Close menu




November 20th, 2023 | 07:20 CET

BYD, First Hydrogen, Nikola - Mobility in transition, which shares have long-term potential?

  • Hydrogen
  • greenhydrogen
  • Electromobility
Photo credits: pixabay.com

The mobility landscape has changed drastically in recent years. Traditional internal combustion engines are increasingly being replaced by more environmentally friendly alternatives such as electric vehicles and hydrogen fuel cells. These changes will also have far-reaching implications for transportation, altering how we move. Which technology will prevail? We look at three companies with different approaches to the topic and assess which companies are well-positioned for the future.

time to read: 5 minutes | Author: Armin Schulz
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , First Hydrogen Corp. | CA32057N1042 , NIKOLA CORP. | US6541101050

Table of contents:


    Dirk Graszt, CEO, Clean Logistics SE
    "[...] 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

    Full interview

     

    BYD - High gross profit margin brings record figures

    The former battery manufacturer BYD has set standards in the field of electromobility with its blade batteries. In October, the Group sold a total of 301,833 electric vehicles. This means that around 2.4 million vehicles have been sold this year, a good 71% more than in the same period last year**. This strength was already evident in the figures for the third quarter. Despite weaker demand and increased competition, a record profit was achieved. Net profit rose by 82.2% to RMB 10.41 billion (approx. EUR 1.34 billion). At the same time, turnover increased by 38.5% to RMB 162.2 billion (EUR 20.94 billion), which did not quite meet analysts' forecasts.

    Nevertheless, the Group was able to meet its profit forecasts. In the end, net profit for the third quarter amounted to RMB 10.4 billion (EUR 1.34 billion), within the predicted range of RMB 9.55 billion to RMB 11.55 billion (EUR 1.23 billion to EUR 1.49 billion). Earnings per share amounted to RMB 3.58 (EUR 0.46) and exceeded expectations of RMB 2.41 (EUR 0.31). This quarter's high gross profit margin of 22.3% is responsible for these good figures. Other car manufacturers can only dream of this. One of the reasons for BYD's resilience lies in its vertical value chain, such as its own battery and semiconductor production.

    After the figures, there was praise from Charlie Munger, the man next to Warren Buffet at Berkshire Hathaway. For the future, the Group is primarily planning internationalization. A plant is also to be built in Europe, and the location is to be announced by the end of the year. According to media reports, Hungary is currently leading the race for the factory. A plant is also to be built in Mexico. The share has been trading sideways since the beginning of September and is currently trading at EUR 28.91, significantly below Goldman Sachs' target price of EUR 40.65.

    First Hydrogen - Presentation to major customers

    First Hydrogen specializes in the development of light commercial vehicles powered by hydrogen. The Company seeks a significant market advantage by applying an engineering and integration strategy that incorporates the best of existing technology and design. This includes proven, tested and available components such as the MAN chassis or the Ballard fuel cells. The van, which already has road approval and has been thoroughly tested by various fleet operators, offers a range of 600 to 1,000 km depending on the load, can be refueled in under 10 minutes and is low-maintenance. A report by Rivus, a fleet operator who has already had the opportunity to test the vehicle, states: "...overall, the vehicle performed very well during the tests and appeared much more robust than a BEV (Battery Electric Vehicle)...".

    To introduce the vehicle to a larger group of customers, the Company attended Fleet & Mobility Live and held the 1st Track Day on October 31, where 20 large fleet operators were invited. The guests had the opportunity to test the van on the Horiba Mira test track. Among the participants were some of the largest companies in Europe and the UK, from parcel services, supermarkets, utilities and more. First Hydrogen wants to offer these companies the complete value chain - starting with the vehicle, through the refueling systems to the green hydrogen, everything is to be available from a single source.

    The Company is working with German partner FEV Consulting GmbH for the filling stations. For the production of green hydrogen, a 35-megawatt plant is to be built in Quebec, which will produce 15,750 kg of hydrogen per day. A total of 3-5 sites are to be developed in order to be able to supply the vans sold with hydrogen. First Hydrogen's shares have come under pressure following the Plug Power quake and are currently trading at CAD 1.65. The long-term prospects for hydrogen are good, as both governments and industry want to drive forward development in this area. Hydrogen production alone is expected to generate USD 230 billion in sales by 2030.

    First Hydrogen will present at the 9th International Investment Forum

    Nikola - Running out of money

    Nikola specializes in trucks and has always aimed to offer both electric and hydrogen trucks. On November 2, the Company presented its Q3 figures. A recall of around 200 battery-electric trucks due to safety problems is financially impacting the Company. The necessary measures are expected to cost around USD 62 million. USD 250 million was raised via a convertible bond, which increased cash and cash equivalents by USD 136.2 million. Negative sales of USD 1.73 million were reported due to cancellations, and the net loss amounted to USD 425 million.

    The 47 new orders for battery-electric trucks and the 277 pre-orders for the hydrogen fuel cell truck are positive. However, the Company's executive bodies have not been so positive for some time. On November 17, CFO Anastasiya Pasterick announced her departure, although she had only joined the management team in March of this year. CEO Michael Lohscheller resigned in August. This is certainly also related to the announcement in February that they had to report that they might not be able to sustain operations in the next 12 months.

    There is currently no opportunity for investors to enter the Company, as the losses are simply too high. At the end of the year, the net loss is likely to exceed USD 500 million. A capital increase could be used as a lifeline, which would put the share price under pressure, and the existing shareholders would then be significantly diluted. One share currently costs USD 1.04. Below USD 1, the NASDAQ listing would be at risk in the long term.


    Hydrogen and electric drives will be at the heart of emission-free mobility in the future. BYD is in the process of taking market share from the established car manufacturers. The growth story is likely to continue with internationalization. With light commercial vehicles, First Hydrogen has chosen an emerging market and, with its fuel cell approach, offers the solution to remedy the weaknesses of electric vehicles. This offers potential. Nikola will find it difficult to maintain its operations due to the high losses. If at all, only through capital measures, which are likely to weigh on the share price.


    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.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    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



    Related comments:

    Commented by André Will-Laudien on June 19th, 2024 | 07:15 CEST

    Opportunities upon opportunities: sell AI now! Nel ASA, Royal Helium, Plug Power, and BYD

    • Mining
    • Helium
    • renewableenergies
    • Electromobility

    19,887 is the new record high of the NASDAQ 100 index. Dream returns from Nvidia, Apple, and Microsoft could accelerate the stock market's growth into the summer once again. This could also make the second quarter of 2024 a good month for equities, as the saying "Sell in May and go Away" does not seem to apply this year. However, there are plenty of lagging stocks with great potential. They are currently on one side, as the attraction of the "Magnificent Seven" is too strong. We take the euphoria as an opportunity to take a closer look at a few promising stocks.

    Read

    Commented by Fabian Lorenz on June 19th, 2024 | 07:00 CEST

    Insider alert at Rheinmetall and Thyssenkrupp Nucera! Is First Hydrogen better than Nel?

    • Hydrogen
    • GreenTech
    • Defense
    • renewableenergies

    Insiders are taking action after the Rheinmetall share slipped below the EUR 500 mark in the past few days. Following share purchases last week, more board members ordered shares at the start of this week. And there is also positive news on the operational side. There is also an insider alert at Thyssekrupp Nucera. Can the German hydrogen share stop the downward trend? And should First Hydrogen be preferred over Nel? There are good reasons for this. The Canadians' hydrogen commercial vehicle has now also impressed Amazon in practical tests. The news has gone under the radar in the current negative industry environment. This presents a buying opportunity, as EUR 500 million in annual revenue potential is offset by a EUR 30 million market capitalization.

    Read

    Commented by Armin Schulz on June 18th, 2024 | 06:45 CEST

    BYD has to pay punitive tariffs - How will this affect Altech Advanced Materials and Volkswagen?

    • Digitization
    • Electromobility
    • Batteries

    In the midst of turbulent trade disputes, the situation in the global electric vehicle market is coming to a head. The EU has announced punitive tariffs on Chinese electric vehicles from July 4, and manufacturers such as BYD, Geely, and SAIC are therefore in the spotlight. The EU Commission accuses the Chinese vehicle manufacturers of benefiting from state subsidies, thus entering the European market with a competitive advantage. The level of duties depends on the manufacturers' willingness to cooperate with the investigations. Duties can range between 17.4% and 38.1%. The planned measures are shaking up the industry and further escalating the trade conflicts with China. German vehicle manufacturers fear retaliatory measures.

    Read