyhydrogenproductionsystemshouldbeformedandhydrogenproducedfromrenewableenergyshouldbewidelyused.By2035,theproportionofrenewableenergyhydrogenproductioninenergyconsumptionistoincreasesignificantly.AccordingtoLONGi,itconsumes50kWhelectricitytoproduceonekilogramofgreenhydrogen,andiftariffisloweredtoRmb0.1/kWh,thetotalelectricitycostonhydrogenproductionfromwaterelectrolysiswouldbeRmb5/kg,whichischeaperthanproducinghydrogenfromcoal.Atthisstage,unittariffofRmb0.2/kWhcouldbeachievedincertainareaswithabundantlightresources.Givenitconsumes4.5kWhtoproduceonecubicmetreofhydrogenthroughwaterelectrolysis,thecostofgreenhydrogenisaroundRmb0.9/cum.Consideringdepreciationofequipment,maintenancecostandrequiredassetreturn,totalcostatRmb1.5/cumispossible.Thecurrentconsumptionofhydrogenisaround33mntinChina,mostofitproducedfromcoalandpartfromnaturalgas,whileproducing1kgofhydrogenfromcoalwouldemit20kgofcarbon.If15%ofthehydrogenistobeproducedfromwaterelectrolysis,itwouldrequire180GWofsolarinstallation,aswellas40kunitsof1,000cumwaterelectrolysisproductionequipment.Therearethreescenariosforapplyinggreenhydrogen:(1)burninghydrogendirectly;(2)producingmethanolbycouplinghydrogenandcarbon;and(3)producinggreenammoniabycouplinghydrogenandnitrogen.Producinggreenhydrogenfromintermittentgreenelectricityismuchmoreeconomicalthanfromcontinuouselectricity,andismoreapplicabletoThreeNorthAreasinChinaandSoutheastcoastalareaswithabundantoffshorewindresources.Themainconstraintscomefromhighinterestrateandlowcarbonpriceinthedomesticmarket.Thenon-technicalcostinsolargenerationisalsohigherinChina,ataroundRmb0.2-0.3/kWh,mainlyduetolandrentalfeesandtax,relativelyhigherinterestrateinChina,andoutboundtransmission.Thedevelopmentofgreenhydrogenrequiressupportatthepolicyfrontaswellasfavourableinterestrates.Figure10:ExistinggreenhydrogenprojectsinoperationinChinaProjectSourcesofinvestmentCapacity(tonsperannum)StatusIntegratedprojectonnewmaterialsandhydrogenJinnengScience&Technology(603113.SS)65,236TrialoperationsinceJan-2021DemonstrationprojectofsolarpowerelectrolysisBaofengEnergy(600989.SS)13,047TrialoperationsinceFeb-2021Zhangjiakouelectrolysisprojects–PhaseIHaiboerNewEnergyTechnology1,460TrialoperationsinceSep-2020Zhangjiakouelectrolysisprojects–PhaseIIHaiboerNewEnergyTechnology7,665Scheduledstart-upbyend-2021ChengduelectrolysisprojectsChinaHuanengGroup4,286PreliminarypreparationstageSource:Companydata,CreditSuisseStorage/infrastructureOverthecourseof2021,wehaveseensomepolicy-wisemilestonewithregardtothestorageandinfrastructurefield,includingthereleaseofsafetytechnicalregulationsforhydrogenrefuellingstations.Inthelatestnationalhydrogenmedium-tolong-termplan,thecentralgovernmenthasalsofocusedconsiderablyonstorageandinfrastructure.Chinawillpromotetechnologyandmaterialinnovationinhydrogendistributionwithdueemphasisonsafety.Specifically,Chinawillseektoincreasetheefficiencyofhigh-pressuregaseoustransportation/storageinordertolowerthecostandenhancethelevelofcommercialisation.Liquidandsolid-statehydrogenaswellaspipelinetransportationwillalsobeexploredinordertoestablishalow-costanddiversifiedhydrogentransportationnetwork.Besides,Chinawilldobettercoordinationonhydrogenrefuelingstation(HSR)constructionsinordertobetterutiliselandresourcesandensuresafety.HSRconstructionsuponcurrentgasolinestationswillbeencouraged.24March2022ChinaNewEnergy—Hydrogen7Anotherkeystepweanticipateinthenearfutureistheannouncementofthelong-awaitednationalsafetystandardsonTypeIVcylinder—anofficialendorsementofTypeIVcylinder.Currently,35MPaTypeIIIcylinderisstillthemostcommontypeusedinon-vehiclehydrogencylinderinChina,whilstTypeIVcylinderhasbeenthemainstreamproductindevelopedmarketssuchastheUSandEurope.InChina,ithasyettobecomealegitimateequipment,primarilyduetoseveralsevereaccidentsrelatedtotheTypeIVcylinderinearly21stCenturywhichledtoaconservativepolicystance.However,wethinkTypeIVcylinderissettoriseifacomprehensivesafetymechanismisimplementedandmonitoredwell,givenitssuperiorityoverTypeIIIcylinderintermsoflightness.TheadoptionofTypeIVhydrogencylindershouldreducetheoperationalcostsofFCEVoverthelifetime,andtherebyaccelerateitscostparityvsICEVandBEV.ApplicationBesidesthetraditionalapplicationintherefiningsectorforhydrodesulphursationandhydrocracking,thecurrenthydrogenend-useapplicationsmainlyfocusonthetransportationside,especiallytheheavy-dutytrucks,wherebyourTCOanalysisbetweenFCEV&ICEVheavy-dutytruckssuggestsaninflectionpointin2024.Inthetransportationfield,ChinatargetsFCEVownershiptoreach50,000unitsby2025,andencouragesexploringtheapplicationoffuelcellsinships,aircraftandothers.Chinaalsoaimsforawiderrangeofend-useapplicationsofhydrogeninthelongterm,includingindustrial,powergeneration,andstorage.Industrial.Intheindustrialspace,Chinaisstrivingforanincreasingproportionofhydrogenintheenergymix,facilitatingthecarbon-intensiveindustries(syntheticammonia,syntheticmethanol,refining,andcoal-to-gas)totransitintoagreenerdevelopment.Powergeneration.Wehaveseenincreasingmarketattentionandopportunityforcombinedheatandpower(CHP)applicationsinChina.InSeptember2021,China(Foshan,GuangdongProvince)importedfour440kWofhydrogenfuelcellsfromDoosanFuelCellCo.toprovideelectricityandheattothelocalcommunity,flaggingapilotdemonstrationprojectinChina’sCHPapplication.Furthermore,Chinawilllookforvariousapplicationsbasedonregionalcharacteristics—forinstance,promotetheapplicationoffuelcellsinthefieldofbackuppowerinthepowerstations.Storage.Hydrogenenergystorageisaprocesswherebythesurplusofenergycreatedbyrenewablesisusedtopowerelectrolysistogeneratehydrogen,andthenhydrogenisstoredintheformofcompressedgas,cryogenicliquidorothers.Suchenergyinhydrogenformcanbestoredforalongerperiod,andlargerscalevsotherESSmethods.China,therefore,issettounlockthepotentialofhydrogenenergystorageinthemediumtolongterm,byexploringinnovativetechnologiestocombinerenewablespowergenerationandhydrogenenergystorage.Figure11:Globalhydrogendemandbyend-usesectorFigure12:Chinahydrogendemandbyend-usesectorSource:WoodMackenzieSource:WoodMackenzie,CreditSuisseestimatesRefineries3%Amonia37%Methanol33%Otherchemicals22%Otherusageincludingmobility5%24March2022ChinaNewEnergy—Hydrogen8CSviewontheChinahydrogenmarketpotentialInourreportChinaNewEnergy–Hydrogen:HowbesttoinvestHowbesttoplaytheChinahydrogenthemepublishedon15-March-2021,wedidadeep-diveintoChina’shydrogenmarketandassessedhowthepathwaycouldemergein2025-30onboththedemand(transportation)andthesupply(productionandstorage/infrastructure)side.Overall,webelievethedemandinflectionpointcouldbesoonerthanmarketexpectation,giventhevariouspolicysupportmovesbytheChinesegovernment.Otherthanthe2021-2035hydrogendevelopmentplanannounced,wehavealsowitnessedsignificantincentivesforthevaluechainonthecourseof2H21—thefirstbatchofdemonstrationcities(Beijing/Shagnhai/Guangdongcitycluster)wasannouncedinSeptember,followedbythesecondbatch(Hebei/Henancitycluster)inDecember.Onthedemandside,weexpectheavy-dutytruckstowitnessthebiggestgrowthpotentialinChina’sFCEVmarket.OurTCOanalysissuggestsaninflectionpointby2024,asweexpectFCEVheavy-dutytruckstoreachparityvsICEVs,similartowhatBEVshaveexperiencedin2015.Thiswouldbedrivenby:(1)lowerenergymodulecost;and(2)favourablesubsidyschemethatgearstowardsFCEVheavy-dutytrucks.Onthesupplyside,weexpectthehydrogenpumppricetobecompetitivevsdieselatUS$60/bbloil,thankstoa72%lowerdistributioncostby2025Evstoday,offeringconsumersamorecompellingcasetoswitchtoFCEVs.Figure13:OurTCOanalysisbetweenFCEVandICEVheavy-dutytruckssuggestsaninflectionpointin2024…Figure14:…whichcoulddriveanexponentialgrowthinFCEVsalesfrom2024onwards,similartoBEVsin2015Source:Industrydata,CreditSuisseestimatesSource:Industrydata,CreditSuisseestimatesFigure15:CurrentMoFsubsidyschemefavoursFCEVheavy-dutytrucks,astrongsupportforachievingparityin2024Figure16:China’shydrogenrefuelingstationswillreach3,000/13,000by2025/30,basedonCSestimatesSource:ChinaMinistryofFinance,CreditSuisseestimatesSource:Industrydata,CreditSuisseestimates-10020030040050060020202021202220232024202520262027202820292030FCEVICEV(Rmbper100km)-306090120150180210240-2004006008001,0001,2001,4001,60020102011201220132014201520162017201820192020ChinaxEVsales(LHS)ChinaFCEVsales(RHS)('000units)('000units)20192020202120222023202420252026202720282029xEV:FCEV:200300500300500452335374413751-100200300400500600700800Passengervehicles(80kW)Mediumbus(50kW)Largebus(60kW)Mediumtruck(80kW)Largetruck(>110kW&>31t)(RMB'000)20192020202120222023-2,0004,0006,0008,00010,00012,00014,000202020252030(No.ofrefuelingstations)24March2022ChinaNewEnergy—Hydrogen9ChinahydrogenplaysunderCScoverageBelowwehighlightsevencompaniesunderCScoveragethatareexposedtotheChinahydrogentheme.Thesesevencompaniesrepresentvariouspartsofthehydrogenvaluechain—fromproduction,storage/infrastructuretoapplication—andareallleadingplayerswithdominantmarketsharein2025-30.WiththeannouncementoftheChinaHydrogenDevelopmentPlanfor2021-2035,webelievethesesevencompaniesshouldbebestpositionedtobenefitfromthewaveofspending,giventheirleadingpositions.Figure17:Valuationcomparisons—ChinahydrogenplaysunderCScoverage(pricedasof23March2022)MktcapP/E(x)EV/EBITDAP/BROE(%)Div.yldNetD/ECompanyTickerFXRat.PriceTPUS$mn22E23E22E23E22E22E23E22E22ECSAnalystProductionSinopec-H0386.HKHKDN3.723.6074,0844.64.42.22.10.439.5%9.3%13.1%3%HoraceTseLONGiGreenEnergy601012.SSHKDO80.50130.068,40828.122.318.914.77.4426.5%26.3%0.4%NetcashGaryZhouStorage/InfrastructureCIMCEnric3899.HKRMBO9.7313.302,52212.811.78.58.01.8514.4%14.5%3.1%NetcashIrisZhengDongfangElectric1072.HKHKDO8.9316.006,8148.57.95.04.60.667.8%7.9%3.6%NetcashGaryZhouApplicationBeijingSinoHytec688339.SSHKDO161.5300.01,809146.871.568.533.85.193.5%6.8%-10%BinWangDongyue0189.HKRMBO11.0414.403,1796.96.42.92.71.3119.0%17.9%5.3%NetcashHoraceTseWeichaiPower2338.HKHKDN12.9215.2018,2878.47.74.74.31.3115.6%15.3%4.2%NetcashJibangChaiNote:O=Outperform,N=Neutral.Source:Companydata,CreditSuisseestimatesFigure18:HydrogenexposureforChinahydrogenplaysunderCScoverage%EPScontributionfromhydrogenMarketshareintheirrespectivehydrogenlandscapeCompanyTickerExposure20202025E2030E20202025E2030EProductionSinopec-H0386.HKHydrogenproduction&refuellingstationnetwork0%3%5%15%25%30%LONGiGreenEnergy601012.SSGreenhydrogenproductionequipment0%5%7%0%20%20%Storage/InfrastructureCIMCEnric3899.HKTubetrailer,HRS,andon-vehiclecylinder2%24%35%14%21%20%DongfangElectric1072.HKHydrogenproduction,storage,transportation,charging0%2%5%7%10%10%ApplicationBeijingSinoHytec688339.SSFuelcellengine,fuelcellstacks,MEA100%100%100%18%25%25%Dongyue0189.HKProtonExchangeMembrane(PEM)0%5%13%10%50%80%WeichaiPower2338.HKFuelcellHDTs,fuelcellengine,fuelcellstacks0%2%10%0%26%35%Source:CreditSuisseestimatesProductionSinopec(0386.HK)SinopectargetstobeChina’s#1hydrogenintegratedplayer,themostvocalinenergytransitionamongsttheChineseoilmajors.Asofend-2021,Sinopechad74hydrogenrefuelingstations(HRSs)inoperation,ofwhicharound35werebeingusedasashowcaseduringtheBeijingWinterOlympicsinFebruary2022.Beyondthis,Sinopechassetatargetofbuilding1,000HRSsby2025,leveragingitsexisting30,000+retailstationstorolloutanintegratedrefuelingstationnetworkinChina.Thecompanywillalsogrowitshydrogensupplycapabilitybyleveragingitsexistingproductioncapacityof3.5mntperannumofby-producthydrogenfromitsrefineries,aswellasdevelopgreenhydrogencapacitydowntheroad.WerateSinopec-HNEUTRALwithanSoTP-basedtargetpriceofHK$3.60.24March2022ChinaNewEnergy—Hydrogen10LONGiGreenEnergyTech(601012.SS)LONGiiscommittedtodevelopinggreenhydrogen,andsafetyisthekeyfocusintheproductionequipmentwhichhasalifecycleof20years.Itstartedstrategicresearchinhydrogenin2018andhasworkedwithdomesticaswellasoverseasresearchinstitutesondevelopingtechnologiesinwaterelectrolysis.InMarch2021,itofficiallyformedLONGiHydrogenTechnologycompanyinXi’an.InMay2021,LONGiandtheWuxigovernmentjointlyestablishedXi'anLONGiGreenEnergyVenturetobuildanelectrolysedwaterhydrogenproductionequipmentbaseinWuxi,Jiangsu.Asof2021,theannualcapacityalreadyreached500MWandtheelectrolyserisindependentlydevelopedandproducedbyLONGi.LONGitargetsanannualproductioncapacityof1.5GWofhydrogenequipmentby2022and5-10GWinthenextfiveyears.WerateLONGiOUTPERFORMwithaDCF-basedtargetpriceofRmb130.Storage/infrastructureCIMCEnric(3899.HK)CIMCEnricisaleadingequipmentmanufacturerandintegratedengineeringserviceproviderforcleanenergy(mainlynaturalgas),chemicalandliquidfoodindustries.Inthehydrogenspace,Enricprovidessolutionsforstorage,transportationandrefuellingofhydrogen,aswellasproductionofhydrogen.Enric’skeyofferingsforhydrogenincludehydrogentubebundles,hydrogentubebundlessemi-trailers,liquidhydrogenstoragetanks,HRSs,hydrogenstoragevessels,on-vehiclehydrogenstoragecylinders,andon-vehiclehydrogensupplysystems.InMarch2021,EnricandHexagonPurusestablishedJVsforon-vehiclehydrogencylindersandon-vehiclehydrogensupplysystems.InMay2021,EnricestablishedaJVwithAnsteelforLNGproductionandhydrogenco-productionfromcokeovengas.InMarch2022,EnricsignedanMoU(memorandumofunderstanding)withPanasonictojointlydevelophydrogencombinedheatingandpower(CHP)systeminChina.WeestimatehydrogensalesofEnricreachedRmb190mnin2021,representingover40%YoYgrowthfromRmb130mnin2020andaccountingforabout1%ofitsgroupsales.By3Q21,hydrogenorderbacklogofEnricwasRmb67mn,up130%YoY.ThecompanytargetstoachieveRmb3-4bnofhydrogensalesby2025(weestimatethiswouldaccountforover10%ofthegroupsales),ofwhich50-70%isexpectedtobefromthestorageandtransportationofhydrogen.WearepositiveonthegrowthprospectofEnric’shydrogenbusinessandweviewthepolicytargetof50kFCEVsby2025andthepromotionofHRSandhydrogentransportationsupportiveofthegrowthofEnric’shydrogenstorageandtransportationofferings.WemaintainourOUTPERFORMratingandTPofHK$13.30.DongfangElectric(1072.HK)AccordingtoXiaoxiangMorningNews,thefirstphaseoftheDongfangHydrogenEnergyIndustrialParkproject(atatotalinvestmentofRmb600mn)startedconstructioninNovember2021andisexpectedtobecompletedin2023.Theprojectwillbuildanenterpriseclusterofcorerawmaterialsandcomponentsforhydrogenfuelcells,coveringhydrogenproduction,hydrogenstorageandtransportation,hydrogenrefuelingandcomprehensiveutilisationofhydrogenenergy.On26January,thefirstbatchoftenhydrogenfuelcellbuses(usingthehydrogenenergyenginedevelopedbyDongfangHydrogenEnergy)inDeyang,Sichuanhasbeenofficiallyputintocommercialoperation.WerateDongfangElectric-HOUTPERFORMwithatargetpriceofHK$16.00basedon14x2022EP/Etargetmultiple.24March2022ChinaNewEnergy—Hydrogen11ApplicationBeijingSinoHytec(688339.SS)BeijingSinoHytecisoneoftheleadingfuelcellenergymodulesuppliersinChina,with32%marketsharein2021,ranking#1intheindustry.Thecompanymanufacturesandsellsfuelcellenergymodulesforcommercialvehicles,suchascitybuses,intercitybuses,andlogisticsvehicles.Thecompanyalsoprovidesfuelcellkeycomponentsandrelatedtechnologydevelopmentservices,suchassupportingtheR&DprojectsofToyotaandTsinghuaUniversity.WebelieveBeijingSinoHytecisakeybeneficiaryoftherisingimportanceofthehydrogenindustryinChina.SinoHytecpenetratedfuelcellstackandMEAtechnologybyacquiringkeycomponentsuppliersShen-LiandYi-Qing.Meanwhile,thecompanyalsoestablishedaJVnamedUnitedFuelCellSystemR&D(Beijing)Co.,withToyota,tosellfuelcellsystem"TLPower100",becomingthefirstsuppliertodevelopandsellfuelcellsystemforcommercialvehiclesinChina.DongyueGroup(0189.HK)Dongyue,asafluorochemicalplayer,hasleverageditsyearsofexpertiseintoProtonExchangeMembrane(PEM)space,witha0.5mnsqmannualcapacity,asof2021.AlthoughPEMonlycontributed~1%ofDongyue’stotalrevenueinFY21,whichimpliesamid-single-digitutilisationrateduringtheyear,weestimateitstoplinerevenuefromPEMbusinesstoregisterastrongperformanceduring2021-25,ridingon:(1)thesurgingdemandfromPEMfuelcellengine,and(2)theexpeditingimportsubstitutionprocess.Furthermore,Dongyueisthesoleenterpriseinvolvedinallofthefirst-phasedemonstrationcitygroups,whichshouldprovidethecompanywithapolicypremiumsupport,inouropinion.WerateDongyueOUTPERFORMwithtargetpriceofHK$14.40.WeichaiPower(2338.HK)WeichaiPoweristhelargestheavy-dutytruck(HDT)enginesupplierinChinawith~32%marketsharein2021.LeveragingitsinvestmentinBallard(19.9%stake)plusaJVset-upwithBallardinChina,WeichaiisalsoleadinginfuelcellengineforHDT,with~20%marketsharein2021.AsWeichaipartnerswithSinotruk,thesecond-largestHDTmakerinChina,infuelcellHDTproduction,webelieveWeichai’sfuelcellenginemarketsharewouldfurtherincreaseinthefuture.WeassignaNEUTRALratingconsideringtheprojectedsectordownturninChinaHDTmarketwithsalesvolumedeclineof21%/5%/5%in2022/23/24E.WerateWeichaiNEUTRALwithatargetpriceofHK$15.20basedon10x2022EP/Etargetmultiple(Weichai’saverageP/Esince2018).HydrogenpublicationsbytheCSGlobalResearchTeamPart1:PrimerontheEuropeanvaluechainPart2:PrimerontheAPACvaluechainPart3:ReportfromEuropeanteamonSupply/Demand,andInsightsfromChinaNewEnergyteamPart4:PrimerontheAmericasvaluechainSustainableEnergy:InitiatingcoverageofEuropeanHydrogen&Renewablepure-plays24March2022ChinaNewEnergy—Hydrogen12ValuationMethodologyandRisksTargetPriceandRatingValuationMethodologyandRisks:(12months)forBeijingSinoHytecCo.,Ltd(688339.SS)Method:OurTPofRmb300forBeijingSinoHytecCo.,Ltdisderivedfromdiscountedcashflow(DCF),whichimplies14x2022EP/S(price-to-sales).Asthefuelcellindustryisstillataveryearlystage,webelieveDCFcouldcapturethelong-termgrowthofthefuelcellindustryandalsothedevelopmentofSinoHytec.Webelievethefuelcellindustrywilldevelopinasimilarpathaslithium-ionbatteryandbatteryelectricvehicles,whosesalesvolumehasjumpedfromonlythousandsunitsin2011to>1.4mnunitsin2020.WehaveanOUTPERFORMratingonSinoHytecmainlybecausewebelievethedevelopmentofthefuelcellindustryinChinawillaccelerateinthecomingyears,whichwillbenefitleadingplayerslikeSinoHytec.Asoneoftheleadingfuelcellenginesuppliers,SinoHyteccouldleveragethelargemarketsizeinChinaandexistingmaturefuelcelltechnologytofurtherstrengthenitsowncompetitiveness.Moreover,SinoHytecalsoestablisheditsownupstreamsupplychain,includingPEM,MEA,etc.Andweexpectitsowncorecomponentssupplychain,togetherwithsupplyfromotherleadingfuelcellstackproducerscouldfurtherstrengthenitscompetitiveness.Risk:DownsideriskstotheOUTPERFORMratingandtargetpriceofRmb300forBeijingSinoHytecCo.,Ltdinclude:(1)slower-than-expectedfuelcellcostreduction;(2)higher-than-expectedsubsidycut;(3)changeoffuelcelltechnologyroadmap;and(4)worse-than-expectedcustomerexpansion.TargetPriceandRatingValuationMethodologyandRisks:(12months)forCIMCEnric(3899.HK)Method:WerateCIMCEnricOUTPERFORM,aswearepositiveonEnric'sgrowthpotentialinChina'sfast-growinghydrogen,aswellasother,markets.OurHK$13.3targetpriceisbasedon18x2022EP/Etargetmultipleatsimilarlevelofitshistoricalhighs,duetonewhydrogenbusinessprospectsaswellasfastrecoveryfromthepandemic.TheP/Emultipleimpliedbyourtargetishigherthanconsensus,aswebelievethesustainabilityofeconomicrecoverywasnotadequatelyreflectedbyconsensus.Risk:RiskstoourHK$13.3targetpriceandOUTPERFORMratingforCIMCEnricinclude:(1)slower-than-expecteddeploymentofFCEVandresultantslowdevelopmentofon-vehiclehydrogencylindermarket;(2)asuddendropinoilprice,leadingtolessLNGdemandandalsofewerLNGequipmentorders;(3)slowpenetrationoftankcontainersintheChinamarket;and(4)Chinabaijumarketshowingweaker-than-expecteddemandonequipment.TargetPriceandRatingValuationMethodologyandRisks:(12months)forDongfangElectricCorporationLimited(1072.HK)Method:WebaseourHK$16.0targetpriceforDongfangElectricCorporationLimited(DEC)on14.0xFY22EP/E.WerateDECOUTPERFORMgiventheordersmomentumandearningsgrowthoutlook.Risk:RiskstoourHK$16.0targetpriceandOUTPERFORMratingforDongfangElectricCorporationLimited(DEC)include:(1)Newnuclearpowerplantapproval/constructionandnuclearpowertendermaybefurtherdelayed.(2)Changesincompetition.(3)Highersteelprice.TargetPriceandRatingValuationMethodologyandRisks:(12months)forDongfangElectricCorporationLimited(600875.SS)Method:WebaseourRmb15.9targetpriceforDongfangElectricCorporationLimited(DEC)on14xFY22EP/E.WerateDECUNDERPERFORMbecausewethinkthecurrentsharepriceisexpensivegiventheordersmomentumandearningsgrowthoutlook.Risk:RiskstoourRmb15.9targetpriceandUNDERPERFORMratingforDongfangElectricCorporationLimited(DEC)include:(1)Newnuclearpowerplantapproval/constructionandnuclearpowertendermaybefurtherdelayed.(2)Changesincompetition.(3)Changesinsteelprice.(4)Uncertaintiesinoverseasmarket,politicallyandeconomically,maybringnegativeimpactonnewordersandevencancelbacklog.(5)Changesingasprices.TargetPriceandRatingValuationMethodologyandRisks:(12months)forDongyueGroup(0189.HK)Method:OurvaluationofDongyueGroupatHK$14.4isbasedonourSum-of-the-PartsNAV.WevalueDongyue'sbusinesssegmentsunderthefollowingassumptions:(1)Polymer:7.5x2023EEV/EBITDAtargetmultiple;(2)OrganicSilicone:4x2023EEV/EBITDAtargetmultiple;(3)Refrigerants:4x2023EEV/EBITDAtargetmultiple;(4)PEM:5x2025EP/Stargetmultiple,higherthandomesticfuelcellsystemproducer's~3x2025EP/Storeflectamuchlargermarketsharepotential;and(5)Others:3x2023EEV/EBITDAtargetmultiple.WerateDongyueOUTPERFORMaswethinkthecompanycanleverageonitsverticalintegratedexposureinthefluorochemicalvaluechainandbenefitfromtheS-Dimbalanceofkeyproductsi.e.PVDF.Risk:RiskstoourtargetpriceofHK$14.4andOUTPERFORMratingforDongyueGroupincludethefollowing:(1)slower-than-expectedFCEVsmarketdevelopmentinChinaduring14thFive-YearPlan(2021-25)period;(2)tradetensionexacerbateswhichwillleadto24March2022ChinaNewEnergy—Hydrogen13sluggishoverseasdemand;(3)slower-than-expectedcapacityadditionsoforganicsilicone;(4)competitivelandscapefor3rdgenerationofrefrigerantsdelays;and(5)stronger-than-expectedPVDFcapacityexpansionwhichleadstosharpPVDFpricecorrection.TargetPriceandRatingValuationMethodologyandRisks:(12months)forLONGiGreenEnergyTechnology(601012.SS)Method:OurtargetpriceofRmb130forLONGiGreenEnergyTechnologyisderivedfromaDCFmodel,assumingaWACCof8%(costofequityat12%andcostofdebtat4%)with3%terminalgrowthrate.Wearepositiveonlong-termsolardemandandwebelieveLONGiislikelytocontinuetoincreaseitsmarketshare,andwethereforeratethestockwithaOUTPERFORMrating.Risk:KeyriskstoourOUTPERFORMratingandTPofRmb130forLONGiGreenEnergyTechnologyare:(1)lower-than-expectedmono-Siwaferandmodulepricesand(2)less-than-expectedcostsavingsinthenextfewyears.TargetPriceandRatingValuationMethodologyandRisks:(12months)forSinopec(0386.HK)Method:OurtargetpriceofHK$3.6/shareforSinopec-H(ChinaPetroleum&ChemicalCorp)isbasedonoursum-of-the-parts(SoTP)valuation.WevalueSinopec'sexploration&productionbusinessusingDCF(discountedcashflow)andan8%discountrate,a2%perpetualgrowthrateandalong-termcrudeoilpriceofUS$65/bbl.WevalueSinopec'sdownstreambusinesseson2022valuationmultiples:therefiningbusinessat3.5xEV/EBITDA,chemicalbusinessat3.5xEV/EBITDAandthemarketingbusinessat5.5xEV/EBITDA(implying11x2022EP/E).OurNEUTRALratingforSinopec-Hisbasedontherationalethat:(1)demandofrefinedoilandpetrochemicalsinChinahasrecoveredtopre-COVID-19level;(2)thehighlevelearningsexposuretothedomesticmarketshouldprotectearningsamidasecondwaveofCOVID-19outbreakoverseas.Risk:KeydownsiderisksthatcouldimpedetheachievementofourHK$3.6/sharetargetpriceforSinopec-H(ChinaPetroleum&ChemicalCorp)andourNEUTRALratinginclude:(1)arecession-typeslowdownintheChineseeconomydraggingondomesticoildemandandpetrochemicaldemand.SinopecasthelargestdownstreammanufacturerinChinawouldbeimpacted;(2)higheroilpricetrendswhichhaveanegativeimpactonproductspread;and(3)significantcapacityexpansioninChina'srefiningandpetrochemicalindustrysqueezingmargins.KeyupsiderisksthatcouldimpedetheachievementofourHK$3.6/sharetargetpriceforSinopec-H(ChinaPetroleum&ChemicalCorp)andourNEUTRALratinginclude:(1)astrong-than-expectedrecoveryintheChineseeconomyboostingondomesticoildemandandpetrochemicaldemand;and(2)loweroilpricetrendswhichhaveapositiveimpactonproductspread.TargetPriceandRatingValuationMethodologyandRisks:(12months)forSinopec(600028.SS)Method:OurRmb3.8/sharetargetpriceforSinopec-Aisderivedbyapplyinga20%premiumtoourSinopec-HTPofHK$3.6/share,wherethepremiumisatanaveragelevelrelativetohistory(2015tocurrent).OurNEUTRALratingforSinopec-Aisbasedontherationalethat:(1)RefiningsegmentcouldfacemarginsqueezeasoilgoesaboveUS$80/bbl,wherethedomesticproductpricemechanismcoulddelayorcancelgasoline&dieselpricehikestopreventdomesticinflationfromoverheating;(2)Chemicalsegmentcouldbevulnerabletopetrochemicalspreadsroll-over.Risk:KeydownsiderisksthatcouldimpedetheachievementofourRmb3.8/sharetargetpriceforSinopec-A(ChinaPetroleum&ChemicalCorp)andourNEUTRALratinginclude:(1)arecession-typeslowdownintheChineseeconomydraggingondomesticoildemandandpetrochemicaldemand.SinopecasthelargestdownstreammanufacturerinChinawouldbeimpacted;(2)higheroilpricetrendswhichhaveanegativeimpactonproductspread;and(3)significantcapacityexpansioninChina’srefiningandpetrochemicalindustrysqueezingmargins.KeyupsiderisksthatcouldimpedetheachievementofourRmb3.8/sharetargetpriceforSinopec-A(ChinaPetroleum&ChemicalCorp)andourNEUTRALratinginclude:(1)astrong-than-expectedrecoveryintheChineseeconomyboostingondomesticoildemandandpetrochemicaldemand;and(2)loweroilpricetrendswhichhaveapositiveimpactonproductspread.TargetPriceandRatingValuationMethodologyandRisks:(12months)forWeichaiPower(000338.SZ)Method:OurRmb17.60targetpriceforWeichaiPower(Ashare)isbasedon14.0x2022EP/E(price-to-earnings)ratio,40%premiumoverWeichaiHsharevaluation.Weichai'sA-Hpremiumtendstoreachthehighestlevel(over40%)duringHDTsectordownturns,asHsharereactsmorenegatively.WerateWeichaiPower(Ashare)withNEUTRALratingaswebelievetheupcomingChinaheavy-dutytruck(HDT)sectordownturnwoulddrivedownWeichai'sHDTenginessales,whilethelosswouldbepartiallycompensatedbyWeichai'sbusinessdiversification(i.e.off-roadengines).Risk:UpsideriskstoourNEUTRALratingandRmb17.60targetpriceinclude:(1)stronger-than-expectedHDTsales;(2)fastermarketsharegaininexcavatorandtractorengines.Downsiderisksinclude:(1)weakerHDTdemand;(2)Downturninconstructionandagriculturalmachinerymarket;(3)slowermarketshareaccretion.24March2022ChinaNewEnergy—Hydrogen14CompaniesMentioned(Priceasof23-Mar-2022)AngangSteelCompanyLtd(0347.HK,HK$3.47)AngangSteelCompanyLtd(000898.SZ,Rmb3.54)BeijingSinoHytecCo.,Ltd(688339.SS,Rmb178.0,OUTPERFORM[V],TPRmb300.0)CIMCEnric(3899.HK,HK$9.73,OUTPERFORM[V],TPHK$13.3)DongfangElectricCorporationLimited(1072.HK,HK$8.93,OUTPERFORM[V],TPHK$16.0)DongfangElectricCorporationLimited(600875.SS,Rmb14.73,UNDERPERFORM,TPRmb15.9)DongyueGroup(0189.HK,HK$11.04,OUTPERFORM[V],TPHK$14.4)LONGiGreenEnergyTechnology(601012.SS,Rmb80.5,OUTPERFORM[V],TPRmb130.0)Panasonic(6752.T,¥1,216)Sinopec(0386.HK,HK$3.72,NEUTRAL,TPHK$3.6)Sinopec(600028.SS,Rmb4.13,NEUTRAL,TPRmb3.8)WeichaiPower(000338.SZ,Rmb14.16,NEUTRAL,TPRmb17.6)WeichaiPower(2338.HK,HK$12.92,NEUTRAL,TPHK$15.2)DisclosureAppendixAnalystCertificationHoraceTse,BinWang,JibangChai,IrisZheng,CFA,DanielCui,GaryZhou,CFA,SabrinaShao,CFAandCynthiaWueachcertify,withrespecttothecompaniesorsecuritiesthattheindividualanalyzes,that(1)theviewsexpressedinthisreportaccuratelyreflecthisorherpersonalviewsaboutallofthesubjectcompaniesandsecuritiesand(2)nopartofhisorhercompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendationsorviewsexpressedinthisreport.3-YearPriceandRatingHistoryforBeijingSinoHytecCo.,Ltd(688339.SS)688339.SSClosingPriceTargetPriceDate(Rmb)(Rmb)Rating15-Mar-21266.12380.00O21-Jun-21272.0029-Oct-21247.00350.00O01-Feb-22209.14300.00Asterisksignifiesinitiationorassumptionofcoverage.OUTPERFORM3-YearPriceandRatingHistoryforCIMCEnric(3899.HK)3899.HKClosingPriceTargetPriceDate(HK$)(HK$)Rating15-Mar-216.047.50O24-Mar-215.197.3025-Aug-2111.4011.8013-Dec-2110.6616-Dec-2111.9013.30OAsterisksignifiesinitiationorassumptionofcoverage.OUTPERFORM24March2022ChinaNewEnergy—Hydrogen153-YearPriceandRatingHistoryforDongfangElectricCorporationLimited(1072.HK)1072.HKClosingPriceTargetPriceDate(HK$)(HK$)Rating01-Apr-196.709.00O10-Apr-197.109.2002-Sep-194.519.5003-Sep-194.4131-Mar-203.838.00O03-May-216.908.5030-Aug-2110.4412.0009-Sep-2113.3616.00Asterisksignifiesinitiationorassumptionofcoverage.OUTPERFORM3-YearPriceandRatingHistoryforDongfangElectricCorporationLimited(600875.SS)600875.SSClosingPriceTargetPriceDate(Rmb)(Rmb)Rating01-Apr-1911.087.70U10-Apr-1911.757.9002-Sep-199.698.1003-Sep-199.6231-Mar-208.446.80U09-May-209.377.9003-May-2111.398.4030-Aug-2115.8511.9009-Sep-2118.0115.90Asterisksignifiesinitiationorassumptionofcoverage.UNDERPERFORM3-YearPriceandRatingHistoryforDongyueGroup(0189.HK)0189.HKClosingPriceTargetPriceDate(HK$)(HK$)Rating15-Mar-215.516.90O29-Apr-216.9330-Jul-2116.3017.50O30-Aug-2123.5530.0013-Sep-2123.9531.0011-Oct-2114.4028.0003-Jan-2212.5623.0022-Mar-229.7214.40Asterisksignifiesinitiationorassumptionofcoverage.OUTPERFORM24March2022ChinaNewEnergy—Hydrogen163-YearPriceandRatingHistoryforLONGiGreenEnergyTechnology(601012.SS)601012.SSClosingPriceTargetPriceDate(Rmb)(Rmb)Rating30-Apr-1916.2112.14U18-Jul-1917.1913.5728-Aug-1919.9314.2923-Apr-2019.8917.8627-Aug-2043.2933.5702-Nov-2052.6652.14N10-Mar-2160.7192.86O30-Aug-2197.30130.00Asterisksignifiesinitiationorassumptionofcoverage.UNDERPERFORMNEUTRALOUTPERFORM3-YearPriceandRatingHistoryforSinopec(0386.HK)0386.HKClosingPriceTargetPriceDate(HK$)(HK$)Rating25-Mar-196.136.05N10-Jul-194.975.4626-Aug-194.455.0710-Sep-194.665.85O04-Oct-194.495.4615-Jan-204.555.8505-Feb-204.024.39N03-Mar-203.954.1912-Mar-203.583.9002-Apr-203.963.8029-Apr-203.824.1002-Jul-203.243.6106-Oct-203.093.7028-Oct-203.043.4011-Nov-203.674.50O19-Jan-214.085.0015-Mar-214.475.5029-Mar-214.215.8012-Apr-214.076.5001-Jun-214.226.0029-Jun-213.954.70N19-Jul-213.664.2028-Oct-213.784.3010-Jan-223.864.0028-Jan-224.063.9014-Mar-223.433.60Asterisksignifiesinitiationorassumptionofcoverage.NEUTRALOUTPERFORM24March2022ChinaNewEnergy—Hydrogen173-YearPriceandRatingHistoryforSinopec(600028.SS)600028.SSClosingPriceTargetPriceDate(Rmb)(Rmb)Rating25-Mar-195.825.30N10-Jul-195.205.0026-Aug-194.974.7010-Sep-195.225.3004-Oct-195.024.9015-Jan-205.095.4005-Feb-204.644.10U03-Mar-204.713.8012-Mar-204.643.6002-Apr-204.553.5029-Apr-204.443.7009-May-204.424.50N02-Jul-204.014.0028-Oct-203.883.7011-Nov-204.124.80O19-Jan-214.175.4015-Mar-214.616.0029-Mar-214.296.3012-Apr-214.397.0001-Jun-214.476.5029-Jun-214.355.00N19-Jul-214.074.4028-Oct-214.204.6010-Jan-224.344.2028-Jan-224.194.1014-Mar-224.113.80Asterisksignifiesinitiationorassumptionofcoverage.NEUTRALUNDERPERFORMOUTPERFORM3-YearPriceandRatingHistoryforWeichaiPower(000338.SZ)000338.SZClosingPriceTargetPriceDate(Rmb)(Rmb)Rating26-Mar-1911.247.31U14-Aug-1910.9810.71N30-Aug-1911.5811.0702-Dec-1913.3111.8827-Mar-2012.6212.0630-Apr-2013.4014.4904-May-2013.4015.75O09-May-2014.3818.0028-Aug-2014.9017.2030-Oct-2015.1317.7001-Feb-2121.8825.3015-Mar-2120.3725.8031-Mar-2119.2423.6021-Jun-2116.75NC08-Dec-2118.0117.60NAsterisksignifiesinitiationorassumptionofcoverage.EffectiveJuly3,2016,NCdenotesterminationofcoverage.UNDERPERFORMNEUTRALOUTPERFORMNOTCOVERED24March2022ChinaNewEnergy—Hydrogen183-YearPriceandRatingHistoryforWeichaiPower(2338.HK)2338.HKClosingPriceTargetPriceDate(HK$)(HK$)Rating26-Mar-1912.268.50U14-Aug-1910.8811.90N30-Aug-1912.0012.3002-Dec-1913.7213.2027-Mar-2012.8813.4030-Apr-2013.5616.10O04-May-2013.8017.5028-Aug-2015.7216.0030-Oct-2014.6416.8001-Feb-2121.7026.1015-Mar-2121.7526.6031-Mar-2119.2024.2021-Jun-2115.92NC08-Dec-2115.9815.20NAsterisksignifiesinitiationorassumptionofcoverage.EffectiveJuly3,2016,NCdenotesterminationofcoverage.UNDERPERFORMNEUTRALOUTPERFORMNOTCOVEREDAsofDecember10,2012Analysts’stockratingaredefinedasfollows:Outperform(O):Thestock’stotalreturnisexpectedtooutperformtherelevantbenchmarkoverthenext12months.Neutral(N):Thestock’stotalreturnisexpectedtobeinlinewiththerelevantbenchmarkoverthenext12months.Underperform(U):Thestock’stotalreturnisexpectedtounderperformtherelevantbenchmarkoverthenext12months.Relevantbenchmarkbyregion:Asof10thDecember2012,Japaneseratingsarebasedonastock’stotalreturnrelativetotheanalyst'scoverageuniversewhichconsistsofallcompaniescoveredbytheanalystwithintherelevantsector,withOutperformsrepresentingthemostattractive,Neutralsthelessattractive,andUnderperformstheleastattractiveinvestmentopportunities.Asof2ndOctober2012,U.S.andCanadianaswellasEuropean(excludingTurkey)ratingsarebasedonastock’stotalreturnrelativetotheanalyst'scoverageuniversewhichconsistsofallcompaniescoveredbytheanalystwithintherelevantsector,withOutperformsrepresentingthemostattractive,Neutralsthelessattractive,andUnderperformstheleastattractiveinvestmentopportunities.ForLatinAmerica,TurkeyandAsia(excludingJapanandAustralia),stockratingsarebasedonastock’stotalreturnrelativetotheaveragetotalreturnoftherelevantcountryorregionalbenchmark(India-S&PBSESensexIndex);forChinaAsharetherelevantindexistheShanghaiShenzhenCSI300(CSI300);priorto2ndOctober2012U.S.andCanadianratingswerebasedon(1)astock’sabsolutetotalreturnpotentialtoitscurrentsharepriceand(2)therelativeattractivenessofastock’stotalreturnpotentialwithinananalyst’scoverageuniverse.ForAustralianandNewZealandstocks,theexpectedtotalreturn(ETR)calculationincludes12-monthrollingdividendyield.AnOutperformratingisassignedwhereanETRisgreaterthanorequalto7.5%;UnderperformwhereanETRlessthanorequalto5%.ANeutralmaybeassignedwheretheETRisbetween-5%and15%.TheoverlappingratingrangeallowsanalyststoassignaratingthatputsETRinthecontextofassociatedrisks.Priorto18May2015,ETRrangesforOutperformandUnderperformratingsdidnotoverlapwithNeutralthresholdsbetween15%and7.5%,whichwasinoperationfrom7July2011.Restricted(R):Incertaincircumstances,CreditSuissepolicyand/orapplicablelawandregulationsprecludecertaintypesofcommunications,includinganinvestmentrecommendation,duringthecourseofCreditSuisse'sengagementinaninvestmentbankingtransactionandincertainothercircumstances.NotRated(NR):CreditSuisseEquityResearchdoesnothaveaninvestmentratingorviewonthestockoranyothersecuritiesrelatedtothecompanyatthistime.NotCovered(NC):CreditSuisseEquityResearchdoesnotprovideongoingcoverageofthecompanyorofferaninvestmentratingorinvestmentviewontheequitysecurityofthecompanyorrelatedproducts.VolatilityIndicator[V]:Astockisdefinedasvolatileifthestockpricehasmovedupordownby20%ormoreinamonthinatleast8ofthepast24monthsortheanalystexpectssignificantvolatilitygoingforward.Analysts’sectorweightingsaredistinctfromanalysts’stockratingsandarebasedontheanalyst’sexpectationsforthefundamentalsand/orvaluationofthesectorrelativetothegroup’shistoricfundamentalsand/orvaluation:Overweight:Theanalyst’sexpectationforthesector’sfundamentalsand/orvaluationisfavorableoverthenext12months.MarketWeight:Theanalyst’sexpectationforthesector’sfundamentalsand/orvaluationisneutraloverthenext12months.Underweight:Theanalyst’sexpectationforthesector’sfundamentalsand/orvaluationiscautiousoverthenext12months.Ananalyst’scoveragesectorconsistsofallcompaniescoveredbytheanalystwithintherelevantsector.Ananalystmaycovermultiplesectors.24March2022ChinaNewEnergy—Hydrogen19CreditSuisse'sdistributionofstockratings(andbankingclients)is:GlobalRatingsDistributionRatingVersusuniverse(%)Ofwhichbankingclients(%)Outperform/Buy56%(30%bankingclients)Neutral/Hold34%(21%bankingclients)Underperform/Sell9%(18%bankingclients)Restricted1%PleaseclickheretoviewtheMARquarterlyrecommendationsandinvestmentservicesreportforfundamentalresearchrecommendations.ForpurposesoftheNYSEandFINRAratingsdistributiondisclosurerequirements,ourstockratingsofOutperform,Neutral,andUnderperformmostcloselycorrespondtoBuy,Hold,andSell,respectively;however,themeaningsarenotthesame,asourstockratingsaredeterminedonarelativebasis.(Pleaserefertodefinitionsabove.)Aninvestor'sdecisiontobuyorsellasecurityshouldbebasedoninvestmentobjectives,currentholdings,andotherindividualfactors.ImportantGlobalDisclosuresCreditSuisse’sresearchreportsaremadeavailabletoclientsthroughourproprietaryresearchportalonCSPLUS.CreditSuisseresearchproductsmayalsobemadeavailablethroughthird-partyvendorsoralternateelectronicmeansasaconvenience.CertainresearchproductsareonlymadeavailablethroughCSPLUS.TheservicesprovidedbyCreditSuisse’sanalyststoclientsmaydependonaspecificclient’spreferencesregardingthefrequencyandmannerofreceivingcommunications,theclient’sriskprofileandinvestment,thesizeandscopeoftheoverallclientrelationshipwiththeFirm,aswellaslegalandregulatoryconstraints.ToaccessallofCreditSuisse’sresearchthatyouareentitledtoreceiveinthemosttimelymanner,pleasecontactyoursalesrepresentativeorgotohttps://plus.credit-suisse.com.CreditSuisse’spolicyistoupdateresearchreportsasitdeemsappropriate,basedondevelopmentswiththesubjectcompany,thesectororthemarketthatmayhaveamaterialimpactontheresearchviewsoropinionsstatedherein.CreditSuisse'spolicyisonlytopublishinvestmentresearchthatisimpartial,independent,clear,fairandnotmisleading.FormoredetailpleaserefertoCreditSuisse'sPoliciesforManagingConflictsofInterestinconnectionwithInvestmentResearch:https://www.credit-suisse.com/sites/disclaimers-ib/en/managing-conflicts.html.Anyinformationrelatingtothetaxstatusoffinancialinstrumentsdiscussedhereinisnotintendedtoprovidetaxadviceortobeusedbyanyonetoprovidetaxadvice.Investorsareurgedtoseektaxadvicebasedontheirparticularcircumstancesfromanindependenttaxprofessional.CreditSuissehasdecidednottoenterintobusinessrelationshipswithcompaniesthatCreditSuissehasdeterminedtobeinvolvedinthedevelopment,manufacture,oracquisitionofanti-personnelminesandclustermunitions.ForCreditSuisse'spositionontheissue,pleaseseehttps://www.credit-suisse.com/media/assets/corporate/docs/about-us/responsibility/banking/policy-summaries-en.pdf.Theanalyst(s)responsibleforpreparingthisresearchreportreceivedcompensationthatisbaseduponvariousfactorsincludingCreditSuisse'stotalrevenues,aportionofwhicharegeneratedbyCreditSuisse'sinvestmentbankingactivitiesPleaserefertothefirm'sdisclosurewebsiteathttps://rave.credit-suisse.com/disclosures/view/selectArchiveforthedefinitionsofabbreviationstypicallyusedinthetargetpricemethodandrisksections.SeetheCompaniesMentionedsectionforfullcompanynamesWithinthelast12months,CreditSuissehasreceivedcompensationfornon-investmentbankingservicesorproductsfromthefollowingissuer(s):0386.HK,600028.SSCreditSuisseexpectstoreceiveorintendstoseekinvestmentbankingrelatedcompensationfromthesubjectcompany(0386.HK,600028.SS)withinthenext3months.CreditSuissecurrentlyhas,orhadwithinthepast12months,thefollowingissuer(s)asclient(s),andtheservicesprovidedwerenon-investment-banking,securities-related:0386.HK,600028.SSCreditSuissecurrentlyhas,orhadwithinthepast12months,thefollowingissuer(s)asclient(s),andtheservicesprovidedwerenon-investment-banking,nonsecurities-related:0386.HK,600028.SSCreditSuisseactsasamarketmakerintheshares,depositaryreceipts,interestsorunitsissuedby,and/oranywarrantsoroptionsontheseshares,depositaryreceipts,interestsorunitsofthefollowingsubjectissuer(s):0189.HK,0386.HK,2338.HK.CreditSuisseoramemberoftheCreditSuisseGroupisamarketmakerorliquidityproviderinthesecuritiesofthefollowingsubjectissuer(s):688339.SS,3899.HK,1072.HK,600875.SS,0189.HK,601012.SS,0386.HK,600028.SS,000338.SZ,2338.HKFordateandtimeofproduction,disseminationandhistoryofrecommendationforthesubjectcompany(ies)featuredinthisreport,disseminatedwithinthepast12months,pleaserefertothelink:https://rave.credit-suisse.com/disclosures/view/report?i=696046&v=6wfxrsb5emc96gda5u6p1df7f.ImportantRegionalDisclosuresSingaporerecipientsshouldcontactCreditSuisseAG,SingaporeBranchforanymattersarisingfrom,orinconnectionwith,thisresearchreport.Analystswhoconductsitevisitsofcoveredissuersarenotpermittedtoacceptpaymentorreimbursementfortravelexpensesfromtheissuerforthesitevisit.ForCreditSuisseSecurities(Canada),Inc.'spoliciesandproceduresregardingthedisseminationofequityresearch,pleasevisithttps://www.credit-suisse.com/sites/disclaimers-ib/en/canada-research-policy.html.Investorsshouldnotethatincomefromsuchsecuritiesandotherfinancialinstruments,ifany,mayfluctuateandthatpriceorvalueofsuchsecuritiesandinstrumentsmayriseorfalland,insomecases,investorsmaylosetheirentireprincipalinvestment.TotheextentanyCreditSuisseequityresearchanalystemployedbyCreditSuisseInternational(a"UKAnalyst")hasinteractionswithaSpanishdomiciledclientofCreditSuisseAGoritsaffiliates,suchUKAnalystwillbeactingforandonbehalfofCreditSuisseBank(Europe),S.A.,withrespectonlytotheprovisionofequityresearchservicestoSpanishdomiciledclientsofCreditSuisseAGoritsaffiliates.24March2022ChinaNewEnergy—Hydrogen20PursuanttoCVMResolutionNo.20/2021,ofFebruary25,2021,theauthor(s)ofthereportherebycertify(ies)thattheviewsexpressedinthisreportsolelyandexclusivelyreflectthepersonalopinionsoftheauthor(s)andhavebeenpreparedindependently,includingwithrespecttoCreditSuisse.Partoftheauthor(s)´scompensationisbasedonvariousfactors,includingthetotalrevenuesofCreditSuisse,butnopartofthecompensationhasbeen,is,orwillberelatedtothespecificrecommendationsorviewsexpressedinthisreport.Inaddition,CreditSuissedeclaresthat:CreditSuissehasprovided,and/ormayinthefutureprovideinvestmentbanking,brokerage,assetmanagement,commercialbankingandotherfinancialservicestothesubjectcompany/companiesoritsaffiliates,forwhichtheyhavereceivedormayreceivecustomaryfeesandcommissions,andwhichconstitutedormayconstituterelevantfinancialorcommercialinterestsinrelationtothesubjectcompany/companiesorthesubjectsecurities.Asatthedateofthisreport,CreditSuissehasfinancialintereststhataggregatetoanamountequaltoormorethan1%ofthemarketcapitalizationof(1072.HK).Thisresearchreportisauthoredby:CreditSuisse(HongKong)LimitedHoraceTse;BinWang;JibangChai;IrisZheng,CFA;DanielCui;GaryZhou,CFA;SabrinaShao,CFA;CynthiaWuTotheextentthisisareportauthoredinwholeorinpartbyanon-U.S.analystandismadeavailableintheU.S.,thefollowingareimportantdisclosuresregardinganynon-U.S.analystcontributors:Thenon-U.S.researchanalystslistedbelow(ifany)arenotregistered/qualifiedasresearchanalystswithFINRA.Thenon-U.S.researchanalystslistedbelowmaynotbeassociatedpersonsofCSSUandthereforemaynotbesubjecttotheFINRA2241restrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.CreditSuisse(HongKong)LimitedHoraceTse;BinWang;JibangChai;IrisZheng,CFA;DanielCui;GaryZhou,CFA;SabrinaShao,CFA;CynthiaWuImportantdisclosuresregardingcompaniesthatarethesubjectofthisreportareavailablebycalling+1(877)291-2683.Thesameimportantdisclosures,withtheexceptionofvaluationmethodologyandriskdiscussions,arealsoavailableonCreditSuisse’sdisclosurewebsiteathttps://rave.credit-suisse.com/disclosures.Forvaluationmethodologyandrisksassociatedwithanyrecommendation,pricetarget,orratingreferencedinthisreport,pleaserefertothedisclosuressectionofthemostrecentreportregardingthesubjectcompany.24March2022ChinaNewEnergy—Hydrogen21ThisreportisproducedbysubsidiariesandaffiliatesofCreditSuisseoperatingunderitsSecuritiesResearchfunctionwithintheInvestmentBankingDivision.Formoreinformationonourstructure,pleaseusethefollowinglink:https://www.credit-suisse.com/who-we-areThisreportmaycontainmaterialthatisnotdirectedto,orintendedfordistributiontooruseby,anypersonorentitywhoisacitizenorresidentoforlocatedinanylocality,state,countryorotherjurisdictionwheresuchdistribution,publication,availabilityorusewouldbecontrarytolaworregulationorwhichwouldsubjectCreditSuisseoritsaffiliates("CS")toanyregistrationorlicensingrequirementwithinsuchjurisdiction.Allmaterialpresentedinthisreport,unlessspecificallyindicatedotherwise,isundercopyrighttoCS.Noneofthematerial,noritscontent,noranycopyofit,maybealteredinanyway,transmittedto,copiedordistributedtoanyotherparty,withoutthepriorexpresswrittenpermissionofCS.Alltrademarks,servicemarksandlogosusedinthisreportaretrademarksorservicemarksorregisteredtrademarksorservicemarksofCSoritsaffiliates.Theinformation,toolsandmaterialpresentedinthisreportareprovidedtoyouforinformationpurposesonlyandarenottobeusedorconsideredasanofferorthesolicitationofanoffertosellortobuyorsubscribeforsecuritiesorotherfinancialinstruments.CSmaynothavetakenanystepstoensurethatthesecuritiesreferredtointhisreportaresuitableforanyparticularinvestor.CSwillnottreatrecipientsofthisreportasitscustomersbyvirtueoftheirreceivingthisreport.Theinvestmentsandservicescontainedorreferredtointhisreportmaynotbesuitableforyouanditisrecommendedthatyouconsultanindependentinvestmentadvisorifyouareindoubtaboutsuchinvestmentsorinvestmentservices.Nothinginthisreportconstitutesinvestment,legal,accountingortaxadvice,orarepresentationthatanyinvestmentorstrategyissuitableorappropriatetoyourindividualcircumstances,orotherwiseconstitutesapersonalrecommendationtoyou.Pleasenoteinparticularthatthebasesandlevelsoftaxationmaychange.InformationandopinionspresentedinthisreporthavebeenobtainedorderivedfromsourcesbelievedbyCStobereliable,butCSmakesnorepresentationastotheiraccuracyorcompleteness.CSacceptsnoliabilityforlossarisingfromtheuseofthematerialpresentedinthisreport,exceptthatthisexclusionofliabilitydoesnotapplytotheextentthatsuchliabilityarisesunderspecificstatutesorregulationsapplicabletoCS.Thisreportisnottoberelieduponinsubstitutionfortheexerciseofindependentjudgment.CSmayhaveissued,andmayinthefutureissue,othercommunicationsthatareinconsistentwith,andreachdifferentconclusionsfrom,theinformationpresentedinthisreport.Thosecommunicationsreflectthedifferentassumptions,viewsandanalyticalmethodsoftheanalystswhopreparedthemandCSisundernoobligationtoensurethatsuchothercommunicationsarebroughttotheattentionofanyrecipientofthisreport.SomeinvestmentsreferredtointhisreportwillbeofferedsolelybyasingleentityandinthecaseofsomeinvestmentssolelybyCS,oranassociateofCSorCSmaybetheonlymarketmakerinsuchinvestments.Pastperformanceshouldnotbetakenasanindicationorguaranteeoffutureperformance,andnorepresentationorwarranty,expressorimplied,ismaderegardingfutureperformance.Information,opinionsandestimatescontainedinthisreportreflectajudgmentatitsoriginaldateofpublicationbyCSandaresubjecttochangewithoutnotice.Theprice,valueofandincomefromanyofthesecuritiesorfinancialinstrumentsmentionedinthisreportcanfallaswellasrise.Thevalueofsecuritiesandfinancialinstrumentsissubjecttoexchangeratefluctuationthatmayhaveapositiveoradverseeffectonthepriceorincomeofsuchsecuritiesorfinancialinstruments.InvestorsinsecuritiessuchasADR's,thevaluesofwhichareinfluencedbycurrencyvolatility,effectivelyassumethisrisk.Structuredsecuritiesarecomplexinstruments,typicallyinvolveahighdegreeofriskandareintendedforsaleonlytosophisticatedinvestorswhoarecapableofunderstandingandassumingtherisksinvolved.Themarketvalueofanystructuredsecuritymaybeaffectedbychangesineconomic,financialandpoliticalfactors(including,butnotlimitedto,spotandforwardinterestandexchangerates),timetomaturity,marketconditionsandvolatility,andthecreditqualityofanyissuerorreferenceissuer.Anyinvestorinterestedinpurchasingastructuredproductshouldconducttheirowninvestigationandanalysisoftheproductandconsultwiththeirownprofessionaladvisersastotherisksinvolvedinmakingsuchapurchase.Someinvestmentsdiscussedinthisreportmayhaveahighlevelofvolatility.Highvolatilityinvestmentsmayexperiencesuddenandlargefallsintheirvaluecausinglosseswhenthatinvestmentisrealised.Thoselossesmayequalyouroriginalinvestment.Indeed,inthecaseofsomeinvestmentsthepotentiallossesmayexceedtheamountofinitialinvestmentand,insuchcircumstances,youmayberequiredtopaymoremoneytosupportthoselosses.Incomeyieldsfrominvestmentsmayfluctuateand,inconsequence,initialcapitalpaidtomaketheinvestmentmaybeusedaspartofthatincomeyield.Someinvestmentsmaynotbereadilyrealisableanditmaybedifficulttosellorrealisethoseinvestments,similarlyitmayprovedifficultforyoutoobtainreliableinformationaboutthevalue,orrisks,towhichsuchaninvestmentisexposed.Thisreportmayprovidetheaddressesof,orcontainhyperlinksto,websites.ExcepttotheextenttowhichthereportreferstowebsitematerialofCS,CShasnotreviewedanysuchsiteandtakesnoresponsibilityforthecontentcontainedtherein.Suchaddressorhyperlink(includingaddressesorhyperlinkstoCS'sownwebsitematerial)isprovidedsolelyforyourconvenienceandinformationandthecontentofanysuchwebsitedoesnotinanywayformpartofthisdocument.AccessingsuchwebsiteorfollowingsuchlinkthroughthisreportorCS'swebsiteshallbeatyourownrisk.Thisresearchreportdoesnot,andisnotintendedtobe,anadvertisementwithinthemeaningofarticle68oftheSwissFinancialServicesActand/orarticle95oftheSwissFinancialServicesOrdinance.Thisresearchreportisnotaprospectus,basicinformationsheet(BIB)orakeyinformationdocument(KID).Anyrecipientsofthisdocumentshould,however,notethatanycommunicationforwardingorusingthisresearchreportasabasisfordiscussion,wouldqualifyassuchadvertisementifitisintendedtodrawtherecipient'sattentiontospecificfinancialinstrumentscoveredbythisresearchreport.ThisreportisissuedanddistributedinUnitedKingdomandEuropeanUnion(exceptGermanyandSpain):byCreditSuisseInternational,OneCabotSquare,LondonE144QJ,England,whichisauthorisedbythePrudentialRegulationAuthorityandregulatedbytheFinancialConductAuthorityandthePrudentialRegulationAuthority;Spain:CreditSuisseBank(Europe),S.A.regulatedbytheComisionNacionaldelMercadodeValores;Germany:CreditSuisse(Deutschland)AktiengesellschaftregulatedbytheBundesanstaltfuerFinanzdienstleistungsaufsicht("BaFin").UnitedStates:CreditSuisseSecurities(USA)LLC;Canada:CreditSuisseSecurities(Canada),Inc.;Switzerland:CreditSuisseAG;Brazil:CreditSuisse(Brasil)S.A.CorretoradeTítuloseValoresMobiliáriosoritsaffiliates;Mexico:BancoCreditSuisse(México),S.A.,InstitucióndeBancaMúltiple,GrupoFinancieroCreditSuisse(México)andCasadeBolsaCreditSuisse(México),S.A.deC.V.,GrupoFinancieroCreditSuisse(México)("CreditSuisseMexico").ThisdocumenthasbeenpreparedforinformationpurposesonlyandisexclusivelydistributedinMexicotoInstitutionalInvestors.CreditSuisseMexicoisnotresponsibleforanyonwarddistributionofthisreporttonon-institutionalinvestorsbyanythirdparty.TheauthorsofthisreporthavenotreceivedpaymentorcompensationfromanyentityorcompanyotherthanfromtherelevantCreditSuisseGroupcompanyemployingthem;Japan:byCreditSuisseSecurities(Japan)Limited,FinancialInstrumentsFirm,Director-GeneralofKantoLocalFinanceBureau(Kinsho)No.66,amemberofJapanSecuritiesDealersAssociation,TheFinancialFuturesAssociationofJapan,JapanInvestmentAdvisersAssociation,TypeIIFinancialInstrumentsFirmsAssociation.ThisreporthasbeenpreparedandissuedfordistributioninJapantoCreditSuisse’sclients,includinginstitutionalinvestors;HongKongSAR:CreditSuisse(HongKong)Limited;Australia:CreditSuisseEquities(Australia)Limited;Thailand:CreditSuisseSecurities(Thailand)Limited,regulatedbytheOfficeoftheSecuritiesandExchangeCommission,Thailand,havingregisteredaddressat990AbdulrahimPlace,27thFloor,Unit2701,RamaIVRoad,Silom,Bangrak,Bangkok10500,Thailand,Tel.+6626146000;Malaysia:CreditSuisseSecurities(Malaysia)SdnBhd;Singapore:CreditSuisseAG,SingaporeBranch;India:CreditSuisseSecurities(India)PrivateLimited(CINno.U67120MH1996PTC104392)regulatedbytheSecuritiesandExchangeBoardofIndiaasResearchAnalyst(registrationno.INH000001030)andasStockBroker(registrationno.INZ000248233),havingregisteredaddressat9thFloor,CeejayHouse,Dr.A.B.Road,Worli,Mumbai-18,India,T-+91-2267773777;SouthKorea:CreditSuisseSecurities(Europe)Limited,SeoulBranch;Taiwan(ChineseTaipei):CreditSuisseAGTaipeiSecuritiesBranch;Indonesia:PTCreditSuisseSekuritasIndonesia;Philippines:CreditSuisseSecurities(Philippines)Inc.,andelsewhereintheworldbytherelevantauthorisedaffiliateoftheabove.AdditionalRegionalDisclaimersAustralia:CreditSuisseSecurities(Europe)Limited("CSSEL")andCreditSuisseInternational("CSI")areauthorisedbythePrudentialRegulationAuthorityandregulatedbytheFinancialConductAuthority("FCA")andthePrudentialRegulationAuthorityunderUKlaws,whichdifferfromAustralianLaws.CSSELandCSIdonotholdanAustralianFinancialServicesLicence("AFSL")andareexemptfromtherequirementtoholdanAFSLundertheCorporationsAct(Cth)2001("CorporationsAct")inrespectofthefinancialservicesprovidedtoAustralianwholesaleclients(withinthemeaningofsection761GoftheCorporationsAct)(hereinafterreferredtoas“FinancialServices”).ThismaterialisnotfordistributiontoretailclientsandisdirectedexclusivelyatCreditSuisse'sprofessionalclientsandeligiblecounterpartiesasdefinedbytheFCA,andwholesaleclientsasdefinedundersection761GoftheCorporationsAct.CreditSuisse(HongKong)Limited("CSHK")islicensedandregulatedbytheSecuritiesandFuturesCommissionofHongKongunderthelawsofHongKongSAR,whichdifferfromAustralianlaws.CSHKLdoesnotholdanAFSLandisexemptfromtherequirementtoholdanAFSLundertheCorporationsActinrespectofprovidingFinancialServices.InvestmentbankingservicesintheUnitedStatesareprovidedbyCreditSuisseSecurities(USA)LLC,anaffiliateofCreditSuisseGroup.CSSUisregulatedbytheUnitedStatesSecuritiesandExchangeCommissionunderUnitedStateslaws,whichdifferfromAustralianlaws.CSSUdoesnotholdanAFSLandisexemptfromtherequirementtoholdanAFSLundertheCorporationsActinrespectofprovidingFinancialServices.CreditSuisseAssetManagementLLC(CSAM)isauthorisedbytheSecuritiesandExchangeCommissionunderUSlaws,whichdifferfromAustralianlaws.CSAMdoesnotholdanAFSLandisexemptfromtherequirementtoholdanAFSLundertheCorporationsActinrespectofprovidingFinancialServices.ThismaterialisprovidedsolelytoInstitutionalAccounts(asdefinedintheFINRArules)whoareEligibleContractParticipants(asdefinedintheUSCommodityExchangeAct).CreditSuisseEquities(Australia)Limited(ABN35068232708)("CSEAL")isanAFSLholderinAustralia(AFSL237237).Malaysia:ResearchprovidedtoresidentsofMalaysiaisauthorisedbytheHeadofResearchforCreditSuisseSecurities(Malaysia)SdnBhd,towhomtheyshoulddirectanyquerieson+60327232020.Singapore:ThisreporthasbeenpreparedandissuedfordistributioninSingaporetoinstitutionalinvestors,accreditedinvestorsandexpertinvestors(eachasdefinedundertheFinancialAdvisersRegulations)only,andisalsodistributedbyCreditSuisseAG,SingaporeBranchtooverseasinvestors(asdefinedundertheFinancialAdvisersRegulations).CreditSuisseAG,SingaporeBranchmaydistributereportsproducedbyitsforeignentitiesoraffiliatespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulations.SingaporerecipientsshouldcontactCreditSuisseAG,SingaporeBranchat+65-6212-2000formattersarisingfrom,orinconnectionwith,thisreport.Byvirtueofyourstatusasaninstitutionalinvestor,accreditedinvestor,expertinvestororoverseasinvestor,CreditSuisseAG,SingaporeBranchisexemptedfromcomplyingwithcertaincompliancerequirementsundertheFinancialAdvisersAct,Chapter110ofSingapore(the“FAA”),theFinancialAdvisersRegulationsandtherelevantNoticesandGuidelinesissuedthereunder,inrespectofanyfinancialadvisoryservicewhichCreditSuisseAG,SingaporeBranchmayprovidetoyou.EU:ThisreporthasbeenproducedbysubsidiariesandaffiliatesofCreditSuisseoperatingunderitsSecuritiesResearchfunctionwithintheInvestmentBankingDivision.InjurisdictionswhereCSisnotalreadyregisteredorlicensedtotradeinsecurities,transactionswillonlybeeffectedinaccordancewithapplicablesecuritieslegislation,whichwillvaryfromjurisdictiontojurisdictionandmayrequirethatthetradebemadeinaccordancewithapplicableexemptionsfromregistrationorlicensingrequirements.ThismaterialisissuedanddistributedintheU.S.byCSSU,amemberofNYSE,FINRA,SIPCandtheNFA,andCSSUacceptsresponsibilityforitscontents.ClientsshouldcontactanalystsandexecutetransactionsthroughaCreditSuissesubsidiaryoraffiliateintheirhomejurisdictionunlessgoverninglawpermitsotherwise.CSmayprovidevariousservicestoUSmunicipalentitiesorobligatedpersons("municipalities"),includingsuggestingindividualtransactionsortradesandenteringintosuchtransactions.AnyservicesCSprovidestomunicipalitiesarenotviewedas"advice"withinthemeaningofSection975oftheDodd-FrankWallStreetReformandConsumerProtectionAct.CSisprovidinganysuchservicesandrelatedinformationsolelyonanarm'slengthbasisandnotasanadvisororfiduciarytothemunicipality.Inconnectionwiththeprovisionoftheanysuchservices,thereisnoagreement,directorindirect,betweenanymunicipality(includingtheofficials,management,employeesoragentsthereof)andCSforCStoprovideadvicetothemunicipality.Municipalitiesshouldconsultwiththeirfinancial,accountingandlegaladvisorsregardinganysuchservicesprovidedbyCS.Inaddition,CSisnotactingfordirectorindirectcompensationtosolicitthemunicipalityonbehalfofanunaffiliatedbroker,dealer,municipalsecuritiesdealer,municipaladvisor,orinvestmentadviserforthepurposeofobtainingorretaininganengagementbythemunicipalityfororinconnectionwithMunicipalFinancialProducts,theissuanceofmunicipalsecurities,orofaninvestmentadvisertoprovideinvestmentadvisoryservicestooronbehalfofthemunicipality.IfthisreportisbeingdistributedbyafinancialinstitutionotherthanCreditSuisseAG,oritsaffiliates,thatfinancialinstitutionissolelyresponsiblefordistribution.Clientsofthatinstitutionshouldcontactthatinstitutiontoeffectatransactioninthesecuritiesmentionedinthisreportorrequirefurtherinformation.ThisreportdoesnotconstituteinvestmentadvicebyCreditSuissetotheclientsofthedistributingfinancialinstitution,andneitherCreditSuisseAG,itsaffiliates,andtheirrespectiveofficers,directorsandemployeesacceptanyliabilitywhatsoeverforanydirectorconsequentiallossarisingfromtheiruseofthisreportoritscontent.Noinformationorcommunicationprovidedhereinorotherwiseisintendedtobe,orshouldbeconstruedas,arecommendationwithinthemeaningoftheUSDepartmentofLabor’sfinalregulationdefining"investmentadvice"forpurposesoftheEmployeeRetirementIncomeSecurityActof1974,asamendedandSection4975oftheInternalRevenueCodeof1986,asamended,andtheinformationprovidedhereinisintendedtobegeneralinformation,andshouldnotbeconstruedas,providinginvestmentadvice(impartialorotherwise).Copyright©2022CREDITSUISSEAGand/oritsaffiliates.Allrightsreserved.Whenyoupurchasenon-listedJapanesefixedincomesecurities(Japanesegovernmentbonds,Japanesemunicipalbonds,Japanesegovernmentguaranteedbonds,Japanesecorporatebonds)fromCSasaseller,youwillberequestedtopaythepurchasepriceonly.
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