JPMorgan picks its favorite Chinese stocks on everything from hydrogen to EV batteries

Published Sun, Jun 27 202110:30 PM EDTUpdated Sun, Jun 27 202110:38 PM EDT

China is becoming a top player in everything from electric vehicles to renewable energy and these stocks are set to benefit from the green energy boom, according to JPMorgan. Green hydrogen Hydrogen is poised to be the next big thing in green energy for data centers and heating homes, as well as powering electric vehicles. JPMorgan sees a "resurgence of interest" in using hydrogen fuel cells in electric cars and says there could be a pick-up in orders for such vehicles in the second half of this year. These "positive catalysts" could boost stocks like Hong Kong-listed Dongyue Group , which owns a hydrogen materials unit. Solar JPMorgan said its top solar stock picks could see around 40% earnings growth in 2022 and that should drive stocks higher. Currently, polysilicon is in short supply and about 80% of the global industry relies on Chinese sources for the material, which is needed to manufacture solar panels. Still, the bank said that supply issue should "prove to be short-lived." "We recommend investors … accumulate quality names that can gain market share and deliver strong growth in the post-poly tightness era," it said. The bank picked two stocks: Shenzhen-listed Sungrow , which develops solar inverters and energy storage systems, among other products. Hong Kong-listed Flat Glass Group . It mainly produces glass, but also constructs solar photovoltaic power stations. Electric vehicle-related stocks China is poised to lead the global electric vehicle industry and, by some measures, is already far ahead of the U.S. in this sector. Analysts at JPMorgan named Chinese EV battery maker CATL as one stock it's bullish on. They noted the company is launching batteries made of sodium-ion in July, which is widely available and relatively inexpensive compared with the conventional lithium battery. The analysts said lithium batteries are "handicapped" due to limited availability, higher costs and environmental hazards involved in the mining of this metal. JPMorgan also picked Guangzhou Tinci Materials and Capchem , two names which produce electrolyte, a substance found in car batteries. The bank says there will be robust demand and tight electrolyte supply, which will support high electrolyte prices.

An electric vehicle charging station is seen at Nio's headquarters on Jan. 31, 2021 in Hefei, Anhui Province of China.

Ruan Xuefeng | Visual China Group | Getty Images

China is becoming a top player in everything from electric vehicles to renewable energy and these stocks are set to benefit from the green energy boom, according to JPMorgan.