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April 6th, 2022 | 10:28 CEST

BASF, First Hydrogen, Nel - These developments are crucial!

  • Hydrogen
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A functioning energy supply influences the prosperity of society and our everyday lives. Security of supply and "affordable" energy prices currently present major challenges. Renewable energies are expected to provide most electricity and energy consumption within the next decades. Green hydrogen is also likely to play an important role. However, high oil and gas prices are placing an enormous burden on consumers and industry in the short term. Inflation continues to grow. How can investors position themselves?

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: BASF SE NA O.N. | DE000BASF111 , First Hydrogen Corp. | CA32057N1042 , NEL ASA NK-_20 | NO0010081235

Table of contents:

    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

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Carsten Mainitz

    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.

    About the author

    Related comments:

    Commented by André Will-Laudien on November 29th, 2023 | 09:50 CET

    DAX on record course, hydrogen sell-off! Plug Power, First Hydrogen, Nel ASA and Daimler Truck on the test bench

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    The DAX is soaring because most investors expect interest rates to fall. Based on the assumption of slower growth, investors are again focusing on cyclically sensitive stocks at the turn of the year. According to the expectation curves for ECB and FED interest rates, the first downward adjustments are already expected in Q2. The key factors here are the slight fall in inflation and the central banks' desire to cushion the potential downturn. Despite all the euphoria, the desire to buy is currently bypassing the hydrogen sector. Representatives of the sector are the stock market losers of 2023. Is there still a possibility of a quick rebound in 2024? We do the math.


    Commented by Fabian Lorenz on November 24th, 2023 | 13:00 CET

    100% upside potential with hydrogen! Siemens Energy, thyssenkrupp and dynaCERT instead of Nel?

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    Is there about to be a changing of the guard in the hydrogen sector? There are significant doubts that the previous investor favorites, Nel and Plug Power, will get their losses under control. Who could be the new favorites? Siemens Energy and BASF are working on a production plant for CO2-free hydrogen. The partners are now receiving funding from the federal government and the state of Rhineland-Palatinate. dynaCERT is having its technology tested under the toughest conditions. The hydrogen and emissions reduction specialist is equipping a team for the Dakar Classic Rally. Could 2024 bring revenue growth? thyssenkrupp nucera shows that you can also earn money with hydrogen. Analysts see almost 100% share price potential.


    Commented by André Will-Laudien on November 23rd, 2023 | 07:30 CET

    Getting in now? Hydrogen - The analysis: Nel and Plug Power sold off, rebound at dynaCERT!

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    It was like a crash. The hype sector hydrogen experienced one of the most significant sell-offs in recent stock market history with a complete reversal to the downside. Parallel to otherwise bullish markets, losses of 70 to 90% were not uncommon. The rationale behind this is understandable and frustrating at the same time: green-oriented governments around the world are trying to accelerate the climate transition but often have the wrong targets in mind due to their lack of expertise. Hydrogen is just a selectively applicable technology and not a solution for global energy supply. Studies show that only the complete, green production of H2 makes any economic sense. Investors have long since seen through the game, and politicians may have to fail before the necessary insight comes. Nevertheless, there are some opportunities for sensible hydrogen applications. We delve into the topic and put current models to the test.