April 6th, 2022 | 10:28 CEST
BASF, First Hydrogen, Nel - These developments are crucial!
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"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
BASF - Domino effect?
"It depends" - this is how one could summarize analysts' assessments of BASF shares. If the prices for oil and gas remain manageable and there is a sufficient supply from Russia, then the share is too cheap. If prices continue to explode, then it is not only the Ludwigshafen-based Company that faces major problems.
Company director Martin Brudermüller recently warned urgently of the consequences of an import stop or a longer-term loss of gas and oil supplies from Russia and painted a bleak picture. "This could bring the German economy into its most serious crisis since the end of World War II," Brudermüller said. He said that Germany's complete renunciation of Russian natural gas supplies is not realistic for another four or five years. "At a certain point, you can no longer operate a site like Ludwigshafen," was his message.
Such a worst-case scenario would have severe consequences for numerous sectors of the economy, as BASF's products are at the beginning of the value chain and, therefore, highly relevant. During the Corona pandemic, the supply chain problems have already shown us how fragile the globally networked economy is. Since the beginning of the year, the share price has fallen by around 20%. Based on the average price target of all analysts, this decline in the share price results in an upside potential of almost 40%.
First Hydrogen - Fully on track
First Hydrogen aims to become the leading designer and manufacturer of zero-emission, long-range hydrogen-powered vehicles in the UK, EU and North America. According to expert estimates, the global hydrogen fuel cell market is growing rapidly and is expected to reach USD 41 billion in five years.
The Canadians are pursuing a best-of strategy. That means integrating existing technologies and a proven chassis. Central to its success are its strong partnerships with AVL and Ballard Power. Currently, First Hydrogen is working with its partners on the vehicle concept and architecture and evaluating production. The Company has set the completion date for the prototype, the First Hydrogen Utility Van, for the third quarter of the current fiscal year.
Recently, the Company confirmed that it was right on schedule. Steve Gill, Automotive Division CEO of First Hydrogen, said, "We are very pleased with the progress in delivering our two demonstration vehicles in collaboration with our partners AVL and Ballard. We are essentially on track to introduce our road-going vehicles to customers in September 2022. Our joint development of this hydrogen fuel cell vehicle will distinguish us as the market leader for fuel cell vehicles in the light commercial vehicle sector. It is a good foundation for our next generation of customized hydrogen fuel cell vehicles, which will incorporate all the technical developments we have achieved to date."
They are also designing and building the prototype for a custom hydrogen fueling station in collaboration with FEV Consulting GmbH of Germany. For this purpose, the Canadians had strengthened their staff with experienced managers. Strategically and commercially, the expansion of the value chain is advantageous. The Company's share price has tripled in the last 12 months. Currently, the Company has a market capitalization of around CAD 150 million. When looking at other companies in the sector, the valuation can be classified as very moderate.
Nel - The assembly lines will soon be starting up
High gas prices will accelerate technological change in the energy industry. According to many experts, the production of green hydrogen, with the replacement of natural gas in favor of water electrolysis with electricity from renewable sources, will gain importance. One of those beneficiaries is Nel.
The Norwegian company recently reported a concrete timetable for its planned production. According to the Company, the automated production facility in Herøya, Norway, is scheduled to go into operation on April 20. The electrolyzer plant can initially produce 500 MW of capacity, which the Company's leader says can be expanded to between 1 and 2 GW.
The energy transition is well underway, but the transformation will take many years. Consumers and industry are currently suffering from high oil and gas prices. Nel and First Hydrogen are well-positioned to benefit from the dynamic growth of the hydrogen market. First Hydrogen, in particular, shines with solid partnerships and a low company valuation.
Conflict of interest
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