Billions for defense and hydrogen: RENK, Nel ASA, and dynaCERT – Profiteer or "dead cat"?

dynaCERT: Profiteer from the black-red coalition?

Is dynaCERT's European offensive with its HydraGEN technology for reducing CO2 emissions and improving fuel efficiency in diesel engines coming at the perfect time? It certainly looks that way. Reducing CO2 and other greenhouse gases is mentioned as a central measure for climate protection in the black-red coalition agreement. Companies in Germany can, therefore, expect rising CO₂ prices. To counter this - and even tap into a new source of income - the HydraGEN retrofit kits from dynaCERT offer a viable solution. In North and South America, for example, they have already been used successfully for years in the oil and gas industry and mining. The technology generates hydrogen and oxygen "on demand" to reduce fuel consumption and emissions. This enables users to generate CO₂ certificates and new revenue by selling them.

With new German management, a sales offensive is currently underway in Europe. Analysts at GBC Research expect this to lead to a significant increase in revenue and earnings in the coming years. Revenue is projected to increase almost tenfold within just two years, rising from CAD 2.4 million in 2024 to CAD 21 million by 2026. Next year, net profit is expected to reach CAD 5.77 million, with further increases expected. Based on a discounted cash flow model, the fair value of the dynaCERT share, according to the analysts, is the equivalent of EUR 0.48 per share. The share, which is actively traded on German stock exchanges, is currently trading at EUR 0.11. A multiplication is therefore possible.

An exclusive video with Lyndsay Malchuk from Stockhouse Media gives an impression of the production.

RENK: On record course

The defense industry is also profiting from billions in investments. While Rheinmetall and Deutz have announced takeovers, RENK has so far held back on acquisitions. This has not hurt the stock. This week, the EUR 50 mark was exceeded for the first time. This puts the MDAX-listed company, known for transmissions for tanks and other military vehicles, at a market capitalization of more than EUR 5 billion. This is quite an ambitious target, given that revenue of EUR 1.1 billion is expected in 2024. However, of course a lot of the future potential is already priced in.

From an analyst's perspective, RENK is currently fairly valued. Berenberg recently raised its target price for the MDAX stock from EUR 44.40 to EUR 54.50. Although the recommendation is "Buy", the upside potential is limited at under 10%. Analysts expect RENK to publish strong figures for the first quarter of 2025. Publication is scheduled for May 15. In the medium term, growth should then accelerate again. This also seems necessary in order to grow into the current valuation.

Nel ASA: A "dead cat"?

Is Nel a "dead cat"? Unfortunately, after the price jump at the beginning of April, it looks that way. The increase from NOK 2.18 to NOK 2.42 within a few days only briefly gave shareholders cause for joy. In the meantime, the share of the former hydrogen darling is trading below NOK 2.30 again. On the stock exchange, this is referred to as a "dead cat bounce".

The reason for the brief price drop was a cooperation with HydePoint. According to the announcement, a memorandum of understanding (MoU) has been signed to improve hydrogen production in offshore, nearshore, and other harsh environments. Within the partnership, HydePoint will integrate Nel's PEM electrolyser stacks into its hydrogen production systems. Together, robust systems will be developed to ensure reliability under demanding conditions.

Nel Hydrogen COO Todd Cartwright commented: "HydePoint brings an extremely innovative approach to maritime hydrogen systems. We see a strong fit between our PEM technology and HydePoint's drive to deliver resilient, modular solutions for the global clean energy transition."

A declaration of intent does not help to bring about a sustained upward trend in NEL's share price. Samsung's entry in March was an initial ray of hope, but what counts are orders.

A multiplication, on the other hand, seems possible for the dynaCERT share if the analysts' growth forecasts come true. In Germany, a major opportunity appears to be emerging for the Company under the current black-red coalition. Defense stocks like RENK offer security in the current environment, although the potential for further price increases appears to be limited. At Nel, large orders are needed – and more than just one.