October 14th, 2020 | 13:40 CEST
Ballard Power, Royal Helium, NEL ASA - Through the roof!
Table of contents:
From heaven to hell - and back
The pioneer of fuel cell technology, Ballard Power, can look back on an eventful past. With peak prices of EUR 150.00, investors celebrated the Company as the big stock market star in the 2000s. After the Tech Bubble burst, the Company degenerated into a penny stock. Slowly but steadily, the Canadians made a comeback.
Meanwhile, the share price is almost EUR 16.00. The Company is also fundamentally excellent and broadly based. The Canadians supply fuel cells for several bus companies. Also of interest is the cooperation with Siemens, which urgently needs cells for use in trains. The North Americans are also a supplier for drones, smaller vehicles, and ships.
China in view
The entry of the Chinese Company, Weichai Power, with 19.9% opens doors in the Middle Kingdom. China needs an ecological turnaround more than ever. The obvious thing to do is to rely on Ballard's fuel cell technology.
The leverage lies in the research
At the Investor & Analyst Summit in late September, CEO Randy Mc Ewen announced some positive bullet points. The maximum output of a cell is to be increased, from 4.3 KW per litre to 5.3 KW per litre. Its service life is to be increased from 30,000 to up to 50,000 operating hours.
The message, however, par excellence is this: By expanding product capacities and using more efficient materials, Ballard intends to reduce costs by an incredible 70% over the next four years. Should this strategy take hold, the way back into the (stock market) sky would become more real.
NEL ASA, the European market leader in hydrogen technologies founded in 1927, continues to be one of the big winners of the "hydrogen boom." The Norwegian paper is currently sitting at NOK 21.00. A breakthrough of the all-time high at NOK 23.40 would open up further price potential. Recently, NEL has received a new filling station order. The Danish Company, Everfuel Europe, ordered hydrogen filling stations for EUR 1.6 million.
Surplus demand for other noble gases
Hydrogen and helium are the most common elements in the universe and have a lower density than air. Unlike hydrogen, which is currently the word on everyone's lips, the applications for helium are also extensive and no less important. The healthcare and manufacturing sectors have been drivers of increased demand.
Space travel as a major customer
Space travel will be another significant field in the future. NASA is already the largest single customer for the helium dealers. When launching rockets, helium is needed to regulate the pressure of the fuel tanks. Since fuel consumption can easily exceed 2,000 litres per second, the pressure in the tanks has to be balanced by helium. Demand will increase accordingly for the planned space tourism of Elon Musk with SpaceX and Richard Branson with Virgin.
Niche players with potential
The Canadian Company Royal Helium focuses on the procurement of the noble gas helium. The gas cannot be produced artificially and is extracted from underground deposits. Royal Helium has access to around 400,000 hectares of licenses for the noble gas in North America, making it one of the largest market players. Last week, the Company announced that it received helium permits for an additional 32,166 hectares of land in the southeastern half of Royal's property in Saskatchewan, Canada, where the total area of helium leases and approved concessions now totals approximately 4,320 square kilometres.
Initial recommendation: 'Buy'
In a recently published study by the Canadian analyst firm Cormark Securities Inc., analyst Michael Mueller points out the advantages and enormous opportunities of Royal Helium and gives a buy rating with a target price of CAD 0.80 as an initial estimation.
Currently, the share price is CAD 0.36. According to Mueller, this means that there is a clear chance of a doubling.
Conflict of interest
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