abGlobalResearch8March2022PoweredbyUBSEvidenceLabYESChina'shydrogenroadmapremainsintact;2022mayseeaccelerationWeexpectfuel-cellelectricvehicle(FCEV)salestotripleYoYto5,500in2022E,despitelower-than-expectedsalesin2021draggingsharepricesdownalongthevaluechain,as:1)Chinaannouncedalistofpilotcityclusterslastyear;2)FCEVinstallationmorethandoubledYoYinJanuary2022;and3)theBrentpricehasexceededUS$120/bbl.WedeemFCEVakeydemanddriverofhydrogen(H2)asweexpectheavytransportationtobethefirstsectortoreachcostparity.WehaveBuysalongthevaluechain:upstreamby-productH2supplierZhejiangSatelliteChemical(KeyCall)andmidstreamcylindermakerCIMCEnricfornear-termearningsvisibility;downstreamFCmakerSinoHytecwith100%hydrogenexposurein2025E(lessthan10%forpeersinUBS-Scoverage);andFCprotonexchangemembrane(PEM)makerDongyue(initiatecoveragewithaBuy).Ourscenariosfor1mFCEVownershipinChinain2030-35UBS-S'sproprietaryChinahydrogenmodelprovidesdetailedforecastsforhydrogensubsectorsassumingFCEVreachescostparityin2030EandChinaachieves1mownershipover2030-35E,whichwouldimply100%/50%five-yearCAGRsforFCEVsales,5GW/46GWFCinstallation,and1,600/8,000refuellingstationsbyend-2025E/30E.OurforecastsareinlinewithChina's“EVRoadmap2.0”undertheguidanceoftheMinistryofIndustryandInformationTechnology(MIIT)andsupportedbyprovincialtargetsonFCEVownership/hydrogenrefuellingstation(HRS)count.Wetoppickby-productH2andseelong-term+upsideforFCmakersRegardingnear-termrisk-reward,welike:companiesthatproduceH2asaby-productwithoptimisedcost/carbonportfolios,readilyavailablecapacityandlesscompetitionduetodifficultiesontransportinghydrogen;cylindermakerswithleadersinT4cylinderstogainmarketshare.ForFCmakers,althoughweexpectintensecompetition,SinoHytecrecordedsteadymarketsharegainsfrom20%to30%over2018-21.BasedonUBSEvidenceLabdata(>Accessdataset)andSinoHytec’sH-shareprospectus,thecompany'spatentapplicationsmorethanquadrupledfrom113in2020to460in2021,whichwebelievecouldstrengthenitsleadership.AssumecoveragewithBuyratingsonthesectorAlongthevaluechain,ourtoppickisSatellite(Keycall)forhighgrowthvisibilityandattractivevaluationat9x2022EPE.WeremainupbeatonSinoHytecasapureFCmaker.WeupgradeEnricfromNeutraltoBuy,andinitiatecoverageofDongyuewithaBuy.Wealsoexpectre-ratingpotentialforoilmajorsiftheydiversifyintohydrogenproductionandmarketing(werateSinopec-HaBuy).Figure1:Valuationsofhydrogen-relatedChinacompaniesRatingSharepriceUpside7-Mar-22CurrentOldLocalcry%2022E2023E2022E2023E2022E2023E2022E2023ECIMCEnricNeutral»Buy12.407.208.5745%13.010.71.61.513.114.66.25.4SinoHytecBuy230.00380.00162.9941%N.M.66.65.04.60.27.2185.037.1DongyueGroupBuy14.00Initiate10.0639%5.65.71.21.123.720.52.52.3ZhejiangSatelliteBuy57.0057.0041.7137%9.17.42.92.236.433.87.35.9Sinopec-HBuy4.604.603.8021%5.55.30.50.48.58.62.92.9Pricetarget(lcy)PE(x)P/B(x)ROE(%)EV/EBITDA(x)Source:Wind,UBS-Sestimates.Note:Abovedataasof7March2022.EquitiesChinaChemicalsThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited.ANALYSTCERTIFICATIONANDREQUIREDDISCLOSURES,includinginformationontheQuantitativeResearchReviewpublishedbyUBS,beginonpage27.UBSdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ChinahydrogensectorFastlaneahead-whichsubsectorsdoweprefer?AmilyGuoAnalystS1460518050002amily.guo@ubs.com+86-10-58328845KenLiuAnalystken.liu@ubs.com+852-29717516RichardLiAssociateS1460121090003richard-ze.li@ubs.com+86-21-38668802WeiShenAnalystS1460518060001wei.shen@ubs.com+86-21-38668897JiaweiWangAnalystS1460520100004jiawei-za.wang@ubs.com+86-213-8668884SabrinaLiuAssociateAnalystsabrina.liu@ubs.com+852-29715526Chinahydrogensector8March2022ab2ChinahydrogensectorUBSResearchSectorThesisMapUBSResearchTHESISMAPMOSTFAVOREDZhejiangSatellite(KeyCall),SinoHytec,CIMCEnric,Dongyue,Sinopec-HLEASTFAVOREDN.A.Q:CanChinareachits1mFCEVownershiptargetfor2030-35?Yes.Our1mFCEVownershipscenarioin2030-35Eisinlinewiththe“EVRoadmap2.0”undertheMIIT'sguidance,andunderpinnedbyprovincialFCEVandHRStargetsaswellasourcrosscheckalongthehydrogenvaluechain.Ourmodelimplies,byend-2025E/30E:hydrogencouldbe3%/5%ofprimaryenergysources;100%/50%five-yearCAGRsforFCEVsales;1,600/8,000HRSs;and90m/510mlitresofcylinderdemand.moreQ:Howwillthecompetitivelandscapeevolvealongthehydrogenvaluechain?WelikecompaniesthatproduceH2asaby-productwithhighmargins,bettercost/carbonemissionportfoliosthangreen/fossil-basedhydrogen,andlesscompetitionduetodifficultiesontransportinghydrogen.Type1-3(T1-3)hydrogencylindersarehighlylocalised,whileweviewcylinderproducerswithaleadinT4ashavingamajoradvantage.ForFCsystemmakers,themarketisquitefragmentedandcompetitionfromdomestic/overseaspeerscouldbeintense,butwebelieveahighlocalisationratioandfurtherintegrationofindustrialchainscouldhelpmitigatetherisk.moreQ:WillFCEVbecomemorecompetitiveinlargevehiclesandreachcostparitybyend-2030?Yes.WethinkFCEVhasadvantagesindecarbonisinglargetransportequipment:highenergydensityperkilogramme,lowresourcedependencyandshortrefuellingtime.Weexpecta85-90%FCsystemcost-savingbyend-2030E,andparitywithinternalcombustionengine(ICE)byend-2027E.PolicysupportisimportanttoFCEVscale-upinChina,inourview."Q-Series:Greenhydrogen:productiontopump-howtonavigateanemergingmulti-US$trnvaluechain?"8/5/2021;"DecarbonisingcommercialvehicleswithH2"12/6/2021Althoughfewcompanieshavesignificanthydrogenexposure,weidentifysomewithpotentialtogainmarketshareinthisfast-growingsector.OurtoppickisSatellite,withthehighestvisibilityinH2by-productsinourview.WelikeSinoHytecwith100%hydrogenexposureandleadingmarketshare.WebelieveFCsystemmakerscouldmitigateriskswithincreasedlocalisationandmoreintegratedindustrialchains.UBS'sproprietaryhydrogenmodelsuggestsa75%dropinChina'sgreenhydrogenproductioncostbytheendofthisdecade.Coal/gasgenerate22kg/10kgofcarbondioxideperkilogrammeofhydrogenproduced,versus1kgfromhydrogenproducedasaby-productduringethanedehydrogenation(EDH)/propanedehydrogenation(PDH).SinoHytecwasamongthethreelargestproducersinChinain2018-21,withmarketshareupfrom20%to30%.Dongyue,SinoHytecandCIMCEnrichaveretreated20-50%sinceend-2021.SatelliteandDongyuearetradingbelow10x2022EPE,andSinoHytechasbeentradingat1SDbelowitshistoricalaverage.Wethinkthehydrogensector'slong-termgrowthpotentialisnotfullypricedin.Figure2:Comparisonamongsubsectors–hydrogenexposureSinoHytecSatelliteChemicalSinopecCIMCEnricDongyueGroupWeihaiGuangwei688399.SH002648.SZ600028.SH8289.HK0189.HK300699.SZSectorrelatedFuel-cellsystemBy-producthydrogenHydrogenproductionandrefuellingstation(HRS)Storagetanks/cylindersPFSAmembraneCarbonfibre2021E549160-1405N.A.2025E3,9644,0006,0001,6801824502021E100%0.6%0.0%0.9%0.1%N.A.2025E100%6.4%0.2%6.7%1.0%7.6%UBS-Sassumptions1.3GWsales&Rmb3,000/kWASPin2025E10/200ktsalesatRmb16/20perkgofH2in2021E/25E1,000HRSwith550kg/daysalesin2025ECompanyguidedmarketshareincreaseto30-40%in2025F10/400ksqmsalesatRmb1,500/1,300persqmin2021E/25E3ktsales(15%marketshare)atRmb150/kgin2025EMarketshare-domesticUBS-ScommentsSinoHytec'smarketshareincreasedfrom20%to30%in2018-21LargeSOEsarethemajorH2producersfornow(mainlyself-consumed)Sinopecguidedtobuild1,000HRS(>60%marketshare)by2025FMainlyT3cylinderssalesin2021,switchingtoT4in2021-25ESalesatinfancystageforDongyueanddomesticmarketOnlyincludesT700+carbonfibreformilitaryuseRevenuefromhydrogen(Rmbm)¹RevenuecontributionSinopec,14%CEIC,16%CNPC,10%SatelliteChemical…Others,59%Sinopec,74CNPC,4Meijin,8Others,135Sinofibers,16%Guangwei,40%Others,39%20%19%32%29%80%81%68%71%2018201920202021SinohytecOthersDongyue,0.02Globalpeers,0.98ChinaHRScount-2021ChinaH2production2021SinoHytecChinamarketshareEnricH2cylindermarket15%30%85%70%20212025FCIMCEnricOthersDongyuePEMglobalDomesticcarbonfibremarketshare-2021Source:Companydata,UBS-SestimatesPivotalQuestionsUBSVIEWEVIDENCEWHAT´SPRICEDIN?Chinahydrogensector8March2022ab3ChinahydrogensectorUBSResearchCanChinareachits1mFCEVownershiptargetfor2030-35?PIVOTALQUESTION1Chinahydrogensector8March2022ab4Q:CanChinareachits1mFCEVownershiptargetfor2030-35?UBSVIEWYes.Our1mFCEVownershipscenarioin2030-35Eisinlinewiththe“EVRoadmap2.0”undertheMIIT'sguidanceandunderpinnedbyprovincialFCEVandHRStargetsaswellasourcrosscheckalongthehydrogenvaluechain.Ourmodelimplies,byend-2025E/30E:hydrogencouldbe3%/5%ofprimaryenergysources;100%/50%five-yearCAGRsforFCEVsales;1,600/8,000HRSs;and90m/510mlitresofcylinderdemand.EVIDENCEHydrogenismentionedinthedraftoutlineofChina’s14thFive-YearPlan(2021-25),andaround30provinceshaveannouncedtheirtargetsforhydrogendevelopmentduringthe14thFYPperiod.UBS’sproprietarycostofhydrogensupplymodelsuggeststhecostofproducinggreenhydrogeninChinacoulddropby75%bytheendofthisdecade,andadroptobelowUS$2/kginChinawouldmakegreenhydrogencompetitivewithdieselfuelforcitybuses,heavy-dutytrucks(HDTs)andoff-roadvehicles.UBS’sproprietarycarbonmodelforChina’s2060carbon-neutraltargetsuggestshydrogencouldreach3%/5%ofprimaryenergysourcesbyend-2025E/30E.(see“Q-Series:10btonstozero:howcanChinaachieveitscarbonneutralgoal?”,KenLiu,1/13/2021)WHAT’SPRICEDIN?Valuationofhydrogen-relatedfirmshasgenerallyretreatedrecently,andwethinkthemajormarketconcernisthedeterminationforhydrogendevelopmentinChinainthenextdecade,whichwedeemfeasibleandnecessaryfromcost,carbonreductionandindustrialvaluechainperspectives.Chinahydrogensector8March2022ab5202020212025E2030E2020-25E2025-30EDownstreamFCEVcommercialsales-'000units1.21.640304102%50%FCEVcommercialownership-'000unit7.48.992883FCEVcommercialpenetration%0.0%0.0%0.9%6.7%Refuellingstationcount-unit1182211,5778,15868%39%Averagecapacity(kg/day)6239121,468Utilisationratio%31%51%82%Tubetrailersales-unit901558992,56758%23%Fuelcellinstallation-GW0.080.175.046.3129%56%MidstreamCylinderdemandbyweight(t)901582,69819,46198%48%Vehicle40672,05317,065120%53%HRSandtubetrailer50906442,39667%30%Cylinderdemandbyvolume(mL)4.27.59051085%41%T1&T276%78%42%20%T324%22%23%0%T40%0%36%80%Carbonfibredemand-kt0.40.718108112%43%UpstreamHydrogendemand(mt)20.823.032.859.510%13%Hydrogenas%ofprimaryenergy2.0%2.2%2.9%5.0%Amongwhich:Greenhydrogen0.000.120.645.95187%56%As%oftotal0.0%0.5%2.0%10.0%Transportation0.010.020.273.57As%oftotal0.0%0.1%0.8%6.0%Electrolyserinstallation-GW0.021.241.106.97116%45%CAGROurscenarioof1mFCEVownershipin2030-35EOurforecastsarebasedonthe1mFCEVownershiptargetin2025-35broughtupbytheChinaSocietyofAutomotiveEngineersinits“EVRoadmap2.0”undertheguidanceoftheMIIT.•Weforecastthetargettobecompletedin2030-35E.Our92,000FCEVownershipestimatefor2025islargelydrivenbyasumof10majorprovincialtargets(76,000)…•…whichcouldalsobesupportedbytheHRScount,asweestimateabout10,000HRSsareneededtosupport1mFCEVownership.Currently,majorprovincestargetabout800HRSsintotalin2025.Thus,webelievea10,000targetfor2030-35islikely.•Weexpecthydrogentobe3%/5%ofprimaryenergysourcesin2025E/30E.TheseareinlinewithUBS’sChinacarbonmodel.(see“Q-Series:10btonstozero:howcanChinaachieveitscarbonneutralgoal?”,KenLiu,1/13/2021).Source:GGII,companydata.,UBS-SestimateChinahydrogensector8March2022ab6Downstream:coordinatedgrowthofFCEVandHRSEAFSteelStationsOff-roadsTrucksBusesNH3MethanolTransportuseIndustrialuseResidential&storageAviationResidentialheatingEnergystorageBatteryfuel-cellsystemDomestic:•SinoHytec(688339.SS)•Weichai(000338.SZ;2338.HK)•ShanghaiHydrogenPropulsionTech•DongfangElectric(600875.SS)•ShanghaiReFireTechnology•ShanghaiFuelCellPowerTrain•VisionBatteryGlobal:•Ballard(BLDP.O)•BloomEnergy(BE.N)•MitsubishiHeavyIndustries(7011.T)•Toyota(7203.T)•HyzonMotors(HYZN.O)•HydrogenicsFuelCell•Nedstack•CeresPower(CWR.L)•DoosanFuelCell(336260.KS)•Powercell(PCELL.ST)HydrogenrefuellingstationsDomestic:•Sinopec(600028.SS;0386.HK)•PetroChina(601857.SS;0857.HK)•ChinaGas(0384.HK)•FuruiSpecialEquipment(300228.SZ)•HuachangChemical(002274.SZ)•PericHydrogen•Sunwise•Weexpect100%/50%five-yearCAGRsforFCEVsalesbyend-2025E/30E,basedonourscenarioof1mFCEVownershipin2030-35E•WeestimatetheHRScountneedstoreach10,000in2030-35E(versus220in2021E)tosupport1mFCEVownership,assuming460/1,200kgaveragerefuellingvolumeperdaybyend-2025E/30E.•Fuel-cellinstallationcouldreach5/46GWin2025E/30E;weviewlocalisationandmoreintegratedsupplychainasthemostimportantadvantagesoflocalproducers.Source:UBSChinahydrogensector8March2022ab7Midstream:steadygrowthofhydrogencylinders/carbonfibreLH2LH2CompressedH2PipelineDirecttransportHydrogencarriersConversiontoammonia/methanolAmmonia/methanolStorageLH2-253°C70kg/m3Adsorption10-70bar-196°C20-50kg/m3Chemicalhydridescatalyst50-120kg/m3MetalhydridesAdditives40-70kg/m3DehydrogenationStoragetankDomestic:•CIMCEnric(3899.HK)•SinomaScience&Tech(002080.SZ)•ShanghaiSunwise•BeijingJingchengMachinery(600860.SS)Global:•ILJINHysolus(271940.KS)•Hexagon(HEXAb.ST)•QuantumPipelineconstructionDomestic:•Sinopec(600028.SS;0386.HK)•PetroChina(601857.SS;0857.HK)•Weexpect85%/41%five-yearCAGRsforcylindersalesbyend-2025E/30E,mainlydrivenbysurgingcommercialFCEVsalesandconstructionofhydrogenrefuellingstations(HRS).•Chinacarbonfibresupplymightremaintightin2022/23Ewhichisakeyrawmaterialforhydrogencylinders(T3&T4).Weassumeunitconsumptiontoreducefrom10kgto8kgperkgH2storagein2021-25E.•CommercializedproductionofT4cylindersmightbeachallengeandthekeycompetitivenessforcylinderproducers,inourview.CarbonfibreDomestic:•Sinofibers(300777.SZ)•WeihaiGuangwei(300699.SZ)•ZhongfuShenying•JilinTangu(836077.BJ)•Hengshen(832397.NQ)Global:•Toray(3402.T)•SGL(SGL.DF)•Hexcel(HXL.N)•HyosungAdvancedmaterials(298050.KS)Source:UBSChinahydrogensector8March2022ab8Upstream:by-productH2isourmostpreferredsectorby2030H+PEM/alkalineelectrolysersCO2CCUSCO2RenewablepowerCapturingCO2TransportInjection/storageCO2GasCoalHydrogenproductionDomestic:•Sinopec(600028.SS;0386.HK)•PetroChina(601857.SS;0857.HK)•BaofengEnergy(600989.SS)HydrogenproductionElectrolyserproducersDomestic:•The718thResearchInstituteofCSSC•SuzhouJingliHydrogenEquipment•SuzhouGuoshengShengyuanHydrogenEquipment•TianjinMainlandHydrogenEquipmentGlobal:•Nel(NEL.OL)•ThyssenKrupp(TKAG.DE)•ITM(ITM.L)•Siemens(SIEGn.DE)•Cummins(CMI.N)•McPhy(MCPHY.PA)By-producthydrogen•Satellitechemical(002648.SZ)•MeijinEnergy(000723.SZ)Carboncaptureandutilisationsystem(CCUS)•Sinopec(600028.SS;0386.HK)•GuanghuiEnergy(600256.SS)•Chinahydrogendemandtoreach60mtby2030E(vs.20mtby2020E),penetrationrateas%ofprimaryenergyupfrom2%to5%in2020-30E.•By-producedhydrogenisourtoppickby2030Edueto1)readilyavailabletechnologyandscale(18%of2020hydrogendemand);2)noadditionalcost/carbonemission;3)lesscompetitionduetolimitedtransmissionradius.•Greenhydrogentocontribute2%/10%of2025/30Ehydrogenproduction,implying1.1/7.0GWelectrolyserinstallationby2025/30E,assuming6,100/7,000utilisationhoursand5.5/4.5kWhpowerconsumptionpersqmofhydrogenby2020/30E.PEMDomestic:•DongyueGroup(0189.HK)Global:•Gore•Dupont(DUP.DF)•3M(MMM.N)BipolarplatesDomestic:ShanghaiZhizhenAdvancedTech&MaterialsMembraneelectrodeassembly(MEA)Global:Ballard(BLDP.O)GoreDupont(DUP.DF)Source:UBSChinahydrogensector8March2022ab9Howwillthecompetitivelandscapeevolvealongthehydrogenvaluechain?PIVOTALQUESTION2Chinahydrogensector8March2022ab10Q:Howwillthecompetitivelandscapeevolvealongthehydrogenvaluechain?UBSVIEWWelikecompaniesthatproduceH2asaby-productwithhighmargins,bettercost/carbonemissionportfoliosthangreen/fossil-basedhydrogen,andlesscompetitionduetodifficultiesontransportinghydrogen.Type1-3hydrogencylindersarehighlylocalised,whileweviewcylinderproducerswithaleadinT4ashavingamajoradvantage.ForFCsystemmakers,themarketisquitefragmentedandcompetitionfromdomestic/overseaspeerscouldbeintense,butwebelieveahighlocalisationratioandfurtherintegrationofindustrialchainscouldhelpmitigatetherisk.EVIDENCEAsofend-2021,62%ofH2producedinChinawascoal-based,mainlyburntorusedasachemicalfeedstock.Coal/gas-basedproductiongenerates22kg/10kgofCO2perkgofH2produced,versus1kgofCO2fromH2generatedasaby-productduringEDH/PDH.Thedomesticmarketoffuel-cellsystemshasbeenquitefragmented.SinoHytecremainedamongthethreelargestproducersinChinain2018-21,withmarketsharerisingfrom20%to30%,indicatingstrengthofitsleadershipcontinues.AlongtheFCEVsupplychain,cylinderandbipolarplatehavethehighestlocalisationratios(above90%).DomesticMEAandstackproducersarestillcatchingupwithoverseaspeers,whilePEMisheavilydependentonoverseasproducerswithalower-than-10%localisationratio.WHAT’SPRICEDIN?SatelliteChemicalandDongyueGrouparetradingbelow10x2022EPEandlaggingpeersaveragealongthevaluechain.SinoHytec’s2022E/23EPSisbelowglobalpeervaluationdespiteahigher2022-25ErevenueCAGR.Webelievetheupsidepotentialfromhydrogenisfarfrombeingfullypricedin.Chinahydrogensector8March2022ab11Comparisonofsubsectors–hydrogenexposure•Hydrogenrevenuecontribution:apartfromSinoHytecthathaspurehydrogenexposure,weexpecthydrogenexposureofCIMCEnricandSatelliteChemicaltoincreasefromlessthan1%to6-7%in2021-25,whileforDongyue,contributionfromthehydrogensectorwoulddependonshipmentofitsPEM(weassume400,000in2025Efromitsplanned1,500,000capacity).•Forhydrogenproduction,weexpect200,000tonnesofhydrogenforsalesforSatelliteChemicalin2025E(assumingthedownstreammarketisfullyexploited),andSinopec’s1,000HRSstogenerateabout200,000tonnesofhydrogensalesin2025E,accordingtocompanyguidance.•Carbonfibreforhydrogencylindersismainlyimportedfromoverseasproducers(eg,JapanToray),andweexpectincreasinglocalisationwiththestart-upofdomesticcapacity.Note:1)MinorityshareconsideredforEnricandDongyue(with70%/35%shareholdingassumptioninhydrogenassetsforEnric/Dongyuerespectively);Source:Companydata,UBS-Sestimates;SinoHytecSatelliteChemicalSinopecCIMCEnricDongyueGroupWeihaiGuangwei688399.SH002648.SZ600028.SH8289.HK0189.HK300699.SZSectorrelatedFuel-cellsystemBy-producthydrogenHydrogenproductionandrefuellingstation(HRS)Storagetanks/cylindersPFSAmembraneCarbonfibre2021E549160-1405N.A.2025E3,9644,0006,0001,6801824502021E100%0.6%0.0%0.9%0.1%N.A.2025E100%6.4%0.2%6.7%1.0%7.6%UBS-Sassumptions1.3GWsales&Rmb3,000/kWASPin2025E10/200ktsalesatRmb16/20perkgofH2in2021E/25E1,000HRSwith550kg/daysalesin2025ECompanyguidedmarketshareincreaseto30-40%in2025F10/400ksqmsalesatRmb1,500/1,300persqmin2021E/25E3ktsales(15%marketshare)atRmb150/kgin2025EMarketshare-domesticUBS-ScommentsSinoHytec'smarketshareincreasedfrom20%to30%in2018-21LargeSOEsarethemajorH2producersfornow(mainlyself-consumed)Sinopecguidedtobuild1,000HRS(>60%marketshare)by2025FMainlyT3cylinderssalesin2021,switchingtoT4in2021-25ESalesatinfancystageforDongyueanddomesticmarketOnlyincludesT700+carbonfibreformilitaryuseRevenuefromhydrogen(Rmbm)¹RevenuecontributionSinopec,14%CEIC,16%CNPC,10%SatelliteChemical,1%Others,59%Sinopec,74CNPC,4Meijin,8Others,135Sinofibers,16%Guangwei,40%Others,39%20%19%32%29%80%81%68%71%2018201920202021SinohytecOthersDongyue,2%Globalpeers,98%ChinaHRScount-2021ChinaH2production2021SinoHytecChinamarketshareEnricH2cylindermarketshare-China15%30%85%70%20212025FCIMCEnricOthersDongyuePEMglobalmarketshare-2021Domesticcarbonfibremarketshare-2021Chinahydrogensector8March2022ab12Comparisonofsubsectors–profitability•Fuel-cellvaluechain:weexpectastablemargintrendformostmaterial/componentproducers,whileFCsystemproducersmightbepressuredintheshortterm,mainlyduetointensecostcompetitionandamorefragmentedmarketinthedownstream.•By-producthydrogenismainlyburntasafuelorusedasachemicalfeedstocknowadays;weexpecthighmarginforby-producthydrogentobesoldasFCEVfuelwithadditionalcostonlyfromtransportation/compression(ASPshowninthetabledoesnotincludesubsidies.)•WeexpectHRSstobreakevenby2025E,withtheaverageutilisationraterisingfromabout30%in2021to50%in2025E.Source:Companydata,Mysteel,UBS-Sestimates;Note:1)Investmentinfuelcellsystemvariessubstantiallyacrossprojects2)TheSinomaprojectiscapacityexpansionofanexistingplantinSuzhou.3)TheRmb20.5bnistotalUBS-SestimatedcapexforSatellite’s125/80ktEDH/PDHcapacity.SinoHytecSatelliteChemicalSinopecCIMCEnricDongyueGroupWeihaiGuangweiSectorrelatedFuel-cellsystemBy-producthydrogenHRSandH2productionStoragetanks/cylindersPFSAmembraneCarbonfibre2021E11,00016404,0001,5002602025E2,90020272,0001,300150UBS-SassumptionsASPfromH-shareprospectus/UBS-Sestfor2021/25ESoldaschemicalfeedstockwithlowerASPin2021ReferencetoHRSslocatedinGuangdongBasedonHDTcostroadmapin2021-25EDomesticproducers'ASPlowerthanglobalpeers'BasedonT700carbonfibrepricesinJan-Feb20222021E6,500<5443,1003001562025E1,80010231,600250105UnitRmb/kWRmb/kgRmb/kgRmb/kgH2storageRmb/sqmRmb/kg2021E41%>90%-10%23%80%40%2025E38%80-90%15%20%81%30%UBS-SassumptionsModelassumptionsofSinoHytecIncl.transportation&compressioncostReferencetoHRSlocatedinGuangdong10/8kgcarbonfibreconsumptionperkgH2storagein2021/25ECostsavingfromlargereconomic-of-scaleBasedoncostofdomesticcivilcarbonfibreproducersExpectedGPtrend-UBS-SCostcompetitionisstillintenseRemainslargelystableCouldbreakevenin2025ERemainslargelystableMarketlandscaperemainsstrongStableinshortterm(civilonly)GPdriversdragsUnitinvestment¹Rmb75k/systemRmb10kpertonneofethyleneRmb15-25mnperHRS(<1,000kg/day)Rmb10kpercylinderRmb950/sqm(fullyintegrated)Rmb206/kg（filamentsincluded)Capacityconstructioncycle1-2years2-3years3-6monthswithin1year1year3-4yearsProjectforreference²SinoHytecphaseIIFCcapacitySatellitechemicalEDH/PDHprojectFromfeasibilityreportsofdomesticHRSSinomaSuzhou(5000T4cylindersperannum)Dongyue1,500ksqmPEMmembraneprojectZhongfuShenyingXi‘ningproject(10kt)Capexforhydrogen(21-25E,Rmbm)³3,25020,50030,0001,0001,420620GPperunitCostperunitASPperunit(Rmb)Noadditionalcostfromby-productH2RisingtransportationfeeforlongerdistancesLocalisationalongthevaluechainT4cylindersachievelarge-scaleproductionCarbonfibrepricesstayingstrongCompetitionfromdomestic&globalfirmsDomesticproducersachievescaleeconomiesCostcompetitionfromICEandBEVLowercarbonemission(cost)vsfossil-basedH2RisingutilisationandcapacityIntegratedproductionandretailchainSelf-suppliedPFSAandPTFELargereconomiesofscale;highentrybarrierSubsidycouldpotentiallyfadeawayDecreaseinhydrogenproductioncostEconomiesofscalewithcapacityramp-upMassivenewcapacityplannedSelf-suppliedprecursorsCompetitionfromdomesticnewentrantsLocalisationofcarbonfibreCompetitionfromnewstartPDHcapacityHigherpricesensitivityofcivildownstreamsegmentChinahydrogensector8March2022ab13FCvaluechain–whichsectoriskeenonlocalisation?Source:Companydata,UBS-Sestimates;Note:1)GlobalmarketshareforFCsystem,anddomesticmarketshareforothers.2)TotalcostisasumofFCsystemandhydrogencylindercosts.Overseasvs.Chinaproducers'marketshare¹2021EUBS-ScommentCostperunit-2022EAs%ofsystemcost²Targetcostperunit-2025ECriticalindicatorsThresholdCurrentstateThresholdCurrentstateDomesticmaturityRoadmapandcatalystsLeadingdomesticfirmsSinoHytec(Buy),Guohong,ShanghaiRefire70%localisationrateinChina;7%marketsharegloballyT3cylindersmostlylocalisedOverseasproducersdominategloballyImportdependencydecreasedsharplyin2020-21Highlocalisationrate;startingtoexportBallardisamajoroverseasproducerintheChinamarket•Costcatchingupwithglobalpeers•In-houseproductionofbothMEAandbipolarplates1.5w/sqcm1.5mm3.0kW/L4.0%(hydrogenwt%）>100kWDongyueGroup(initiatecoveragewithBuy)SunrisePower,SHPTShenli,GuohongShenli,XinyuanCIMCEnric(Buy),ShenyangCLD,BeijingCTCCatalystconsumptionLifecycleLifecyclePressure0.2-0.4g/kWPtformainstream0.1g/kWPt35MPaformainstream(T3cylinders)70MPa••Mature••••Catchingup•••Reducecatalystconsumptiontolowercost•Increaseproductperformanceandlocalisationratio•Scaleupandreducecost•Large-scaleproductionofT4cylinders•ST:securecarbonfibresupplyLT:reducecarbonfibreconsumption2.5A/sqcmChinaleadershavereachedthetarget5,000-10,000hrformainstream>10,000hrs1.2-1.6w/sqcmforChinaleaders1.5A/sqcmforChinaleaders15umforChinaleaders7-15umThickness•Increaseproductconsistencyandvariety•Achievelarge-scaleproduction••Early••••Catchingup••••Mature••2-3kW/Lformainstream5,000hrformainstream>8,000hrsMasspowerdensity•EstablishmentofhighlyintegratedFCvaluechain•IncreaselocalisationratealongthevaluechainOnlyafewtrialproductscanmeetthestandardsAfewproducers(ie,SinoHytec)canmeetthethreshold>700W/kgCurrentlyc.4%fordomesticcompaniesvs5%forToyota••Early••FCsystems(inclcylinders)PEMMEABipolarplatesStacksCylindersCurrentdensityH2storagedensityCapacityRmb3,000/kW14%Rmb2,000/kgH242%Rmb1,000/kW13%Rmb350/kW5%VolumepowerdensityRmb9,500/kWRmb4,000/kgH2100%CapacitydensityThicknessRmb1,500/sqmRmb2,400/kWRmb1,200/kWRmb4,000/kWRmb1,300/sqmRmb600/kW25%Protonexchangemembrane(PEM)Membraneelectrodeassembly(MEA)BipolarplatesStacksCylindersFuel-cell(FC)systemsAutoOEMsAuxiliariesCatalystlayersFrameandsealings7%<10%>90%>60%76%>90%Chinahydrogensector8March2022ab140.02.04.06.0RefiningAmmoniaandmethanolSteelHDTBusOff-roadvehiclesPassengervehiclesBluehydrogenPipelineCompression0.02.04.06.08.010.0RefiningAmmoniaandmethanolSteelHDTBusOff-roadvehiclesPassengervehiclesBluehydrogenPipelineCompressionTruckingRefuellingstationDemandparity0.02.04.06.0RefiningAmmoniaandmethanolSteelHDTBusOff-roadvehiclesPassengervehiclesGreenhydrogenPipelineCompressionTruckingRefuellingstationDemandparityDemandparity(USD40/tcarbontax)0.02.04.06.08.010.012.0RefiningAmmoniaandmethanolSteelHDTBusOff-roadvehiclesPassengervehiclesGreenhydrogenPipelineCompressionTruckingRefuellingstationDemandparityDownstream:whichsectormayreachcostparityfirstin2030?2020EChinabluehydrogendeliveredcostsvsbreakeven(parity)byapplication(US$/kg)2030EChinabluehydrogendeliveredcostsvsbreakeven(parity)byapplication(US$/kg)•HDTsandbusescouldbethefirsttoreachdemandparity(withoutcarbontaxscenario):weestimateHDTsandoff-roadvehiclescouldreachdemandparityin2030E,withhydrogencostdroppingbelowUS$2/kg.•IndustrialapplicationscouldreachbreakevenparitywithaUS$40/tonnecarbontax:webelieveacarbontaxwouldmakeusinggreenhydrogen-basedsteelacost-competitiveprocess;refiningandammoniaapplicationsaswellasoff-roadvehiclescouldallreachparity.Source:UBSestimatesNote:WeassumeCCUScostofRmb400/200/100pertonnein2020E/30E/50EtocapturehighconcentrationofCO2(70%);assumeaUS$40/tonnecarbontaxin2030E.2020EChinagreenhydrogendeliveredcostsvsbreakeven(parity)byapplication(US$/kg)2030EChinagreenhydrogendeliveredcostsvsbreakeven(parity)byapplication(US$/kg)Chinahydrogensector8March2022ab15HDT:roadmaptocostparitybyend-2030E•WebelievethreekeyfactorsarecentraltocomparingICEandFC-poweredHDTs:hydrogenpriceatthepump,vehiclepricesaftersubsidies,anddieselprices.•AtthecurrentsubsidyannouncedbytheShanghaigovernment,weestimatehydrogen-fuelledHDTscouldachievebreakevenataRmb40/kghydrogen-at-the-pumpprice.•Atourprojectedsubsidylevelsfor2025E,wecalculatethatFCHDTscoulddeliverasimilarIRR,at25.3%,similartotheIRRofICEataUS$70/bblBrentprice(aboutRmb6.2/litredieselpriceafterdiscount).•In2030E,webelieveFCEVHDTscouldbecost-competitivebydeliveringanearly40%IRR,thelevelachievedbyICEHDTsataboutaUS40/bbloilprice.Source:UBSestimatesLNGUS$45/bblUS$70/bbl2022E2025E2030E200KM400KM200KM800KMRetailpriceRmb10k30304116697698013080130SubsidyRmb10k(110)(50)(20)Priceaftersubsidy303041564749801306497OEMgrossprofitRmb10k3.03.03.515.013.010.010.015.010.015.0DealergrossprofitRmb10k0.50.50.51.000.80.60.50.50.50.5TruckcostofsalesRmb10k26.526.537.0149.983.658.769.5114.553.381.5EngineRmb10k8.08.010.0Engineafter-treatmentRmb10k1.51.54.0GearboxRmb10k1.51.51.5BatterypackRmb10k36.072.019.839.0BatterycapacityKWh400.0800.0380.0750.0BatterypriceRmb/KWh900.0900.0520.0520.0PowertrainRmb10k10.015.010.015.0OtherelectricpartsRmb10k8.012.08.012.0LNGtankRmb10k6.0----OthercostRmb10k15.515.515.515.515.515.515.5FuelCellSystemsRmb10k98.039.520.3StackRmb10k48.016.09.8UnitCostsRmb/Kw4,0001,000500LifetimeHours12,00018,00024,000SizeKw120160195BOPRmb10k50.023.510.5(UnitcostofBOP)Rmb/Kw4,1671,469538H2circulationsystemRmb10k8.03.51.5PumpsRmb10k12.05.02.0OtherauxiliarymodulesRmb10k30.015.07.0HydrogenTanksRmb10k16.010.07.5UnitCostsRmb/KG4,0002,0001,500TankSizeKG405050BatteryRmb10k5.45.65.4UnitCostsRmb/Kwh900700600BatterysizeKwh608090PowertrainRmb10k15.013.010.0OthercostsRmb10k15.515.515.5P&LestimatesAnnualfreightrevenueRmb10k104.1104.1104.1104.1104.1104.140.474.740.777.2Dailyrangekm500.0500.0500.0500.0500.0500.0200.0400.0200.0400.0Annualrange10kkm12.512.512.512.512.512.55.010.05.010.0FreightrateRmb/t/km0.350.350.350.350.350.350.350.350.350.35Truckweight-minTonne15.015.015.015.015.015.016.018.515.817.5Truckweight-maxTonne49.049.049.049.049.049.049.049.049.049.0AnnualexpenseRmb10k88.994.189.5103.087.480.573.080.570.876.0EnergycostRmb10k21.927.122.537.521.915.07.515.05.310.5Energyper100kmL(Diesel)/kg(LNG/H2)/KWh(EV)35.035.030.07.56.56.0150.0150.0150.0150.0EnergycostperunitRmb5.06.26.040.027.020.01.01.00.70.7RepairexpenseRmb10k2.02.02.00.50.50.50.50.50.50.5OtherexpenseRmb10k65.065.065.065.065.065.065.065.065.065.0AnnualprofitRmb10k15.310.014.61.116.723.6(32.6)(5.8)(30.1)1.2IRR43.0%23.1%25.8%na25.3%39.8%nanananaDieselFuelCellElectric(2021)Electric(2030E)Chinahydrogensector8March2022ab16Wheredoweexpectupside?WHAT’SPRICEDIN?Source:UBS-SestimatesEarningsrevisionCompanyRatingPricetarget(lcy)21Eearnings-Rmbm22Eearnings-Rmbm23Eearnings-RmbmNewOldChg.NewOldChg.NewOldChg.NewOldChg.DongyueGroupBuy14.00Initiate2,1693,2753,228CIMCEnricNeutral>Buy12.407.2072%8838099%1,0591,0095%1,2771,2344%SinoHytecBuy230.00380.00-39%(143)20N.M.4207-98%175329-47%ZhejiangSatelliteBuy57.0057.000%5,9985,9980%7,8507,8500%9,6729,6720%Sinopec-HBuy4.604.600%91,70691,7060%82,01782,0170%85,50285,5020%Chinahydrogensector8March2022ab17Dongyue(initiatewithBuy):growthfromPVDFandPEM•WeexpectthepriceofR142btoremainstrongin2022E,duetolackofmeaningfulincreaseinexternalsales,asnewcapacityallhaveintegratedpolyvinylidenefluoride(PVDF)capacity.Asofend-February2022,theR142bpricewasstillatahistoricalhighofRmb195/kg,supportingprofitabilityalongthePVDFvaluechain.•WebelieveDongyuehashighervisibilityamongPVDFcompanies,withitsintegratedR142b-PVDFproductionchainaswellastechnologyforbattery-gradePVDF.In2023E,weexpectthecompany'sPVDFsalestogoupfromabout12,000tto21,000t,andwebelieveitcouldconsolidateitsmarketpositionwithintegratedR142bcapacityandknowhowinbattery-gradePVDFproduction.•PEMremainsalong-termpotentialupsidecatalystforDongyue.Dongyue’ssubsidiary,FutureHydrogen,isaPEMleaderinChina,with500,000sqmPEMcapacity(1,500,000sqmtotalcapacityplanned).However,thedomesticPEMindustryisstillinitsinfancy,withlessthan10%localised.Weexpectsalesvolumegrowthtobeakeydriverofrevenuecontributionfromhydrogen.36464555532210103170887270172250160070140210280201920202021E2022E2023EPVDF-R142bR142b-R152aR152aspreadOthersEarningsofsubsectorsalongPVDFvaluechainSource:Baiinfo,Wind,UBS-Sestimates0100200300400PVDFR142bPricecomparison:PVDFvsR142bSource:Baiinfo0.20.20.20.81.70.40.30.41.51.10.41.01.20.00.71.42.12.83.52018201920202021E2022EPVDF&HydrogenOtherpolymersCyclicalDongyuenetprofitbysegment(Rmbbn)Source:Baiinfo,Wind,UBS-SestimatesRmb/kgRmb/kgChinahydrogensector8March2022ab18CIMCEnric(Buy):highvisibilityunderpinnedbybacklog•Weexpect85%/41%five-yearCAGRsforcylindersalesinChinaby2025E/30E,mainlydrivenbyincreasingcommercialFCEVsalesandconstructionofhydrogenrefuellingstations(HRSs).•WeexpectCIMCEnric'smarketshareinChinatoriseto30-40%from2025E,afteritsT4cylindercapacityrampsup.Newordersandbacklogforcleanenergymaintainedanupwardtrendin2020-21.•Weexpectchemical/liquidfoodrevenuetoincrease30%/15%in2022E,giventheupwardnewordertrendin2020-21,withover100%YoYgrowthinnewordersforchemical/liquidfoodequipmentinSep2021.•WecrosscheckourpricetargetusingaSOTPmethod.Weexpect5%earningscontributionfromcylindersin2023Eandassign30x2023EPE(implying0.4xPEG)valuationasweexpectthehydrogensectortodelivera75%earningsCAGRin2023-25E.CIMCEnricrevenuefromhydrogenandmarketshareinChinaSource:GGII,UBSSestimates20%24%28%32%36%-5001,0001,5002,0002,5003,000202020212022E2023E2024E2025ECIMCEnrichydrogenrevenuemarketshare%180200220240260-1530456075Jun-20Sep-20Jun-21Sep-21Backlog-LHSNeworders-RHSRmbmRmbm03,0006,0009,00012,00015,000Feb-20Jun-20Sep-20Feb-21Jun-21Sep-21CleanenergyChemical&EnvironmentalLiquidfoodBacklogandnewordersforcleanenergyNewordersbysegmentSource:CompanydataSource:CompanydataRmbmRmbmChinahydrogensector8March2022ab19Satellite(Buy,KeyCall):potentialhydrogenupsidenotpricedinSource:Companydata,UBS-Sestimates;Note:forfeedstockofhydrogenperoxideandbutyl/octanol:40878736(60)190060120180240300PDHEDHPhaseIEDHPhaseIIPDHunderplanConsumedinprocessHydrogenBalancektSatellite'shydrogenproductionandsalesvolume-2023EComparedtofossil-based/greenhydrogen,webelieveby-producthydrogencouldhaveabettercost/carbonemissionportfolioby2030E•62%ofhydrogenproducedinChinawascoal-basedasofend-2021,mainlyburntasfuelorusedaschemicalfeedstock•Coal/gas-basedproductiongenerates22kg/10kgofCO2perkgofhydrogenproduced,versus1kgofCO2perkgofhydrogenproducedduringEDH/PDH•Weexpectelectrolyserinstallationtoreach7GWin2030E,contributingabout10%oftotalhydrogenproductionWeexpectSatellitetohaveatleast190,000tofhydrogenforsalesbyend-2023E•250,000-300,000tofby-producthydrogenfromPDH/EDHcapacitiesin2023E•About60,000tconsumptionduringproduction(asfeedstockofH2O2andbutanol/octanol)HydrogencouldhavepotentialGPupsideofRmb3.8bnin2023-25E•WeassumeanRmb20/kgsellingprice(supportedbygreen/bluehydrogencost)plusanRmb10/kgsubsidy,andanRmb10/kgcompressionandtransmissioncost•Ourmodelhasnotfactoredinthepotentialupside,andwebelieveitisalsonotfullypricedinbyconsensus(withthecompanytradingat9x2022EPE),duetouncertaintyaroundhydrogendevelopment.010,00020,00030,00040,00050,00060,00070,0002018201920202021E2022E2023EEDHvaluechainPDHvaluechainChemicalnewmaterialOtherchemicalsRmbmSatelliterevenuebysegmentChinahydrogensector8March2022ab20SinoHytec(Buy):leadershipinmarketshareandpatentcountPatentapplicationvolumecomparison–ChinaPatentapplicationvolumecomparison–JapanandKoreaWelowerour2021-23earningsforecastsforSinoHytecbymorethan40%,withPTdownfromRmb380.00toRmb230.00(implying8.2x/5.4x/4.1x2023E/24E/25EPS,versus11.4x/7.0x/4.2xbasedontheoldPT),mainlyduetolower-than-expectedshipmentin2021.Howeverweremainupbeatonthecompany’slong-termprospects,aswebelieve:•Steadymarketsharegainsinthepastfewyears:thecompanyremainedamongthethreelargestproducersinChinain2018-21,withmarketsharerisingfrom20%to30%,indicatingstrengthofitsleadershipdrivesbusinessgrowth.•StrongR&Dinitiativeswithrisingpatentapplications:accordingtoUBSEvidenceLabdata,SinoHytec’spatentapplicationsincreasedto113in2020,frombelow20inthepastfewyears.Thecompanyhadmorethan460patentapplicationsasofSeptember2021,basedonitsH-shareprospectus.20%19%32%29%80%81%68%71%2018201920202021SinohytecOthersSinoHytecdomesticmarketshare–2018-21020406080100120201020112012201320142015201620172018201920202021SinoHytecWeifuHigh-TechSHPT024681012141618201020112012201320142015201620172018201920202021ThousandsToyotagroupHyundaiMotorSource:Companydata,UBSEvidenceLab(>Accessdataset)Chinahydrogensector8March2022ab21SinoHytec(Buy):DCFassumptionsWederiveourpricetargetofRmb230.00fromathree-stageDCFvaluation(WACC:10.0%),whichimplies8.2x/5.4x/4.1x2023E/24E/25EPS,adiscounttoBallardandPlugPowerat6.4x/4.4x2025FComparedwithconsensus,ourforecastsaremoreconservativeintheshorttermbutmorepositiveinthelongterm.WeareconcernedaboutintensecompetitionintheFCmarket,butinthelongterm,weareupbeataboutSinoHytec’sleadershipadvantage,henceourrevenue/netprofitforecastsfor2023-24aremuchclosertoconsensus.Source:UBS-SestimatesUBS-Sestimatesvsconsensus202220232024UBSS1,1281,9913,067Consensus(Reuters)1,5772,2733,353Diff%-28.5%-12.4%-8.5%UBSS4175282Consensus(Reuters)134187N.A.Diff%-96.7%-6.5%Revenue(Rmbmn)NetProfit(Rmbmn)Source:UBS-Sestimates,Reuters:InputsforDCFvaluationValuationsummaryContributionstoDCF-basedenterprisevalue(RMBm)(Rmbb)Medium-termgrowthperiod10yearsStage1DCF(2,100)Reinvestmentrate50.0%Stage2DCF7,061Medium-termROIC20.8%Stage3Terminalvalue11,512Medium-termgrowthrate10.4%Non-coreoperations192Terminalgrowthrate4.0%Totalenterprisevalue16,665TerminalROIC9.0%Add:Netcash(122)WACCderivationMinorityinterests(132)Risk-freerate3.1%3.6%NPV16,411Equityriskpremium5.0%Sharesoutstanding(m)71.35Beta1.139Valuation(RMB)-2022230.0056.75305.3%Costofequity8.8%Costofdebt5.5%46.95552Marginaltaxrate15.0%Aftertaxcostofdebt4.7%-4608.00Debt/totalcapital15.0%69.82WACC8.2%CashflowperiodandValuationinputsPricetargetyear2022CurrencyRMBNetdebt(atFY-start2022)122Minorityinterests(atFY-start2022)132Valueofnon-coreoperations192-13%42%69%1%-5051015202023-20272028-2037TerminalJVChinahydrogensector8March2022ab22SinoHytec(Buy):upside/downsidespectrumRiskstothecurrentsharepriceisskewed(3:1)totheupsideUPSIDE(Rmb300.00):OurupsidecaseassumesahydrogenpriceatthepumpofaroundRmb20/kgaftersubsidy(Rmb34/kgbeforesubsidy)in2025E.WeassumetheFCEVmarketinChinarampsupfasterthanexpected,withownershipreaching150,000unitsin2025E.SinoHytecwouldbenefitasamarketleaderandrealisearevenueCAGRof80%in2021-25E.Wealsoassumethecompanyleadswithstronger-than-expectedcostreduction,withFCsystemcostdeclining36%YoYin2025EtoRmb1,500/kW.OurvaluationofRmb300.00isbasedonaDCFmethod,implying9.1x/6.3x2023E/24EPS,slightlyhigherthanglobalpeers’givenafastergrowthoutlookfortheChinamarket.BASE(Rmb230.00):WeforecastahydrogenpriceatthepumpofRmb27/kgaftersubsidy(Rmb37/kgbeforesubsidy)in2025E.WeexpectstronggrowthintheChinaFCEVmarket,drivingownershipto91,940unitsin2025E.WebelieveSinoHyteccouldmaintainitsleadership,asitremainscompetitiveinR&DofnewproductsandreductionofFCsystemcosts.Weestimatea63%revenueCAGRin2021-25andaverageFCsystemunitcostofRmb1,900/kWin2025E(down23%YoY).OurpricetargetofRmb230.00isbasedonaDCFmethod,implying8.2x/5.4x2023E/24EPS,ataslightdiscounttoglobalpeervaluation.DOWNSIDE(Rmb121.00):OurdownsidecaseassumesahydrogenpriceatthepumpofRmb35/kgaftersubsidy(Rmb45/kgbeforesubsidy)in2025E.WeassumeslowergrowthintheChinaFCEVmarketthanourbasecase,leadingto60,000unitsofFCEVownershipin2025E.SinoHytecwouldfaceincreasedcompetitionfromdomesticpeerssuchasRefire,Sunrise,FTXTandSHPT.Therefore,weassumeamoreconservativesalesvolume,drivinga50%revenueCAGRin2021-25E,aswellaslesseffectivecost-reductionefforts,withFCsystemunitcostatRmb2,300/kWin2025E.OurvaluationofRmb121.00isbasedonaDCFmethod,implying7.3x/4.5x2023E/24EPS,atadeepdiscounttoglobalpeers’duetoslower-than-expectedhydrogendevelopmentinChina.Valuedrivers(2025E)Levelisedcostofhydrogen（LCOH)atpumpaftersubsidy(Rmb/kg)FCEVownership(units)FCsystemcost(Rmb/kW)RevenueCAGR(2021-25E)Rmb300.00upside20150,0001,50080%Rmb230.00base2791,9401,90063%Rmb121.00downside3560,0002,30050%Source:UBS-Sestimates:+84%+41%-26%100120140160180200220240260280300320202020212022Upside:Base:Downside:300.00230.00121.009.3x9.2x8.7x2,5001,9911,200Rmb162.99688339.SSPrice07Mar+12mo.Sales12/23EUpsidetoDownside3to1EV/SalesImpliedChinahydrogensector8March2022ab23Valuationbandsforhydrogen-relatedUBS-Scoverages•ValuationoftheChinahydrogensectorhasgenerallyretreatedsinceend-2021,whichwebelieveismainlyduetobearishsentimentoverlowshort-termgrowthvisibilityandlower-than-expecteddeliveriesintheFCEVmarket.•SinoHytechasbeentradingat1SDbelowitshistoricalaverage.Wecontinuetopreferthecompanygiven:1)100%revenuecontributionfromhydrogen;and2)itssectorleadership,evidencedbyitsleadingmarketshareandrisingpatentcountinthepastfewyears.•DongyueGroup’svaluationhasdroppedfromahighlevelin2021,with2022EPEbelow10x.WebelievethemarkethasoverreactedaboutDongyue’scyclicitywhileneglectingitsimprovingbusinessexposuretowardsPVDF.0510152025Feb-18Aug-18Feb-19Aug-19Feb-20Aug-20Feb-21Aug-21Feb-2212-monthforwardP/EHistoricalaveragePE+1S.D.-1S.D.5152535Aug-20Oct-20Dec-20Feb-21Apr-21Jun-21Aug-21Oct-21Dec-21Feb-2212-monthforwardP/SHistoricalaveragePS+1S.D.-1S.D.CIMCEnric-PEbandSinoHytec-P/SbandDongyueGroup-PEband048121620Feb-18Aug-18Feb-19Aug-19Feb-20Aug-20Feb-21Aug-21Feb-2212-monthforwardP/EHistoricalaveragePE+1S.D.-1S.D.CIMCEnric-P/BVvsROEbandSinoHytec-P/BVvsROEbandDongyueGroup-P/BVvsROEband(6)(4)(2)-22.04.06.08.010.012.0Aug-20Oct-20Dec-20Feb-21Apr-21Jun-21Aug-21Oct-21Dec-21Feb-22Apr-22Jun-22Aug-22Oct-22Dec-2212-monthforwardPB(LHS)HistoricalaveragePB(LHS)+1S.D(LHS)-1S.D(LHS)AverageROE%(x)3691215180.01.02.03.0Feb-18May-18Aug-18Nov-18Feb-19May-19Aug-19Nov-19Feb-20May-20Aug-20Nov-20Feb-21May-21Aug-21Nov-21Feb-22May-22Aug-22Nov-2212-monthforwardPB(LHS)HistoricalaveragePB(LHS)+1S.D(LHS)-1S.D(LHS)AverageROE%(x)-12243648600.00.81.62.43.24.0Feb-18May-18Aug-18Nov-18Feb-19May-19Aug-19Nov-19Feb-20May-20Aug-20Nov-20Feb-21May-21Aug-21Nov-21Feb-22May-22Aug-22Nov-2212-monthforwardPB(LHS)HistoricalaveragePB(LHS)+1S.D(LHS)-1S.D(LHS)AverageROE%(x)Source:Wind,UBS-SestimatesChinahydrogensector8March2022ab24Valuations–hydrogenvaluechain•SinoHytecistradingat10.8x/6.1x2022E/23EP/S,lowerthanglobalpeers’11.3x/7.3x,whileweexpectSinoHytectoachievea54%2022-25ErevenueCAGR.WethinkthemarketisconcernedaboutcostcompetitionintheFCsystemindustry,butweareupbeataboutthecompany’slong-termgrowthprospects,supportedbyitsleadershipinmarketshareandpatentapplicationvolume.•SatelliteChemical/DongyueGrouparetradingat9.1x/5.6x2022EPE,muchlowerthanpeersalongthevaluechain.Wethinktheyarestillviewedbyinvestorsascommoditychemicalproducers,withpotentialupsidefromhydrogentransitionunlikelyfullypricedin.•CIMCEnric’ssharepricehasretreated24%sinceend-2021andistradingat13.0x2022EPE,closetoitshistoricalaveragelevel.However,weexpectthehydrogensectortocontributeabout10%ofitstotalrevenuein2025E;ourSOTPvaluationsuggeststhepotentialupsideisnotfullypricedin.Source:Reuters,UBS-Sestimates;Note:Abovedataasof7March2022.Chinahydrogensector8March2022ab25UBSEvidenceLabisasell-sideteamofexpertsthatworkacross55+specializedlabscreatinginsight-readydatasets.Theexpertsturndataintoevidencebyapplyingacombinationoftoolsandtechniquestoharvest,cleanse,andconnectbillionsofdataitemseachmonth.Since2014,UBSResearchanalystshaveutilizedtheexpertiseofUBSEvidenceLabforinsight-readydatasetsoncompanies,sectors,andthemes,resultingintheproductionofthousandsofdifferentiatedUBSResearchreports.UBSEvidenceLabdoesnotprovideinvestmentrecommendationsoradvicebutprovidesinsight-readydatasetsforfurtheranalysisbyUBSResearchandbyclients.AllpublishedUBSEvidenceLabcontentisavailableviaUBSNeo.Theamountandtypeofcontentavailablemayvary.PleasecontactyourUBSsalesrepresentativeifyouwishtodiscussaccess.UBSEvidenceLab'sPatentTrackerminesover100millionpatentrecordsinover90countriestoteaseouttrendsininnovationandtracktheevolvementofcompanies'intellectualpropertystrategies.Datacanbefilteredbypatentclassificationcodeand/orbykeywordtodiscoverwhichcompaniesareleadinginnovatorsamongtheirpeersanddetecttechnologies/serviceswhereR&Disintensifying.Chinahydrogensector8March2022ab26ValuationMethodandRiskStatementWebelievethemaindownsideriskstothehydrogenindustryinclude:1)slower-than-expecteddevelopmentofthehydrogenmarket;2)lower-than-expectedcostreductionalongthevaluechain;3)slower-than-expectedtechnologybreakthroughs;4)lessfavourablesubsidypolicyonhydrogenthanotherenergysources;5)disruptionfromenergytransition;and6)cyclicalswingsinmacroeconomicconditions.WeuseaSOTPmethodologytoderiveDongyueGroup'spricetarget.Keydownsiderisksinclude:1)highvolatilityoforganicsilicone/refrigerantprices;2)policyrisksassociatedwithPVDF/fluorochemicalproducts;3)electricvehiclesarethemajordownstreammarketforbattery-gradePVDFandtheindustryisstillyoung,makingitvulnerabletotechnological/policyrisks;and4)thecompanyalsohaspropertysegment,whichisexposedtoproperty-relatedrisks.WevalueSinoHytecusingaDCFmethodology.Webelievedownsiderisksinclude:1)FCEVsubsidypolicy—subsidiesfromcentralandlocalgovernmentscouldbelowerthanourestimates,orlower-than-expectedper-vehiclesubsidyforcitybusesandHDTs,especiallyintheearlyadoptionperiod;2)competitionintheChinaFCsystemmarketcouldintensifyasautoOEMscontinuetoestablish/expandtheirFCsystembusinesses;3)foreigncompaniescouldincreasetheirpresenceinChina;4)long-termoilpricesfallingsharplyandunderminingtherelativepricecompetitivenessofhydrogenfuel;5)declinesinthelevelisedcostofhydrogenmissingourexpectation,creatingobstaclestodeepFCEVpenetration;6)limitedby-producthydrogenfrompetrochemicalplantsleadingtoshortageofhydrogenfuelsupplyatrefuellingstations.WevalueCIMCEnricusingaDCFmethodology.DemandforEnric'senergyequipmentisdependentongasdemandgrowthinChina.Ifgrowthslows,demandforLNGtrailers,tankcontainersandstoragetankscouldmissexpectations.DemandforEnric'schemicalequipmentiscloselyrelatedtoglobalmacroeconomicgrowthmomentumanddemandforchemicalproducttransportation.Iftheglobaleconomyslows,lowerchemicaltradingactivitycouldnegativelyimpactdemandforchemicalcontainers.LiquidfoodrevenuecouldalsobeimpactedbyaslowdowninGDPgrowthandweakcustomercapex.MaterialchangestoFXratesfortheUSdollar,euroandrenminbicoulderoderevenueandmarginsofEnric'sliquidfoodandchemicalsegments.Unexpectedpolicychanges,suchasapauseinpromotingnaturalgasconsumption,couldconstituterisks.MechanicalfailureandaccidentscoulddisruptEnric'sbusinessoperations.WevalueZhejiangSatelliteonP/BV-ROE.Keydownsiderisksinclude:1)geopoliticsandtradepoliciescouldleadtovolatilerawmaterialpricesandsupplyasthecompanydependsonethaneimportedfromtheUS;2)hydrogenandlithium-ionbatterymaterialsareinaninitialdevelopmentstageandcouldfaceprofoundchangestoindustrylandscapeandpolicies;3)theolefinsector,withrelativelyhighenergyconsumption,isgreatlyaffectedbypoliciesrelatedtocarbonneutrality;and4)ethanepricesarealsosubjecttofluctuatingoilandnatgasprices.InChina,webelievegovernmentinterventionintheeventofamaterialspikeinglobaloilpricesisakeyrisk.Governmentinterventioncanincludepoliciesrelatedto,forexample,downstreamrefinedproductpricecapsorupstreamoilwindfallprofittaxes.Oilprices,refiningmarginsandpetrochemicalspreadscanbevolatile,highlycyclicalandseasonalinnature.Therefore,changesinouroutlookforglobalGDPgrowthorseasonaldemandandinventorylevelscanhaveamaterialimpactonourearningsexpectationsinthelongandnearterm.Givenlargeprojectsplannedinthesector,executionriskexists.Finally,plantmechanicalfailureisariskforoilandchemicalmanufacturers.TovalueSinopec,weuseasum-of-the-partsapproach.ExplorationandproductionassetsarevaluedusingNAVof2Preserves(10%WACC)onaproject-by-projectbasis.Downstreamassets,includingrefining,marketingandpetrochemicalassets,arevaluedbasedonEV/EBITDApeermultiples.Chinahydrogensector8March2022ab27RequiredDisclosuresThisreporthasbeenpreparedbyUBSSecuritiesAsiaLimited,anaffiliateofUBSAG.UBSAG,itssubsidiaries,branchesandaffiliatesarereferredtohereinasUBS.ForinformationonthewaysinwhichUBSmanagesconflictsandmaintainsindependenceofitsresearchproduct;historicalperformanceinformation;certainadditionaldisclosuresconcerningUBSresearchrecommendations;andtermsandconditionsforcertainthirdpartydatausedinresearchreport,pleasevisithttps://www.ubs.com/disclosures.Thefigurescontainedinperformancechartsrefertothepast;pastperformanceisnotareliableindicatoroffutureresults.Additionalinformationwillbemadeavailableuponrequest.UBSSecuritiesCo.LimitedislicensedtoconductsecuritiesinvestmentconsultancybusinessesbytheChinaSecuritiesRegulatoryCommission.UBSactsormayactasprincipalinthedebtsecurities(orinrelatedderivatives)thatmaybethesubjectofthisreport.Thisrecommendationwasfinalizedon:08March202202:31AMGMT.UBShasdesignatedcertainResearchdepartmentmembersasDerivativesResearchAnalystswherethosedepartmentmemberspublishresearchprincipallyontheanalysisofthepriceormarketforaderivative,andprovideinformationreasonablysufficientuponwhichtobaseadecisiontoenterintoaderivativestransaction.WhereDerivativesResearchAnalystsco-authorresearchreportswithEquityResearchAnalystsorEconomists,theDerivativesResearchAnalystisresponsibleforthederivativesinvestmentviews,forecasts,and/orrecommendations.QuantitativeResearchReview:UBSpublishesaquantitativeassessmentofitsanalysts'responsestocertainquestionsaboutthelikelihoodofanoccurrenceofanumberofshorttermfactorsinaproductknownasthe'QuantitativeResearchReview'.Viewscontainedinthisassessmentonaparticularstockreflectonlytheviewsonthoseshorttermfactorswhichareadifferenttimeframetothe12-monthtimeframereflectedinanyequityratingsetoutinthisnote.Forthelatestresponses,pleaseclickhttps://neo.ubs.com/quantitative,orspeaktoyourUBSsalesrepresentativeforaccesstothereport.AnalystCertification:Eachresearchanalystprimarilyresponsibleforthecontentofthisresearchreport,inwholeorinpart,certifiesthatwithrespecttoeachsecurityorissuerthattheanalystcoveredinthisreport:(1)alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthosesecuritiesorissuersandwerepreparedinanindependentmanner,includingwithrespecttoUBS,and(2)nopartofhisorhercompensationwas,is,orwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewsexpressedbythatresearchanalystintheresearchreport.UBSInvestmentResearch:GlobalEquityRatingDefinitions12-MonthRatingDefinitionCoverage1IBServices2BuyFSRis>6%abovetheMRA.55%32%NeutralFSRisbetween-6%and6%oftheMRA.35%29%SellFSRis>6%belowtheMRA.10%26%Short-TermRatingDefinitionCoverage3IBServices4BuyStockpriceexpectedtorisewithinthreemonthsfromthetimetheratingwasassignedbecauseofaspecificcatalystorevent.<1%<1%SellStockpriceexpectedtofallwithinthreemonthsfromthetimetheratingwasassignedbecauseofaspecificcatalystorevent.<1%<1%Source:UBS.Ratingallocationsareasof31December2021.1:Percentageofcompaniesundercoveragegloballywithinthe12-monthratingcategory.2:Percentageofcompanieswithinthe12-monthratingcategoryforwhichinvestmentbanking(IB)serviceswereprovidedwithinthepast12months.3:PercentageofcompaniesundercoveragegloballywithintheShort-Termratingcategory.4:PercentageofcompanieswithintheShort-Termratingcategoryforwhichinvestmentbanking(IB)serviceswereprovidedwithinthepast12months.KEYDEFINITIONS:ForecastStockReturn(FSR)isdefinedasexpectedpercentagepriceappreciationplusgrossdividendyieldoverthenext12months.Insomecases,thisyieldmaybebasedonaccrueddividends.MarketReturnAssumption(MRA)isdefinedastheone-yearlocalmarketinterestrateplus5%(aproxyfor,andnotaforecastof,theequityriskpremium).UnderReview(UR)StocksmaybeflaggedasURbytheanalyst,indicatingthatthestock'spricetargetand/orratingaresubjecttopossiblechangeinthenearterm,usuallyinresponsetoaneventthatmayaffecttheinvestmentcaseorvaluation.Short-TermRatingsreflecttheexpectednear-term(uptothreemonths)performanceofthestockanddonotreflectanychangeinthefundamentalvieworinvestmentcase.EquityPriceTargetshaveaninvestmenthorizonof12months.EXCEPTIONSANDSPECIALCASES:UKandEuropeanInvestmentFundratingsanddefinitionsare:Buy:Positiveonfactorssuchasstructure,management,performancerecord,discount;Neutral:Neutralonfactorssuchasstructure,management,performancerecord,discount;Sell:Negativeonfactorssuchasstructure,management,performancerecord,discount.CoreBandingExceptions(CBE):Exceptionstothestandard+/-6%bandsmaybegrantedbytheInvestmentReviewCommittee(IRC).FactorsconsideredbytheIRCincludethestock'svolatilityandthecreditspreadoftherespectivecompany'sdebt.Asaresult,stocksdeemedtobeveryhighorlowriskmaybesubjecttohigherorlowerbandsastheyrelatetotherating.Whensuchexceptionsapply,theywillbeidentifiedintheCompanyDisclosurestableintherelevantresearchpiece.Chinahydrogensector8March2022ab28Researchanalystscontributingtothisreportwhoareemployedbyanynon-USaffiliateofUBSSecuritiesLLCarenotregistered/qualifiedasresearchanalystswithFINRA.SuchanalystsmaynotbeassociatedpersonsofUBSSecuritiesLLCandthereforearenotsubjecttotheFINRArestrictionsoncommunicationswithasubjectcompany,publicappearances,andtradingsecuritiesheldbyaresearchanalystaccount.Thenameofeachaffiliateandanalystemployedbythataffiliatecontributingtothisreport,ifany,follows.UBSAGHongKongBranch:KenLiu,SabrinaLiu.UBSSecuritiesCo.Limited:AmilyGuo,JiaweiWang,RichardLi,WeiShen.CompanyDisclosuresCompanyNameReuters12-monthratingPricePricedateBeijingSinoHytec13688339.SSBuyRmb162.9907Mar2022CIMCEnric3899.HKSuspendedHK$8.5707Mar2022DongyueGroup16a0189.HKNoRatingHK$10.0607Mar2022Sinopec-H18,16a,16b0386.HKBuyHK$3.8007Mar2022ZhejiangSatelliteChemical002648.SZBuyRmb41.7107Mar2022Source:UBS.Allpricesasoflocalmarketclose.Ratingsinthistablearethemostcurrentpublishedratingspriortothisreport.Theymaybemorerecentthanthestockpricingdate.13.UBSAG,itsaffiliatesorsubsidiariesbeneficiallyowned1%ormoreofaclassofthiscompany`scommonequitysecuritiesasoflastmonth`send(orthepriormonth`sendifthisreportisdatedlessthan10daysafterthemostrecentmonth`send).16a.UBSSecuritiesHongKongLimitedisamarketmakerintheHongKong-listedsecuritiesofthiscompany.16b.UBSSecuritiesLLCmakesamarketinthesecuritiesand/orADRsofthiscompany.18.MarketcapitalisationiscalculatedbymultiplyingthecurrentsharepricebythesumofAandHshares.Unlessotherwiseindicated,pleaserefertotheValuationandRisksectionswithinthebodyofthisreport.Foracompletesetofdisclosurestatementsassociatedwiththecompaniesdiscussedinthisreport,includinginformationonvaluationandrisk,pleasecontactUBSSecuritiesLLC,1285AvenueofAmericas,NewYork,NY10019,USA,Attention:InvestmentResearch.CIMCEnric(HK$)PriceTarget(HK$)StockPrice(HK$)0481216BuyNeutralNoRatingDateStockPrice(HK$)PriceTarget(HK$)Rating2018-12-036.59-NoRating2019-01-145.927.50Buy2019-03-287.868.30Neutral2019-06-266.147.70Buy2020-01-224.797.00Buy2020-03-054.105.70Buy2020-08-063.385.40Buy2021-01-135.145.90Buy2021-03-295.54-NoRating2021-05-056.597.20NeutralChinahydrogensector8March2022ab29DateStockPrice(HK$)PriceTarget(HK$)Rating2021-11-239.25-NoRatingSource:UBS;asof03-Mar-2022BeijingSinoHytec(Rmb)PriceTarget(Rmb)StockPrice(Rmb)080160240320400BuyNoRatingDateStockPrice(Rmb)PriceTarget(Rmb)Rating2018-12-03NaN-NoRating2021-12-06317.50380.00BuySource:UBS;asof03-Mar-2022DongyueGroup(HK$)PriceTarget(HK$)StockPrice(HK$)0612182430NoRatingDateStockPrice(HK$)PriceTarget(HK$)Rating2018-12-034.51-NoRatingSource:UBS;asof03-Mar-2022Chinahydrogensector8March2022ab30Sinopec-H(HK$)PriceTarget(HK$)StockPrice(HK$)0246810BuyNeutralDateStockPrice(HK$)PriceTarget(HK$)Rating2018-12-036.919.00Buy2018-12-126.428.30Buy2019-04-236.097.50Buy2019-05-275.627.00Buy2019-08-264.565.90Buy2019-09-104.785.80Buy2019-10-234.594.90Neutral2020-02-104.204.40Neutral2020-03-163.724.30Buy2020-05-193.764.20Buy2021-01-113.734.40Buy2021-01-253.874.70Buy2021-05-174.064.90Buy2021-09-213.854.60BuySource:UBS;asof03-Mar-2022ZhejiangSatelliteChemical(Rmb)PriceTarget(Rmb)StockPrice(Rmb)01224364860BuyNoRatingDateStockPrice(Rmb)PriceTarget(Rmb)Rating2018-12-037.41-NoRating2021-11-2539.1557.00BuyChinahydrogensector8March2022ab31Source:UBS;asof03-Mar-2022Chinahydrogensector8March2022ab32TheDisclaimerrelevanttoGlobalWealthManagementclientsfollowstheGlobalDisclaimer.GlobalDisclaimerThisdocumenthasbeenpreparedbyUBSSecuritiesAsiaLimited,anaffiliateofUBSAG.UBSAG,itssubsidiaries,branchesandaffiliatesarereferredtohereinasUBS.ThisDocumentisprovidedsolelytorecipientswhoareexpresslyauthorizedbyUBStoreceiveit.IfyouarenotsoauthorizedyoumustimmediatelydestroytheDocument.GlobalResearchisprovidedtoourclientsthroughUBSNeo,andincertaininstances,UBS.comandanyothersystemordistributionmethodspecificallyidentifiedinoneormorecommunicationsdistributedthroughUBSNeoorUBS.com(eachasystem)asanapprovedmeansfordistributingGlobalResearch.ItmayalsobemadeavailablethroughthirdpartyvendorsanddistributedbyUBSand/orthirdpartiesviae-mailoralternativeelectronicmeans.AllGlobalResearchisavailableonUBSNeo.PleasecontactyourUBSsalesrepresentativeifyouwishtodiscussyouraccesstoUBSNeo.WhereGlobalResearchrefersto"UBSEvidenceLabInside"orhasmadeuseofdataprovidedbyUBSEvidenceLabandyouwouldliketoaccessthatdatapleasecontactyourUBSsalesrepresentative.UBSEvidenceLabdataisavailableonUBSNeo.ThelevelandtypesofservicesprovidedbyGlobalResearchandUBSEvidenceLabtoaclientmayvarydependinguponvar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essarilyaguidetofutureperformance.NeitherUBSnoranyofitsdirectors,employeesoragentsacceptsanyliabilityforanyloss(includinginvestmentloss)ordamagearisingoutoftheuseofalloranyoftheInformation.Priortomakinganyinvestmentorfinancialdecisions,anyrecipientofthisdocumentortheinformationshouldtakestepstounderstandtheriskandreturnoftheinvestmentandseekindividualizedadvicefromhisorherpersonalfinancial,legal,taxandotherprofessionaladvisorsthattakesintoaccountalltheparticularfactsandcircumstancesofhisorherinvestmentobjectives.Anypricesstatedinthisdocumentareforinformationpurposesonlyanddonotrepresentvaluationsforindividualsecuritiesorotherfinancialinstruments.Thereisnorepresentationthatanytransactioncanorcouldhavebeeneffectedatthoseprices,andanypricesdonotnecessarilyreflectUBS'sinternalbooksandrecordsortheoreticalmodel-basedvaluationsandmaybebasedoncertainassumptions.DifferentassumptionsbyUBSoranyothersourcemayyieldsubstantiallydifferentresults.Norepresentationorwarranty,eitherexpressedorimplied,isprovidedinrelationtotheaccuracy,completenessorreliabilityoftheinformationcontainedinanymaterialstowhichthisdocumentrelates(the"Information"),exceptwithrespecttoInformationconcerningUBS.TheInformationisnotintendedtobeacompletestatementorsummaryofthesecurities,marketsordevelopmentsreferredtointhedocument.UBSdoesnotundertaketoupdateorkeepcurrenttheInformation.Anyopinionsexpressedinthisdocumentmaychangewithoutnoticeandmaydifferorbecontrarytoopinionsexpressedbyotherbusinessareasorgroups,personnelorotherrepresentativeofUBS.AnystatementscontainedinthisreportattributedtoathirdpartyrepresentUBS'sinterpretationofthedata,informationand/oropinionsprovidedbythatthirdpartyeitherpubliclyorthroughasubscriptionservice,andsuchuseandinterpretationhavenotbeenreviewedbythethirdparty.InnocircumstancesmaythisdocumentoranyoftheInformation(includinganyforecast,value,indexorothercalculatedamount("Values"))beusedforanyofthefollowingpurposes:(i)valuationoraccountingpurposes;(ii)todeterminetheamountsdueorpayable,thepriceorthevalueofanyfinancialinstrumentorfinancialcontract;or(iii)tomeasuretheperformanceofanyfinancialinstrumentincluding,withoutlimitation,forthepurposeoftrackingthereturnorperformanceofanyValueorofdefiningtheassetallocationofportfolioorofcomputingperformancefees.ByreceivingthisdocumentandtheInformationyouwillbedeemedtorepresentandwarranttoUBSthatyouwillnotusethisdocumentoranyoftheInformationforanyoftheabovepurposesorotherwiserelyuponthisdocumentoranyoftheInformation.UBShaspoliciesandprocedures,whichinclude,withoutlimitation,independencepoliciesandpermanentinformationbarriers,thatareintended,anduponwhichUBSrelies,tomanagepotentialconflictsofinterestandcontroltheflowofinformationwithindivisionsofUBSandamongitssubsidiaries,branchesandaffiliates.ForfurtherinformationonthewaysinwhichUBSmanagesconflictsandmaintainsindependenceofitsresearchproducts,historicalperformanceinformationandcertainadditionaldisclosuresconcerningUBSresearchrecommendations,pleasevisithttps://www.ubs.com/disclosures.Researchwillinitiate,updateandceasecoveragesolelyatthediscretionofUBSResearchManagement,whichwillalsohavesolediscretiononthetimingandfrequencyofanypublishedresearchproduct.Theanalysiscontainedinthisdocumentisbasedonnumerousassumptions.Allmaterialinformationinrelationtopublishedresearchreports,suchasvaluationmethodology,riskstatements,underlyingassumptions(includingsensitivityanalysisofthoseassumptions),ratingshistoryetc.asrequiredbytheMarketAbuseRegulation,canbefoundonUBSNeo.Differentassumptionscouldresultinmateriallydifferentresults.Theanalyst(s)responsibleforthepreparationofthisdocumentmayinteractwithtradingdeskpersonnel,salespersonnelandotherpartiesforthepurposeofgathering,applyingandinterpretingmarketinformation.UBSreliesoninformationbarrierstocontroltheflowofinformationcontainedinoneormoreareasChinahydrogensector8March2022ab33withinUBSintootherareas,units,groupsoraffiliatesofUBS.Thecompensationoftheanalystwhopreparedthisdocumentisdeterminedexclusivelybyresearchmanagementandseniormanagement(notincludinginvestmentbanking).Analystcompensationisnotbasedoninvestmentbankingrevenues;however,compensationmayrelatetotherevenuesofUBSand/oritsdivisionsasawhole,ofwhichinvestmentbanking,salesandtradingareapart,andUBS'ssubsidiaries,branchesandaffiliatesasawhole.ForfinancialinstrumentsadmittedtotradingonanEUregulatedmarket:UBSAG,itsaffiliatesorsubsidiaries(excludingUBSSecuritiesLLC)actsasamarketmakerorliquidityprovider(inaccordancewiththeinterpretationofthesetermsunderEnglishlawor,ifnotcarriedoutbyUBSintheUKthelawoftherelevantjurisdictioninwhichUBSdeterminesitcarriesouttheactivity)inthefinancialinstrumentsoftheissuersavethatwheretheactivityofliquidityprovideriscarriedoutinaccordancewiththedefinitiongiventoitbythelawsandregulationsofanyotherEUjurisdictions,suchinformationisseparatelydisclosedinthisdocument.Forfinancialinstrumentsadmittedtotradingonanon-EUregulatedmarket:UBSmayactasamarketmakersavethatwherethisactivityiscarriedoutintheUSinaccordancewiththedefinitiongiventoitbytherelevantlawsandregulations,suchactivitywillbespecificallydisclosedinthisdocument.UBSmayhaveissuedawarrantthevalueofwhichisbasedononeormoreofthefinancialinstrumentsreferredtointhedocument.UBSanditsaffiliatesandemployeesmayhavelongorshortpositions,tradeasprincipalandbuyandsellininstrumentsorderivativesidentifiedherein;suchtransactionsorpositionsmaybeinconsistentwiththeopinionsexpressedinthisdocument.Withinthepast12monthsUBSAG,itsaffiliatesorsubsidiariesmayhavereceivedorprovidedinvestmentservicesandactivitiesorancillaryservicesasperMiFIDIIwhichmayhavegivenrisetoapaymentorpromiseofapaymentinrelationtotheseservicesfromortothiscompany.UnitedKingdom:ThismaterialisdistributedbyUBSAG,LondonBranchtopersonswhoareeligiblecounterpartiesorprofessionalclients.UBSAG,LondonBranchisauthorisedbythePrudentialRegulationAuthorityandsubjecttoregulationbytheFinancialConductAuthorityandlimitedregulationbythePrudentialRegulationAuthority.Europe:Exceptasotherwisespecifiedherein,thesematerialsaredistributedbyUBSEuropeSE,asubsidiaryofUBSAG,topersonswhoareeligiblecounterpartiesorprofessionalclients(asdetailedintheBundesanstaltfurFinanzdienstleistungsaufsicht(BaFin)RulesandaccordingtoMIFID)andareonlyavailabletosuchpersons.Theinformationdoesnotapplyto,andshouldnotberelieduponby,retailclients.UBSEuropeSEisauthorisedbytheEuropeanCentralBank(ECB)andregulatedbytheBaFinandtheECB.Germany:WhereananalystofUBSEuropeSEhascontributedtothisdocument,thedocumentisalsodeemedtohavebeenpreparedbyUBSEuropeSE.InallcasesitisdistributedbyUBSEuropeSEandUBSAG,LondonBranch.Luxembourg,theNetherlands,BelgiumandIreland:WhereananalystofUBSEuropeSEhascontributedtothisdocument,thedocumentisalsodeemedtohavebeenpreparedbyUBSEuropeSE.InallcasesitisdistributedbyUBSEuropeSEandUBSAG,LondonBranch.Turkey:DistributedbyUBSAG,LondonBranch.Noinformationinthisdocumentisprovidedforthepurposeofoffering,marketingandsalebyanymeansofanycapitalmarketinstrumentsandservicesintheRepublicofTurkey.Therefore,thisdocumentmaynotbeconsideredasanoffermadeortobemadetoresidentsoftheRepublicofTurkey.UBSAG,LondonBranchisnotlicensedbytheTurkishCapitalMarketBoardundertheprovisionsoftheCapitalMarketLaw(LawNo.6362).Accordingly,neitherthisdocumentnoranyotherofferingmaterialrelatedtotheinstruments/servicesmaybeutilizedinconnectionwithprovidinganycapitalmarketservicestopersonswithintheRepublicofTurkeywithoutthepriorapprovaloftheCapitalMarketBoard.However,accordingtoarticle15(d)(ii)oftheDecreeNo.32,thereisnorestrictiononthepurchaseorsaleofthesecuritiesabroadbyresidentsoftheRepublicofTurkey.Poland:DistributedbyUBSEuropeSE(spolkazograniczonaodpowiedzialnoscia)OddzialwPolsceregulatedbythePolishFinancialSupervisionAuthority.WhereananalystofUBSEuropeSE(spolkazograniczonaodpowiedzialnoscia)OddzialwPolscehascontributedtothisdocument,thedocumentisalsodeemedtohavebeenpreparedbyUBSEuropeSE(spolkazograniczonaodpowiedzialnoscia)OddzialwPolsce.Russia:PreparedanddistributedbyUBSBank(OOO).ShouldnotbeconstruedasanindividualInvestmentRecommendationforthepurposeoftheRussianLaw-FederalLaw#39-FZONTHESECURITIESMARKETArticles6.1-6.2.Switzerland:DistributedbyUBSAGtopersonswhoareinstitutionalinvestorsonly.UBSAGisregulatedbytheSwissFinancialMarketSupervisoryAuthority(FINMA).Italy:PreparedbyUBSEuropeSEanddistributedbyUBSEuropeSEandUBSEuropeSE,ItalyBranch.WhereananalystofUBSEuropeSE,ItalyBranchhascontributedtothisdocument,thedocumentisalsodeemedtohavebeenpreparedbyUBSEuropeSE,ItalyBranch.France:PreparedbyUBSEuropeSEanddistributedbyUBSEuropeSEandUBSEuropeSE,FranceBranch.WhereananalystofUBSEuropeSE,FranceBranchhascontributedtothisdocument,thedocumentisalsodeemedtohavebeenpreparedbyUBSEuropeSE,FranceBranch.Spain:PreparedbyUBSEuropeSEanddistributedbyUBSEuropeSEandUBSEuropeSE,SpainBranch.WhereananalystofUBSEuropeSE,SpainBranchhascontributedtothisdocument,thedocumentisalsodeemedtohavebeenpreparedbyUBSEuropeSE,SpainBranch.Sweden:PreparedbyUBSEuropeSEanddistributedbyUBSEuropeSEandUBSEuropeSE,SwedenBranch.WhereananalystofUBSEuropeSE,SwedenBranchhascontributedtothisdocument,thedocumentisalsodeemedtohavebeenpreparedbyUBSEuropeSE,SwedenBranch.SouthAfrica:DistributedbyUBSSouthAfrica(Pty)Limited(RegistrationNo.1995/011140/07),anauthoriseduseroftheJSEandanauthorisedFinancialServicesProvider(FSP7328).SaudiArabia:ThisdocumenthasbeenissuedbyUBSAG(and/oranyofitssubsidiaries,branchesoraffiliates),apubliccompanylimitedbyshares,incorporatedinSwitzerlandwithitsregisteredofficesatAeschenvorstadt1,CH-4051BaselandBahnhofstrasse45,CH-8001Zurich.ThispublicationhasbeenapprovedbyUBSSaudiArabia(asubsidiaryofUBSAG),aSaudiclosedjointstockcompanyincorporatedintheKingdomofSaudiArabiaundercommercialregisternumber1010257812havingitsregisteredofficeatTatweerTowers,P.O.Box75724,Riyadh11588,KingdomofSaudiArabia.UBSSaudiArabiaisauthorizedandregulatedbytheCapitalMarketAuthoritytoconductsecuritiesbusinessunderlicensenumber08113-37.UAE/Dubai:TheinformationdistributedbyUBSAGDubaiBranchisonlyintendedforProfessionalClientsand/orMarketCounterparties,asclassifiedundertheDFSArulebook.Nootherpersonshouldactuponthismaterial/communication.TheinformationisnotforfurtherdistributionwithintheUnitedArabEmirates.UBSAGDubaiBranchisregulatedbytheDFSAintheDIFC.UBSisnotlicensedtoprovidebankingservicesintheUAEbytheCentralBankoftheUAE,norisitlicensedbytheUAESecuritiesandCommoditiesAuthority.Israel:ThisMaterialisdistributedbyUBSAG,LondonBranch.UBSSecuritiesIsraelLtdisalicensedInvestmentMarketerthatissupervisedbytheIsraelSecuritiesAuthority(ISA).UBSAG,LondonBranchanditsaffiliatesincorporatedoutsideIsraelarenotlicensedundertheIsraeliAdvisoryLaw.UBSmayengageamongothersinissuanceofFinancialAssetsorindistributionofFinancialAssetsofotherissuersforfeesorotherbenefits.UBSAG,LondonBranchanditsaffiliatesmayprefervariousFinancialAssetstowhichtheyhaveormayhaveanAffiliation(assuchtermisdefinedundertheIsraeliAdvisoryLaw).NothinginthisMaterialshouldbeconsideredasinvestmentadviceundertheIsraeliAdvisoryLaw.ThisMaterialisbeingissuedonlytoand/orisdirectedonlyatpersonswhoareEligibleClientswithinthemeaningoftheIsraeliAdvisoryLaw,andthisMaterialmustnotbefurnishedto,reliedonoracteduponbyanyotherpersons.UnitedStates:DistributedtoUSpersonsbyeitherUBSSecuritiesLLCorbyUBSFinancialServicesInc.,subsidiariesofUBSAG;orbyagroup,subsidiaryoraffiliateofUBSAGthatisnotregisteredasaUSbroker-dealer(a‘non-USaffiliate’)tomajorUSinstitutionalinvestorsonly.UBSSecuritiesLLCorUBSFinancialServicesInc.acceptsresponsibilityforthecontentofareportpreparedbyanothernon-USaffiliatewhendistributedtoUSpersonsbyUBSSecuritiesLLCorUBSFinancialServicesInc.AlltransactionsbyaUSpersoninthesecuritiesmentionedinthisreportmustbeeffectedthroughUBSSecuritiesLLCorUBSFinancialServicesInc.,andnotthroughanon-USaffiliate.UBSSecuritiesLLCisnotactingasamunicipaladvisortoanymunicipalentityorobligatedpersonwithinthemeaningofSection15BoftheSecuritiesExchangeAct(the"MunicipalAdvisorRule"),andtheopinionsorviewscontainedhereinarenotintendedtobe,anddonotconstitute,advicewithinthemeaningoftheMunicipalAdvisorRule.Canada:DistributedbyUBSSecuritiesCanadaInc.,aregisteredinvestmentdealerinCanadaandaMember-CanadianInvestorProtectionFund,orbyanotheraffiliateofUBSAGthatisregisteredtoconductbusinessinCanadaorisotherwiseexemptfromregistration.Brazil:Exceptasotherwisespecifiedherein,thisMaterialispreparedbyUBSBrasilCorretoradeCâmbio,TítuloseValoresMobiliáriosS.A.¹(UBSBrasilCCTVM)topersonswhoareeligibleinvestorsresidinginBrazil,whichareconsideredtobeProfessionalInvestors(InvestidoresProfissionais),asdesignatedbytheapplicableregulation,mainlytheCVMResolutionNo.30fromthe11thofMay2021(determinesthedutytoverifythesuitabilityofproducts,servicesandtransactionswithregardstotheclient´sprofile).¹UBSCCTVMisasubsidiaryofUBSBBServicosdeAssessoriaFinanceiraeParticipacoesS.A.(“UBSBB”).UBSBBisanassociationbetweenUBSAGandBancodoBrasil(throughitssubsidiaryBB–BancodeInvestimentosS.A.),ofwhichUBSAGisthemajorityownerandwhichprovidesinvestmentbankingservicesandcoverageinBrazil,Argentina,Paraguay,PeruandUruguay.HongKong:DistributedbyUBSSecuritiesAsiaLimited.PleasecontactlocallicensedpersonsofUBSSecuritiesAsiaLimitedinrespectofanymattersarisingfrom,orinconnectionwith,theanalysisordocumentSingapore:DistributedbyUBSSecuritiesPte.Ltd.[MCI(P)026/08/2021andCo.Reg.No.:198500648C]orUBSAG,SingaporeBranch.PleasecontactUBSSecuritiesPte.Ltd.,anexemptfinancialadviserundertheSingaporeFinancialAdvisersAct(Cap.110);orUBSAG,SingaporeBranch,anexemptfinancialadviserundertheSingaporeFinancialAdvisersAct(Cap.110)andawholesalebanklicensedundertheSingaporeBankingAct(Cap.19)regulatedbytheMonetaryAuthorityofSingapore,inrespectofanymattersarisingfrom,orinconnectionwith,theanalysisordocument.TherecipientsofthisdocumentrepresentandwarrantthattheyareaccreditedandinstitutionalinvestorsasdefinedintheSecuritiesandFuturesAct(Cap.289).Japan:DistributedbyUBSSecuritiesJapanCo.,Ltd.toprofessionalinvestors(exceptasotherwisepermitted).WherethisreporthasbeenpreparedbyUBSSecuritiesJapanCo.,Ltd.,UBSSecuritiesJapanCo.,Ltd.istheauthor,publisheranddistributorofthereport.DistributedbyUBSAG,TokyoBranchtoProfessionalInvestors(exceptasotherwisepermitted)inrelationtoforeignexchangeandotherbankingbusinesseswhenrelevant.Australia:ClientsofUBSAG:DistributedbyUBSAG(ABN47088129613andholderofAustralianFinancialServicesLicenseNo.231087).ClientsofUBSSecuritiesAustraliaLtd:DistributedbyUBSSecuritiesAustraliaLtd(ABN62008586481andholderofAustralianFinancialServicesLicenseNo.231098).ThisDocumentcontainsgeneralinformationand/orgeneraladviceonlyanddoesnotconstitutepersonalfinancialproductadvice.Assuch,theInformationinthisdocumenthasbeenpreparedwithouttakingintoaccountanyinvestor’sobjectives,financialsituationorneeds,andinvestorsshould,beforeactingontheInformation,considertheappropriatenessoftheInformation,havingregardtotheirobjectives,financialsituationandneeds.IftheInformationcontainedinthisdocumentrelatestotheacquisition,orpotentialacquisitionofaparticularfinancialproductbya‘Retail’clientasdefinedbysection761GoftheCorporationsAct2001whereaProductDisclosureStatementwouldberequired,theretailclientshouldobtainandconsidertheProductDisclosureStatementrelatingtotheproductbeforemakinganydecisionaboutwhethertoacquiretheproduct.NewZealand:DistributedbyUBSNewZealandLtd.UBSNewZealandLtdisnotaregisteredbankinNewZealand.YouarebeingprovidedwiththisUBSpublicationormaterialbecauseyouhaveindicatedtoUBSthatyouarea“wholesaleclient”withinthemeaningofsection5CoftheFinancialAdvisersAct2008ofNewZealand(PermittedClient).ThispublicationormaterialisnotintendedforclientswhoarenotPermittedClients(non-permittedClients).Ifyouareanon-permittedClientyoumustnotrelyonthispublicationormaterial.Ifdespitethiswarningyouneverthelessrelyonthispublicationormaterial,youhereby(i)acknowledgethatyoumaynotrelyonthecontentofthispublicationormaterialandthatanyrecommendationsoropinionsinsuchthispublicationormaterialarenotmadeorprovidedtoyou,and(ii)tothemaximumextentpermittedbylaw(a)indemnifyUBSanditsassociatesorrelatedentities(andtheirrespectiveDirectors,officers,agentsandAdvisors)(eacha‘RelevantPerson’)foranyloss,damage,liabilityorclaimanyofthemmayincurorsufferasaresultof,orinconnectionwith,yourunauthorisedrelianceonthispublicationormaterialand(b)waiveanyrightsorremediesyoumayhaveagainstanyRelevantPersonfor(orinrespectof)anyloss,damage,liabilityorclaimyoumayincurorsufferasaresultof,orinconnectionwith,yourunauthorisedrelianceonthispublicationormaterial.Korea:DistributedinKoreabyUBSSecuritiesPte.Ltd.,Chinahydrogensector8March2022ab34SeoulBranch.ThisreportmayhavebeeneditedorcontributedtofromtimetotimebyaffiliatesofUBSSecuritiesPte.Ltd.,SeoulBranch.Thismaterialisintendedforprofessional/institutionalclientsonlyandnotfordistributiontoanyretailclients.Malaysia:ThismaterialisauthorizedtobedistributedinMalaysiabyUBSSecuritiesMalaysiaSdn.Bhd(CapitalMarketsServicesLicenseNo.:CMSL/A0063/2007).Thismaterialisintendedforprofessional/institutionalclientsonlyandnotfordistributiontoanyretailclients.India:DistributedbyUBSSecuritiesIndiaPrivateLtd.(CorporateIdentityNumberU67120MH1996PTC097299)2/F,2NorthAvenue,MakerMaxity,BandraKurlaComplex,Bandra(East),Mumbai(India)400051.Phone:+912261556000.ItprovidesbrokerageservicesbearingSEBIRegistrationNumber:INZ000259830;merchantbankingservicesbearingSEBIRegistrationNumber:INM000010809andResearchAnalystservicesbearingSEBIRegistrationNumber:INH000001204.UBSAG,itsaffiliatesorsubsidiariesmayhavedebtholdingsorpositionsinthesubjectIndiancompany/companies.Withinthepast12months,UBSAG,itsaffiliatesorsubsidiariesmayhavereceivedcompensationfornon-investmentbankingsecurities-relatedservicesand/ornon-securitiesservicesfromthesubjectIndiancompany/companies.Thesubjectcompany/companiesmayhavebeenaclient/clientsofUBSAG,itsaffiliatesorsubsidiariesduringthe12monthsprecedingthedateofdistributionoftheresearchreportwithrespecttoinvestmentbankingand/ornon-investmentbankingsecurities-relatedservicesand/ornon-securitiesservices.Withregardtoinformationonassociates,pleaserefertotheAnnualReportat:http://www.ubs.com/global/en/about_ubs/investor_relations/annualreporting.htmlTaiwan:Exceptasotherwisespecifiedherein,thismaterialmaynotbedistributedinTaiwan.Informationandmaterialonsecurities/instrumentsthataretradedinaTaiwanorganizedexchangeisdeemedtobeissuedanddistributedbyUBSSecuritiesPte.LTD.,TaipeiBranch,whichislicensedandregulatedbyTaiwanFinancialSupervisoryCommission.Saveforsecurities/instrumentsthataretradedinaTaiwanorganizedexchange,thismaterialshouldnotconstitute"recommendation"toclientsorrecipientsinTaiwanforthecoveredcompaniesoranycompaniesmentionedinthisdocument.NoportionofthedocumentmaybereproducedorquotedbythepressoranyotherpersonwithoutauthorisationfromUBS.Indonesia:ThisreportisbeingdistributedbyPTUBSSekuritasIndonesiaandisdeliveredbyitslicensedemployee(s),includingmarketing/salesperson,toitsclient.PTUBSSekuritasIndonesia,havingitsregisteredofficeatSequisTowerLevel22unit22-1,Jl.Jend.Sudirman,kav.71,SCBDlot11B,Jakarta12190.Indonesia,isasubsidiarycompanyofUBSAGandlicensedunderCapitalMarketLawno.8year1995,aholderofbroker-dealerandunderwriterlicensesissuedbytheCapitalMarketandFinancialInstitutionSupervisoryAgency(nowOtoritasJasaKeuangan/OJK).PTUBSSekuritasIndonesiaisalsoamemberofIndonesiaStockExchangeandsupervisedbyOtoritasJasaKeuangan(OJK).NeitherthisreportnoranycopyhereofmaybedistributedinIndonesiaortoanyIndonesiancitizensexceptincompliancewithapplicableIndonesiancapitalmarketlawsandregulations.ThisreportisnotanofferofsecuritiesinIndonesiaandmaynotbedistributedwithintheterritoryoftheRepublicofIndonesiaortoIndonesiancitizensincircumstancewhichconstitutesanofferingwithinthemeaningofIndonesiancapitalmarketlawsandregulations.ThedisclosurescontainedinresearchdocumentsproducedbyUBSAG,LondonBranchorUBSEuropeSEshallbegovernedbyandconstruedinaccordancewithEnglishlaw.UBSspecificallyprohibitstheredistributionofthisdocumentinwholeorinpartwithoutthewrittenpermissionofUBSandinanyeventUBSacceptsnoliabilitywhatsoeverforanyredistributionofthisdocumentoritscontentsortheactionsofthirdpartiesinthisrespect.Imagesmaydepictobjectsorelementsthat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thepriceorthevalueofanyfinancialinstrumentorfinancialcontract;or(iii)tomeasuretheperformanceofanyfinancialinstrumentincluding,withoutlimitation,forthepurposeoftrackingthereturnorperformanceofanyValueorofdefiningtheassetallocationofportfolioorofcomputingperformancefees.ByreceivingthisdocumentandtheInformationyouwillbedeemedtorepresentandwarranttoUBSthatyouwillnotusethisdocumentoranyoftheInformationforanyoftheabovepurposesorotherwiserelyuponthisdocumentoranyoftheInformation.UBShaspoliciesandprocedures,whichinclude,withoutlimitation,independencepoliciesandpermanentinformationbarriers,thatareintended,anduponwhichUBSrelies,tomanagepotentialconflictsofinterestandcontroltheflowofinformationwithindivisionsofUBS(includingbetweenGlobalWealthManagementandUBSGlobalResearch)andamongitssubsidiaries,branchesandaffiliates.ForfurtherinformationonthewaysinwhichUBSmanagesconflictsandmaintainsindependenceofitsresearchproducts,historicalperformanceinformationandcertainadditionaldisclosuresconcerningUBSresearchrecommendations,pleasevisithttps://www.ubs.com/disclosures.Researchwillinitiate,updateandceasecoveragesolelyatthediscretionofresearchmanagement,whichwillalsohavesolediscretiononthetimingandfrequencyofanypublishedresearchproduct.Theanalysiscontainedinthisdocumentisbasedonnumerousassumptions.Differentassumptionscouldresultinmateriallydifferentresults.Theanalyst(s)responsibleforthepreparationofthisdocumentmayinteractwithtradingdeskpersonnel,salespersonnelandotherpartiesforthepurposeofgathering,applyingandinterpretingmarketinformation.UBSreliesoninformationbarrierstocontroltheflowofinformationcontainedinoneormoreareaswithinUBSintootherareas,units,groupsoraffiliatesofUBS.Thecompensationoftheanalystwhopreparedthisdocumentisdeterminedexclusivelybyresearchmanagementandseniormanagement(notincludinginvestmentbanking).Analystcompensationisnotbasedoninvestmentbankingrevenues;however,compensationmayrelatetotherevenuesofUBSand/oritsdivisionsasawhole,ofwhichinvestmentbanking,salesandtradingareapart,andUBS'ssubsidiaries,branchesandaffiliatesasawhole.Chinahydrogensector8March2022ab35ForfinancialinstrumentsadmittedtotradingonanEUregulatedmarket:UBSAG,itsaffiliatesorsubsidiaries(excludingUBSSecuritiesLLC)actsasamarketmakerorliquidityprovider(inaccordancewiththeinterpretationofthesetermsintheUK)inthefinancialinstrumentsoftheissuersavethatwheretheactivityofliquidityprovideriscarriedoutinaccordancewiththedefinitiongiventoitbythelawsandregulationsofanyotherEUjurisdictions,suchinformationisseparatelydisclosedinthisdocument.Forfinancialinstrumentsadmittedtotradingonanon-EUregulatedmarket:UBSmayactasamarketmakersavethatwherethisactivityiscarriedoutintheUSinaccordancewiththedefinitiongiventoitbytherelevantlawsandregulations,suchactivitywillbespecificallydisclosedinthisdocument.UBSmayhaveissuedawarrantthevalueofwhichisbasedononeormoreofthefinancialinstrumentsreferredtointhedocument.UBSanditsaffiliatesandemployeesmayhavelongorshortpositions,tradeasprincipalandbuyandsellininstrumentsorderivativesidentifiedherein;suchtransactionsorpositionsmaybeinconsistentwiththeopinionsexpressedinthisdocument.Optionsandfuturesarenotsuitableforallinvestors,andtradingintheseinstrumentsisconsideredriskyandmaybeappropriateonlyforsophisticatedinvestors.Priortobuyingorsellinganoption,andforthecompleterisksrelatingtooptions,youmustreceiveacopyof"CharacteristicsandRisksofStandardizedOptions".Youmayreadthedocumentathttps://www.theocc.com/about/publications/character-risks.jsporaskyourfinancialadvisorforacopy.Investinginstructuredinvestmentsinvolvessignificantrisks.Foradetaileddiscussionoftherisksinvolvedininvestinginanyparticularstructuredinvestment,youmustreadtherelevantofferingmaterialsforthatinvestment.Structuredinvestmentsareunsecuredobligationsofaparticularissuerwithreturnslinkedtotheperformanceofanunderlyingasset.Dependingonthetermsoftheinvestment,investorscouldloseallorasubstantialportionoftheirinvestmentbasedontheperformanceoftheunderlyingasset.Investorscouldalsolosetheirentireinvestmentiftheissuerbecomesinsolvent.UBSFinancialServicesInc.doesnotguaranteeinanywaytheobligationsorthefinancialconditionofanyissuerortheaccuracyofanyfinancialinformationprovidedbyanyissuer.Structuredinvestmentsarenottraditionalinvestmentsandinvestinginastructuredinvestmentisnotequivalenttoinvestingdirectlyintheunderlyingasset.Structuredinvestmentsmayhavelimitedornoliquidity,andinvestorsshouldbepreparedtoholdtheirinvestmenttomaturity.Thereturnofstructuredinvestmentsmaybelimitedbyamaximumgain,participationrateorotherfeature.Structuredinvestmentsmayincludecallfeaturesand,ifastructuredinvestmentiscalledearly,investorswouldnotearnanyfurtherreturnandmaynotbeabletoreinvestinsimilarinvestmentswithsimilarterms.Structuredinvestmentsincludecostsandfeeswhicharegenerallyembeddedinthepriceoftheinvestment.Thetaxtreatmentofastructuredinvestmentmaybecomplexandmaydifferfromadirectinvestmentintheunderlyingasset.UBSFinancialServicesInc.anditsemployeesdonotprovidetaxadvice.Investorsshouldconsulttheirowntaxadvisorabouttheirowntaxsituationbeforeinvestinginanysecurities.ImportantInformationAboutSustainableInvestingStrategies:Sustainableinvestingstrategiesaimtoconsiderandincorporateenvironmental,socialandgovernance(ESG)factorsintoinvestmentprocessandportfolioconstruction.StrategiesacrossgeographiesandstylesapproachESGanalysisandincorporatethefindingsinavarietyofways.IncorporatingESGfactorsorSustainableInvestingconsiderationsmayinhibittheportfoliomanager’sabilitytoparticipateincertaininvestmentopportunitiesthatotherwisewouldbeconsistentwithitsinvestmentobjectiveandotherprincipalinvestmentstrategies.ThereturnsonaportfolioconsistingprimarilyofsustainableinvestmentsmaybelowerorhigherthanportfolioswhereESGfactors,exclusions,orothersustainabilityissuesarenotconsideredbytheportfoliomanager,andtheinvestmentopportunitiesavailabletosuchportfoliosmaydiffer.CompaniesmaynotnecessarilymeethighperformancestandardsonallaspectsofESGorsustainableinvestingissues;thereisalsonoguaranteethatanycompanywillmeetexpectationsinconnectionwithcorporateresponsibility,sustainability,and/orimpactperformance.Withinthepast12monthsUBSSwitzerlandAG,itsaffiliatesorsubsidiariesmayhavereceivedorprovidedinvestmentservicesandactivitiesorancillaryservicesasperMiFIDIIwhichmayhavegivenrisetoapaymentorpromiseofapaymentinrelationtotheseservicesfromortothiscompany.IfyourequiredetailedinformationondisclosuresofinterestorconflictofinterestasrequiredbyMarketAbuseRegulationpleasecontactthemailboxMAR_disclosures_twopager@ubs.com.Pleasenotethate-mailcommunicationisunsecured.ExternalAssetManagers/ExternalFinancialConsultants:IncasethisresearchorpublicationisprovidedtoanExternalAssetManageroranExternalFinancialConsultant,UBSexpresslyprohibitsthatitisredistributedbytheExternalAssetManagerortheExternalFinancialConsultantandismadeavailabletotheirclientsand/orthirdparties.Austria:ThispublicationisnotintendedtoconstituteapublicofferunderAustrianlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,NiederlassungÖsterreich,withplaceofbusinessatWächtergasse1,A-1010Wien.UBSEuropeSE,NiederlassungÖsterreichissubjecttothejointsupervisionoftheEuropeanCentralBank("ECB"),theGermanCentralBank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheAustrianFinancialMarketAuthority(Finanzmarktaufsicht,FMA),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheECB.Bahrain:UBSisaSwissbanknotlicensed,supervisedorregulatedinBahrainbytheCentralBankofBahraintoundertakebankingorinvestmentbusinessactivitiesinBahrain.Therefore,prospects/clientsdonothaveanyprotectionunderlocalbankingandinvestmentserviceslawsandregulations.Brazil:ThisreportisonlyintendedforBrazilianresidentswhoaredirectlypurchasingorsellingsecuritiesintheBrazilcapitalmarketthroughalocalauthorizedinstitution.Canada:Theinformationcontainedhereinisnot,andundernocircumstancesistobeconstruedas,aprospectus,anadvertisement,apublicoffering,anoffertosellsecuritiesdescribedherein,solicitationofanoffertobuysecuritiesdescribedherein,inCanadaoranyprovinceorterritorythereof.AnyofferorsaleofthesecuritiesdescribedhereininCanadawillbemadeonlyunderanexemptionfromtherequirementstofileaprospectuswiththerelevantCanadiansecuritiesregulatorsandonlybyadealerproperlyregisteredunderapplicablesecuritieslawsor,alternatively,pursuanttoanexemptionfromthedealerregistrationrequirementintherelevantprovinceorterritoryofCanadainwhichsuchofferorsaleismade.UndernocircumstancesistheinformationcontainedhereintobeconstruedasinvestmentadviceinanyprovinceorterritoryofCanadaandisnottailoredtotheneedsoftherecipient.Totheextentthattheinformationcontainedhereinreferencessecuritiesofanissuerincorporated,formedorcreatedunderthelawsofCanadaoraprovinceorterritoryofCanada,anytradesinsuchsecuritiesmustbeconductedthroughadealerregisteredinCanadaor,alternatively,pursuanttoadealerregistrationexemption.NosecuritiescommissionorsimilarregulatoryauthorityinCanadahasreviewedorinanywaypasseduponthesematerials,theinformationcontainedhereinorthemeritsofthesecuritiesdescribedhereinandanyrepresentationtothecontraryisanoffence.InCanada,thispublicationisdistributedbyUBSInvestmentManagementCanadaInc.China:ThisreportispreparedbyUBSSwitzerlandAGoritsoffshoresubsidiaryoraffiliate(collectivelyas"UBSOffshore").UBSOffshoreisanentityincorporatedoutofChinaandisnotlicensed,supervisedorregulatedinChinatocarryoutbankingorsecuritiesbusiness.TherecipientshouldnotcontacttheanalystsorUBSOffshorewhichproducedthisreportforadviceastheyarenotlicensedtoprovidesecuritiesinvestmentadviceinChina.UBSInvestmentBank(includingResearch)hasitsownwhollyindependentresearchandviewswhichattimesmayvaryfromtheviewsofUBSGlobalWealthManagement.TherecipientshouldnotusethisdocumentorotherwiserelyonanyoftheinformationcontainedinthisreportinmakinginvestmentdecisionsandUBStakesnoresponsibilityinthisregard.CzechRepublic:UBSisnotalicensedbankintheCzechRepublicandthusisnotallowedtoprovideregulatedbankingorinvestmentservicesintheCzechRepublic.Thiscommunicationand/ormaterialisdistributedformarketingpurposesandconstitutesa"CommercialMessage"underthelawsofCzechRepublicinrelationtobankingand/orinvestmentservices.PleasenotifyUBSifyoudonotwishtoreceiveanyfurthercorrespondence.Denmark:ThispublicationisnotintendedtoconstituteapublicofferunderDanishlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,DenmarkBranch,filialafUBSEuropeSE,withplaceofbusinessatSanktAnnaePlads13,1250Copenhagen,Denmark,registeredwiththeDanishCommerceandCompaniesAgency,underNo.38172433.UBSEuropeSE,DenmarkBranch,filialafUBSEuropeSEissubjecttothejointsupervisionoftheEuropeanCentralBank("ECB"),theGermanCentralBank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheDanishFinancialSupervisoryAuthority(Finanstilsynet),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheECB.Egypt:SecuritiesorotherinvestmentproductsarenotbeingofferedorsoldbyUBStothepublicinEgyptandtheyhavenotbeenandwillnotberegisteredwiththeEgyptianFinancialRegulatoryAuthority(FRA).France:ThispublicationisnotintendedtoconstituteapublicofferunderFrenchlaw,itdoesnotconstituteapersonalrecommendationasitisdistributedonlyforinformationpurposestoclientsofUBS(France)S.A.,French"sociétéanonyme"withsharecapitalof€132.975.556,at69boulevardHaussmannF-75008Paris,registeredwiththe“RegistreduCommerceetdesSociétés”ofParisunderN°B421255670.UBS(France)S.A.isaproviderofinvestmentservicesdulyauthorizedaccordingtothetermsofthe"Codemonétaireetfinancier",regulatedbyFrenchbankingandfinancialauthoritiesasthe"Autoritédecontrôleprudentieletderésolution"and"Autoritédesmarchésfinanciers”,towhichthispublicationhasnotbeensubmittedforapproval.Germany:ThispublicationisnotintendedtoconstituteapublicofferunderGermanlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,Germany,withplaceofbusinessatBockenheimerLandstrasse2-4,60306FrankfurtamMain.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheEuropeanCentralBank("ECB"),andsupervisedbytheECB,theGermanCentralBank(DeutscheBundesbank)andtheGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),towhichthispublicationhasnotbeensubmittedforapproval.Greece:UBSAGanditssubsidiariesandaffiliates(UBS)arepremierglobalfinancialservicesfirmsofferingwealthmanagementservicestoindividual,corporateandinstitutionalinvestors.UBSAGandUBSSwitzerlandAGareestablishedinSwitzerlandandoperateunderSwisslaw.UBSoperatesinover50countriesandfromallmajorfinancialcenters.UBSisnotlicensedasabankorfinancialinstitutionunderGreeklegislationanddoesnotprovidebanking,norfinancialservicesinGreece.Consequently,UBSprovidessuchservicesfrombranchesoutsideofGreece,only.Noinformationinthisdocumentisprovidedforthepurposeofoffering,marketingandsalebyanymeansofanycapitalmarketinstrumentsandservicesinGreece.Therefore,thisdocumentmaynotbeconsideredasapublicofferingmadeortobemadetoresidentsofGreece.HongKongSAR:ThispublicationisdistributedtoclientsofUBSAGHongKongBranchbyUBSAGHongKongBranch,alicensedbankundertheHongKongBankingOrdinanceandaregisteredinstitutionundertheSecuritiesandFuturesOrdinance.UBSAGHongKongBranchisincorporatedinSwitzerlandwithlimitedliability.India:UBSSecuritiesIndiaPrivateLtd.(CorporateIdentityNumberU67120MH1996PTC097299)2/F,2NorthAvenue,MakerMaxity,BandraKurlaComplex,Bandra(East),Mumbai(India)400051.Phone:+912261556000.ItprovidesbrokerageservicesbearingSEBIRegistrationNumberINZ000259830;merchantbankingservicesbearingSEBIRegistrationNumber:INM000010809andResearchAnalystservicesbearingSEBIRegistrationNumber:INH000001204.UBSAG,itsaffiliatesorsubsidiariesmayhavedebtholdingsorpositionsinthesubjectIndiancompany/companies.Withinthepast12months,UBSAG,itsaffiliatesorsubsidiariesmayhavereceivedcompensationfornon-investmentbankingsecurities-relatedservicesand/ornon-securitiesservicesfromthesubjectIndiancompany/companies.Thesubjectcompany/companiesmayhavebeenaclient/clientsofUBSAG,itsaffiliatesorsubsidiariesduringthe12monthsprecedingthedateofdistributionoftheresearchreportwithrespecttoinvestmentbankingand/ornon-investmentbankingsecurities-relatedservicesand/ornon-securitiesservices.Withregardtoinformationonassociates,pleaserefertotheAnnualReportat:http://www.ubs.com/global/en/about_ubs/investor_relations/annualreporting.html.Indonesia:ThismaterialwasprovidedtoyouasaresultofChinahydrogensector8March2022ab36arequestreceivedbyUBSfromyouand/orpersonsentitledtomaketherequestonyourbehalf.Shouldyouhavereceivedthematerialerroneously,UBSasksthatyoukindlydestroy/deleteitandinformUBSimmediately.Anyandalladviceprovidedand/ortradesexecutedbyUBSpursuanttothematerialwillonlyhavebeenprovideduponyourspecificrequestorexecuteduponyourspecificinstructions,asthecasemaybe,andmaybedeemedassuchbyUBSandyou.Thematerialmaynothavebeenreviewed,approved,disapprovedorendorsedbyanyfinancialorregulatoryauthorityinyourjurisdiction.Therelevantinvestmentswillbesubjecttorestrictionsandobligationsontransferassetforthinthematerial,andbyreceivingthematerialyouundertaketocomplyfullywithsuchrestrictionsandobligations.Youshouldcarefullystudyandensurethatyouunderstandandexerciseduecareanddiscretioninconsideringyourinvestmentobjective,riskappetiteandpersonalcircumstancesagainsttheriskoftheinvestment.Youareadvisedtoseekindependentprofessionaladviceincaseofdoubt.Israel:UBSisapremierglobalfinancialfirmofferingwealthmanagement,assetmanagementandinvestmentbankingservicesfromitsheadquartersinSwitzerlandanditsoperationsinover50countriesworldwidetoindividual,corporateandinstitutionalinvestors.InIsrael,UBSSwitzerlandAGisregisteredasForeignDealerincooperationwithUBSWealthManagementIsraelLtd.,awhollyownedUBSsubsidiary.UBSWealthManagementIsraelLtd.isaPortfolioManagerlicenseewhichengagesalsoinInvestmentMarketingandisregulatedbytheIsraelSecuritiesAuthority.Thispublicationisintendedforinformationonlyandisnotintendedasanoffertobuyorsolicitationofanoffer.Furthermore,thispublicationisnotintendedasaninvestmentadviceand/orinvestmentmarketingandisnotreplacinganyinvestmentadviceand/orinvestmentmarketingprovidedbytherelevantlicenseewhichisadjustedtoeachpersonneeds.Noactionhasbeen,orwillbe,takeninIsraelthatwouldpermitanofferingoftheproduct(s)mentionedinthisdocumentoradistributionofthisdocumenttothepublicinIsrael.Inparticular,thisdocumenthasnotbeenreviewedorapprovedbytheIsraeliSecuritiesAuthority.Theproduct(s)mentionedinthisdocumentis/arebeingofferedtoalimitednumberofsophisticatedinvestorswhoqualifyasoneoftheinvestorslistedinthefirstsupplementtotheIsraeliSecuritiesLaw,5728-1968.Thisdocumentmaynotbereproducedorusedforanyotherpurpose,norbefurnishedtoanyotherpersonotherthanthosetowhomcopieshavebeensent.Anyonewhopurchasestheproduct(s)mentionedhereinshalldosoforitsownbenefitandforitsownaccountandnotwiththeaimorintentionofdistributingorofferingtheproduct(s)tootherparties.Anyonewhopurchasestheproduct(s)shalldosoinaccordancewithitsownunderstandinganddiscretionandafterithasreceivedanyrelevantfinancial,legal,business,taxorotheradviceoropinionrequiredbyitinconnectionwithsuchpurchase(s).Theword"advice"and/oranyofitsderivativesshallbereadandconstruedinconjunctionwiththedefinitionoftheterm"investmentmarketing"asdefinedundertheIsraeliRegulationofInvestmentAdvice,InvestmentMarketingandPortfolioManagementLaw,1995.TheSwisslawsandregulationsrequireanumberofmandatorydisclosurestobemadeinindependentfinancialresearchreportsorrecommendations.PursuanttotheSwissFinancialMarketInfrastructureActandtheFinancialMarketInfrastructureOrdinance-FINMA,banksmustdisclosethepercentageofvotingrightstheyholdincompaniesbeingresearched,iftheseholdingsareequaltoorexceedthestatutorythresholds.Inaddition,theDirectivesontheIndependenceofFinancialResearch,issuedbytheSwissBankersAssociation,mandateanumberofdisclosures,includingthedisclosureofpotentialconflictsofinterest,theparticipationwithinprevious12monthsinanysecuritiesissuesonbehalfofthecompanybeingresearched,aswellasthefactthatremunerationpaidtothefinancialanalystsisbasedgenerallyupontheperformanceof(i)thenewissuesdepartmentorinvestmentbanking;or(ii)securitiestradingperformance(includingproprietarytrading)orsales.Italy:ThispublicationisnotintendedtoconstituteapublicofferunderItalianlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,SuccursaleItalia,withplaceofbusinessatViadelVecchioPolitecnico,3-20121Milano.UBSEuropeSE,SuccursaleItaliaissubjecttothejointsupervisionoftheEuropeanCentralBank("ECB"),theGermanCentralBank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheBankofItaly(Bancad’Italia)andtheItalianFinancialMarketsSupervisoryAuthority(CONSOB-CommissioneNazionaleperleSocietàelaBorsa),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheECB.Jersey:UBSAG,JerseyBranch,isregulatedandauthorizedbytheJerseyFinancialServicesCommissionfortheconductofbanking,fundsandinvestmentbusiness.WhereservicesareprovidedfromoutsideJersey,theywillnotbecoveredbytheJerseyregulatoryregime.UBSAG,JerseyBranchisabranchofUBSAGapubliccompanylimitedbyshares,incorporatedinSwitzerlandwhoseregisteredofficesareatAeschenvorstadt1,CH-4051BaselandBahnhofstrasse45,CH8001Zurich.UBSAG,JerseyBranch'sprincipalplaceofbusinessis1,IFCJersey,StHelier,Jersey,JE23BX.Luxembourg:ThispublicationisnotintendedtoconstituteapublicofferunderLuxembourglaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,LuxembourgBranch("UBSLUX"),R.C.S.Luxembourgn°B209123,withregisteredofficeat33A,AvenueJ.F.Kennedy,L-1855Luxembourg.UBSLUXisabranchofUBSEuropeSE,acreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea(HRBn°107046),withregisteredofficeatBockenheimerLandstrasse2-4,D-60306FrankfurtamMain,Germany,dulyauthorizedbytheGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht–"BaFin")andsubjecttothejointprudentialsupervisionofBaFin,thecentralbankofGermany(DeutscheBundesbank)andtheEuropeanCentralBank.UBSLUXisfurthermoresupervisedbytheLuxembourgprudentialsupervisoryauthority(CommissiondeSurveillanceduSecteurFinancier),initsroleashostmemberstateauthority.Thispublicationhasnotbeensubmittedforapprovaltoanypublicsupervisoryauthority.Malaysia:ThismaterialwasprovidedtoyouasaresultofarequestreceivedbyUBSfromyouand/orpersonsentitledtomaketherequestonyourbehalf.Shouldyouhavereceivedthematerialerroneously,UBSasksthatyoukindlydestroy/deleteitandinformUBSimmediately.Anyandalladviceprovidedand/ortradesexecutedbyUBSpursuanttothematerialwillonlyhavebeenprovideduponyourspecificrequestorexecuteduponyourspecificinstructions,asthecasemaybe,andmaybedeemedassuchbyUBSandyou.Thematerialmaynothavebeenreviewed,approved,disapprovedorendorsedbyanyfinancialorregulatoryauthorityinyourjurisdiction.Therelevantinvestmentswillbesubjecttorestrictionsandobligationsontransferassetforthinthematerial,andbyreceivingthematerialyouundertaketocomplyfullywithsuchrestrictionsandobligations.Youshouldcarefullystudyandensurethatyouunderstandandexerciseduecareanddiscretioninconsideringyourinvestmentobjective,riskappetiteandpersonalcircumstancesagainsttheriskoftheinvestment.Youareadvisedtoseekindependentprofessionaladviceincaseofdoubt.Mexico:ThisinformationisdistributedbyUBSAsesoresMéxico,S.A.deC.V.("UBSAsesores"),anaffiliateofUBSSwitzerlandAG,incorporatedasanon-independentinvestmentadvisorundertheMexicanregulationduetotherelationwithaForeignBank.UBSAsesoresisregisteredundernumber30060-001-(14115)-21/06/2016andsubjecttothesupervisionoftheMexicanBankingandSecuritiesCommission("CNBV")exclusivelyregardingtherenderingof(i)portfoliomanagementservices,(ii)securitiesinvestmentadvisoryservices,analysisandissuanceofindividualinvestmentrecommendations,and(iii)anti-moneylaunderingandterrorismfinancingmatters.ThisUBSpublicationoranymaterialrelatedtheretoisaddressedonlytoSophisticatedorInstitutionalInvestorslocatedinMexico.Researchreportsonlyreflecttheviewsoftheanalystsresponsibleforthereport.Thecompensationoftheanalyst(s)whopreparedthisreportisdeterminedexclusivelybyresearchmanagementandseniormanagementofanyentityofUBSGrouptowhichsuchanalyst(s)renderservices.Nigeria:UBSAGanditsbranchesandsubsidiaries(UBS)arenotlicensed,supervisedorregulatedinNigeriabytheCentralBankofNigeriaortheNigerianSecuritiesandExchangeCommission(SEC)anddonotundertakebankingorinvestmentbusinessactivitiesinNigeria.TheinvestmentproductsmentionedinthismaterialarenotbeingofferedorsoldbyUBStothepublicinNigeriaandtheyhavenotbeensubmittedforapprovalnorregisteredwiththeNigerianSEC.Ifyouareinterestedinproductsofthisnature,pleaseletusknowandwewilldirectyoutosomeonewhocanadviseyou.Theinvestmentproductsmentionedinthismaterialarenotbeingdirectedto,andarenotbeingmadeavailableforsubscriptionbyanypersonswithinNigeriaotherthantheselectedinvestorstowhomtheoffermaterialshavebeenaddressedasaprivatesaleordomesticconcernwithintheexemptionandmeaningofSection69(2)oftheInvestmentsandSecuritiesAct,2007(ISA).AnymaterialrelatingtoCollectiveInvestmentSchemeshasbeenprovidedtoyouatyourspecificunsolicitedrequestandforyourinformationonly.TheinvestmentproductsmentionedinsuchmaterialarenotbeingofferedormadeavailableforsalebyUBSinNigeriaandtheyhavenotbeensubmittedforapprovalnorregisteredwiththeNigerianSEC.Philippines:ThismaterialwasprovidedtoyouasaresultofarequestreceivedbyUBSfromyouand/orpersonsentitledtomaketherequestonyourbehalf.Shouldyouhavereceivedthematerialerroneously,UBSasksthatyoukindlydestroy/deleteitandinformUBSimmediately.Anyandalladviceprovidedand/ortradesexecutedbyUBSpursuanttothematerialwillonlyhavebeenprovideduponyourspecificrequestorexecuteduponyourspecificinstructions,asthecasemaybe,andmaybedeemedassuchbyUBSandyou.Thematerialmaynothavebeenreviewed,approved,disapprovedorendorsedbyanyfinancialorregulatoryauthorityinyourjurisdiction.Therelevantinvestmentswillbesubjecttorestrictionsandobligationsontransferassetforthinthematerial,andbyreceivingthematerialyouundertaketocomplyfullywithsuchrestrictionsandobligations.Youshouldcarefullystudyandensurethatyouunderstandandexerciseduecareanddiscretioninconsideringyourinvestmentobjective,riskappetiteandpersonalcircumstancesagainsttheriskoftheinvestment.Youareadvisedtoseekindependentprofessionaladviceincaseofdoubt.Poland:UBSisapremierglobalfinancialservicesfirmofferingwealthmanagementservicestoindividual,corporateandinstitutionalinvestors.UBSisestablishedinSwitzerlandandoperatesunderSwisslawandinover50countriesandfromallmajorfinancialcentres.UBSSwitzerlandAGisnotlicensedasabankorasaninvestmentfirmunderPolishlegislationandisnotpermittedtoprovidebankingandfinancialservicesinPoland.Portugal:UBSSwitzerlandAGisnotlicensedtoconductbankingandfinancialactivitiesinPortugalnorisUBSSwitzerlandAGsupervisedbytheportugueseregulators(BankofPortugal"BancodePortugal"andPortugueseSecuritiesExchangeCommission"ComissãodoMercadodeValoresMobiliários").Qatar:UBSQatarLLCisauthorizedbytheQatarFinancialCentreRegulatoryAuthority,withQFCno.01169,andhasitsregisteredofficeat14thFloor,BurjAlfardanTower,Building157,StreetNo.301,AreaNo.69,AlMajdami,Lusail,Qatar.UBSQatarLLCneitheroffersanybrokerageservicesnorexecutesanyorderwith,fororonbehalfofitsclients.Aclientorderwillhavetobeplacedwith,andexecutedby,UBSSwitzerlandAGinSwitzerlandoranaffiliateofUBSSwitzerlandAG,thatisdomiciledoutsideQatar.ItisinthesolediscretionofUBSSwitzerlandAGinSwitzerlandoritsaffiliatetoacceptorrejectanorderandUBSQatarLLCdoesnothaveauthoritytoprovideaconfirmationinthisrespect.UBSQatarLLCmayhowevercommunicatepaymentordersandinvestmentinstructionstoUBSSwitzerlandAGinSwitzerlandforreceipt,acceptanceandexecution.UBSQatarLLCisnotauthorizedtoactforandonbehalfofUBSSwitzerlandAGoranaffiliateofUBSSwitzerlandAG.Thisdocumentandanyattachmentsheretoareintendedforeligiblecounterpartiesandbusinesscustomersonly.Russia:Thisdocumentorinformationcontainedthereinisforinformationpurposesonlyandconstitutesneitherapublicnoraprivateoffering,isnotaninvitationtomakeoffers,tosell,exchangeorotherwisetransferanyfinancialinstrumentsintheRussianFederationtoorforthebenefitofanyRussianpersonorentityanddoesnotconstituteanadvertisementorofferingofsecuritiesintheRussianFederationwithinthemeaningofRussiansecuritieslaws.Theinformationcontainedhereinisnotan“individualinvestmentrecommendation”asdefinedinFederalLawof22April1996No39-FZ"OnSecuritiesMarket"(asamended)andthefinancialinstrumentsandoperationsspecifiedhereinmaynotbesuitableforyourinvestmentprofileoryourinvestmentgoalsorexpectations.Thedeterminationofwhetherornotsuchfinancialinstrumentsandoperationsareinyourinterestsoraresuitableforyourinvestmentgoals,investmenthorizonortheacceptablerisklevelisyourresponsibility.Weassumenoliabilityforanylossesconnectedwithmakinganysuchoperationsorinvestingintoanysuchfinancialinstrumentsandwedonotrecommendtousesuchinformationastheonlysourceofinformationformakinganinvestmentdecision.SaudiArabia:UBSSaudiArabiaisauthorisedandregulatedbytheCapitalMarketAuthoritytoconductsecuritiesbusinessunderlicencenumber08113-37.Singapore:ThismaterialwasprovidedtoyouasaresultofarequestreceivedbyUBSfromyouand/orpersonsentitledtomaketherequestonyourbehalf.Shouldyouhavereceivedthematerialerroneously,UBSasksthatyoukindlydestroy/deleteitandinformUBSimmediately.ClientsofUBSAGSingaporebranchareaskedtopleasecontactUBSAGSingaporebranch,anexemptfinancialadviserundertheSingaporeFinancialAdvisersAct(Cap.110)andawholesalebanklicensedundertheSingaporeBankingAct(Cap.19)regulatedbytheMonetaryAuthorityChinahydrogensector8March2022ab37ofSingapore,inrespectofanymattersarisingfrom,orinconnectionwith,theanalysisorreport.UBSAGisincorporatedinSwitzerlandwithlimitedliability.UBSAGhasabranchregisteredinSingapore(UENS98FC5560C).Spain:ThispublicationisnotintendedtoconstituteapublicofferunderSpanishlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,SucursalenEspaña,withplaceofbusinessatCalleMaríadeMolina4,C.P.28006,Madrid.UBSEuropeSE,SucursalenEspañaissubjecttothejointsupervisionoftheEuropeanCentralBank("ECB"),theGermanCentralbank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheSpanishsupervisoryauthority(BancodeEspaña),towhichthispublicationhasnotbeensubmittedforapproval.Additionallyitisauthorizedtoprovideinvestmentservicesonsecuritiesandfinancialinstruments,regardingwhichitissupervisedbytheComisiónNacionaldelMercadodeValoresaswell.UBSEuropeSE,SucursalenEspañaisabranchofUBSEuropeSE,acreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheECB.Sweden:ThispublicationisnotintendedtoconstituteapublicofferunderSwedishlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,SwedenBankfilial,withplaceofbusinessatRegeringsgatan38,11153Stockholm,Sweden,registeredwiththeSwedishCompaniesRegistrationOfficeunderReg.No516406-1011.UBSEuropeSE,SwedenBankfilialissubjecttothejointsupervisionoftheEuropeanCentralBank("ECB"),theGermanCentralbank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheSwedishsupervisoryauthority(Finansinspektionen),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheECB.Taiwan:ThismaterialisprovidedbyUBSAG,TaipeiBranchinaccordancewithlawsofTaiwan,inagreementwithorattherequestofclients/prospects.Thailand:ThismaterialwasprovidedtoyouasaresultofarequestreceivedbyUBSfromyouand/orpersonsentitledtomaketherequestonyourbehalf.Shouldyouhavereceivedthematerialerroneously,UBSasksthatyoukindlydestroy/deleteitandinformUBSimmediately.Anyandalladviceprovidedand/ortradesexecutedbyUBSpursuanttothematerialwillonlyhavebeenprovideduponyourspecificrequestorexecuteduponyourspecificinstructions,asthecasemaybe,andmaybedeemedassuchbyUBSandyou.Thematerialmaynothavebeenreviewed,approved,disapprovedorendorsedbyanyfinancialorregulatoryauthorityinyourjurisdiction.Therelevantinvestmentswillbesubjecttorestrictionsandobligationsontransferassetforthinthematerial,andbyreceivingthematerialyouundertaketocomplyfullywithsuchrestrictionsandobligations.Youshouldcarefullystudyandensurethatyouunderstandandexerciseduecareanddiscretioninconsideringyourinvestmentobjective,riskappetiteandpersonalcircumstancesagainsttheriskoftheinvestment.Youareadvisedtoseekindependentprofessionaladviceincaseofdoubt.Turkey:Theinformationinthisdocumentisnotprovidedforthepurposeofoffering,marketingorsaleofanycapitalmarketinstrumentorserviceintheRepublicofTurkey.Therefore,thisdocumentmaynotbeconsideredasanoffermade,ortobemade,toresidentsoftheRepublicofTurkeyintheRepublicofTurkey.UBSSwitzerlandAGisnotlicensedbytheTurkishCapitalMarketBoard(theCMB)undertheprovisionsoftheCapitalMarketLaw(LawNo.6362).Accordingly,neitherthisdocumentnoranyotherofferingmaterialrelatedtotheinstrument/servicemaybeutilizedinconnectionwithprovidinganycapitalmarketservicestopersonswithintheRepublicofTurkeywithoutthepriorapprovaloftheCMB.However,accordingtoarticle15(d)(ii)oftheDecreeNo.32residentsoftheRepublicofTurkeyareallowedtopurchaseorsellthefinancialinstrumentstradedinfinancialmarketsoutsideoftheRepublicofTurkey.Furthertothis,pursuanttoarticle9oftheCommuniquéonPrinciplesRegardingInvestmentServices,ActivitiesandAncillaryServicesNo.III-37.1,investmentservicesprovidedabroadtoresidentsoftheRepublicofTurkeybasedontheirowninitiativearenotrestricted.UnitedArabEmirates(UAE):UBSisnotafinancialinstitutionlicensedintheUnitedArabEmirates(UAE)bytheCentralBankoftheUAEnorbytheEmirates’SecuritiesandCommoditiesAuthorityanddoesnotundertakebankingactivitiesintheUAE.UBSAGDubaiBranchislicensedbytheDFSAintheDIFC.UnitedKingdom:ThisdocumentisissuedbyUBSWealthManagement,adivisionofUBSAGwhichisauthorisedandregulatedbytheFinancialMarketSupervisoryAuthorityinSwitzerland.IntheUnitedKingdom,UBSAGisauthorisedbythePrudentialRegulationAuthorityandissubjecttoregulationbytheFinancialConductAuthorityandlimitedregulationbythePrudentialRegulationAuthority.DetailsabouttheextentofregulationbythePrudentialRegulationAuthorityareavailablefromusonrequest.AmemberoftheLondonStockExchange.ThispublicationisdistributedtoretailclientsofUBSWealthManagement.Ukraine:UBSisnotregisteredandlicensedasabank/financialinstitutionunderUkrainianlegislationanddoesnotprovidebankingandotherfinancialservicesinUkraine.UBShasnotmade,andwillnotmake,anyofferofthementionedproductstothepublicinUkraine.NoactionhasbeentakentoauthorizeanofferofthementionedproductstothepublicinUkraineandthedistributionofthisdocumentshallnotconstitutefinancialservicesforthepurposesoftheLawofUkraine"OnFinancialServicesandStateRegulationofFinancialServicesMarkets"dated12July2001.Anyofferofthementionedproductsshallnotconstituteaninvestmentadvice,publicoffer,circulation,transfer,safekeeping,holdingorcustodyofsecuritiesintheterritoryofUkraine.Accordingly,nothinginthisdocumentoranyotherdocument,informationorcommunicationrelatedtothementionedproductsshallbeinterpretedascontaininganoffer,apublicofferorinvitationtoofferortoapublicoffer,orsolicitationofsecuritiesintheterritoryofUkraineorinvestmentadviceunderUkrainianlaw.ElectroniccommunicationmustnotbeconsideredasanoffertoenterintoanelectronicagreementorotherelectronicinstrumentwithinthemeaningoftheLawofUkraine"OnElectronicCommerce"dated3September2015.Thisdocumentisstrictlyforprivateusebyitsholderandmaynotbepassedontothirdpartiesorotherwisepubliclydistributed.USA:DistributedtoUSpersonsbyUBSFinancialServicesInc.orUBSSecuritiesLLC,subsidiariesofUBSAG.UBSSwitzerlandAG,UBSEuropeSE,UBSBank,S.A.,UBSBrasilAdministradoradeValoresMobiliáriosLtda.,UBSAsesoresMéxico,S.A.deC.V.,UBSSuMiTRUSTWealthManagementCo.,Ltd.,UBSWealthManagementIsraelLtd.andUBSMenkulDegerlerASareaffiliatesofUBSAG.UBSFinancialServicesIncorporatedofPuertoRicoisasubsidiaryofUBSFinancialServicesInc.UBSFinancialServicesInc.acceptsresponsibilityforthecontentofareportpreparedbyanon-USaffiliatewhenitdistributesreportstoUSpersons.AlltransactionsbyaUSpersoninthesecuritiesmentionedinthisreportshouldbeeffectedthroughaUS-registeredbrokerdealeraffiliatedwithUBS,andnotthroughanon-USaffiliate.ThecontentsofthisreporthavenotbeenandwillnotbeapprovedbyanysecuritiesorinvestmentauthorityintheUnitedStatesorelsewhere.UBSFinancialServicesInc.isnotactingasamunicipaladvisortoanymunicipalentityorobligatedpersonwithinthemeaningofSection15BoftheSecuritiesExchangeAct(the"MunicipalAdvisorRule")andtheopinionsorviewscontainedhereinarenotintendedtobe,anddonotconstitute,advicewithinthemeaningoftheMunicipalAdvisorRule.©UBS2022.ThekeysymbolandUBSareamongtheregisteredandunregisteredtrademarksofUBS.Allrightsreserved.ab