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May 9th, 2022 | 10:37 CEST

BYD, First Hydrogen, Daimler Truck - Shares for the transportation of tomorrow

  • Hydrogen
  • Trucks
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The transportation industry is on the verge of a radical change. According to a study by Bain & Company, every second vehicle will no longer require diesel as early as 2025. But while it is a done deal that the future of passenger cars belongs to the e-car sector, the outcome in the transport industry is still open. Yet freight transport is responsible for a large proportion of emissions. The problem is the heavy batteries, which still cause performance losses and longer charging times. Hydrogen can score points, especially in terms of charging times, and offers high fuel cell efficiency. Today, we take a look at three stocks for tomorrow's transportation.

time to read: 4 minutes | Author: Armin Schulz
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , First Hydrogen Corp. | CA32057N1042 , Daimler Truck Holding AG | DE000DTR0013

Table of contents:

    BYD - New sales record in April

    In the beginning, BYD was involved in battery production. In the meantime, the brand is better known for the production of e-cars. But the Company also has electric buses, trucks and vans on offer in addition to cars. As BYD's latest sales figures show, the market for electric vehicles is booming. While there was around 105,000 electric drive (EV) vehicle sales in March, there was another new sales record in April with 106,042 EVs. That is remarkable, as China is in lockdown, and other manufacturers have had to announce declining numbers.

    If you look more closely at the sales figures, you can see that the Group sells mainly passenger vehicles, amounting to 105,475. In commercial vehicles, there are only 567 vehicles and mostly buses at 529 units. There, sales increased YOY, while sales of other commercial vehicles fell significantly. In April 2021, there were 301 vehicles, and this April, only 38. The reason for this is economic efficiency. For trucks, in particular, it is vital that they can cover long distances. In addition, there is a long charging time with an electric drive.

    On May 4, the Company reported a follow-up order from Washington for 8 e-buses. So all in all, business is going extremely well if you look at the figures for the first quarter. Sales were up by 63%, and the bottom line was a 240% increase in profits. After a period of consolidation, the share has formed an initial upward trend. It has been running sideways between USD 26.61 and USD 31.55 since the end of March. The share is currently trading at USD 29. Credit Suisse recently issued a price target of around USD 44.50.

    First Hydrogen - Test vehicles on the road in June

    First Hydrogen is betting on hydrogen to power future commercial vehicles. The focus is on the development of a van. To get the best results as quickly as possible, the Company relies on the best-of approach. It is using the platforms of existing popular models and has brought two strategic partners on board, Ballard and AVL Powertrain. Ballard is responsible for the drive system, while AVL takes care of the design. This approach enabled a demo vehicle to be presented within a very short time. Since the beginning of the year, the Company has been working with its German partner FEV Consulting GmbH on the production and introduction of refueling stations.

    The development of the van is progressing well. Ballard is exchanging ideas with AVL and optimizing the fuel cell, while AVL is working on the design in parallel. The Company plans to run tests on the road and a race track in June. Then in September, they plan to start delivering the first vans. Steve Gill commented, "Our joint development of this hydrogen fuel cell vehicle will set us apart as the leader in fuel cell vehicles in the light commercial vehicle market...." On April 11, the Company announced that it was stepping up the development of green hydrogen manufacturing projects in the UK and Canada. Four sites have been identified in England, located in prime industrial areas, where hydrogen production facilities will be built, with a total capacity of between 80 to 160 megawatts.

    All of these projects are seeking financing, and on April 22, the Company announced a private placement at 2.70 Canadian dollars (CAD) to raise a total of CAD 6 million. Investors will also receive a warrant that can be drawn at CAD 3.70. The share has performed well so far and is currently trading at CAD 2.95. Those who would like to get a more detailed picture of the Company should note May 19. Nicholas Wrigley, Chairman of First Hydrogen UK, will present the Company at the International Investment Forum and answer questions.

    Daimler Truck - Pursuing a dual strategy for drive systems

    Daimler Truck has not yet decided on a technology for commercial vehicles and is developing in the direction of electric and hydrogen. For Chief Technology Officer Andreas Gorbach, hydrogen trucks have an advantage in terms of overall operating costs, especially in long-distance transport. One has to examine on a case-by-case basis what the exact requirement profile looks like and can then make a decision. The Stuttgart company is thus well prepared for the times after combustion engines.

    However, a dual strategy is not only being pursued for trucks but also buses. The Group announced this at its eMobility Days in Mannheim. By 2030, the Company wants to offer electric power and hydrogen solutions in every segment. The bus division is currently struggling with the reluctance of customers, and the head of the division, Till Oberwörder, told the Financial Times that it would take another 3 years until demand returns to the pre-Corona level. On May 4, it was announced that 20 E-Citraro buses were delivered to Dresdner Verkehrsbetriebe.

    The Daimler Truck share fell after the inclusion in the DAX and is currently quoted at EUR 25.89. The downward trend has been stopped, and a first small upward trend has been established. It will remain intact as long as the share does not fall below EUR 22.97 on a closing price basis. Analysts consistently regard the share as a buy. Among them are Goldman Sachs, Deutsche Bank and JPMorgan. The price targets are between EUR 35 and EUR 50. The price-earnings ratio is between 10 and 11, confirming that the stock is relatively inexpensive.

    It is currently not yet decided which technology will drive commercial vehicles in the future. While BYD relies purely on electric vehicles and is doing well with sales of passenger cars, First Hydrogen relies on a hydrogen drive for its vans. The tests in June will provide new insights. Daimler Truck has now decided on a dual strategy and intends to develop and use both technologies. That puts the Company in a perfect position for the future.

    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

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author

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