09. November 2021 | 11:14 CET
Covestro, First Hydrogen, Volkswagen - Win with hydrogen!
The UN Climate Change Conference COP26 is in Glasgow until November 12 and is crucial for political climate protection measures in the coming years. The targets have already been put down on paper in black and white. Net Zero Emissions are to be achieved by the middle of the century. Fuel cell and hydrogen drives are essential prerequisites for achieving this Net Zero vision. Various companies have interesting opportunities to enter the market in the context of strategic alliances.
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ISIN: COVESTRO AG O.N. | DE0006062144 , First Hydrogen Corp. | CA32057N1042 , VOLKSWAGEN AG VZO O.N. | DE0007664039
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
First Hydrogen - Cooperation with big players
With no OEM legacy from fossil fuels or previous EV investments, Canadian company First Hydrogen launched with the goal of developing a clean hydrogen mobility system from the ground up. The long-term goal of the Company, assembled from experienced minds in the industry, is to become the leading designer and manufacturer of zero-emission, long-range hydrogen-powered commercial vehicles in the UK, EU and North America.
It focuses on the global logistics market driven by the booming digital economy and its efforts to meet emission reduction targets. With the "First Hydrogen Utility Van," First Hydrogen aims to solve the problems of major logistics players such as Amazon and UPS. The Company seeks to save both development time and cost with a "best of strategy," which means using a design and integration strategy and leveraging a proven chassis. The prototype is expected to take a maximum of 12 months to build; this is well below the industry average.
Already in the second quarter, the cooperation with two high-caliber companies was sealed. Ballard Power, a global provider of innovative clean energy with a hydrogen fuel cell fleet, was secured for its technology. A definitive agreement was reached for the design with AVL Powertrain UK, the world's largest independent automotive development, simulation and testing Company.
Recently, the completion of the initial development of light commercial vehicles for demonstration purposes for the UK market was announced. Next on the schedule is the further development and construction of two hydrogen-powered light commercial vehicles for demonstration purposes at AVL's UK facilities, with delivery scheduled for the third quarter of 2022.
In addition, First Hydrogen will also offer fuel cell-powered systems for CO2 extraction, allowing users to operate the systems in remote locations where no power grid is available, or power supply is unstable. With a valuation of CAD 91 million, the Canadian Company is still moderately valued. That First Hydrogen's management is in the premier league is demonstrated by the appearance of Nicholas Wrigley (non-executive director and chairman of First Hydrogen Limited UK) at Invest Africa's roundtable discussion at the UN Climate Change Conference COP26 as a guest speaker.
Covestro - All good things come in threes
Covestro AG is a listed materials manufacturer headquartered in Leverkusen, Germany. The Company emerged from the former plastics division of Bayer AG in 2015 and until then operated under the name Bayer MaterialScience. Following an extremely successful third quarter, the DAX member has raised its forecasts for the third time in the current fiscal year. The operating result is expected to rise to EUR 3.0 to 3.2 billion instead of EUR 2.7 to 3.1 billion as announced in the summer, the Company reported.
In the third quarter, analyst forecasts were significantly exceeded. Mainly due to significantly higher selling prices, revenues climbed 56% to EUR 4.3 billion. EBITDA increased by 89% to EUR 862 million. Net profit more than doubled to EUR 472 million, compared to EUR 179 million in the same period last year.
"We were able to fully carry the momentum of the first half into the third quarter, benefiting from the sustained high price level," said CEO Markus Steilemann. Following the final quarterly figures, analysts at UBS reiterated their "neutral" rating on Covestro with a price target of EUR 61.
Volkswagen - Drastic reduction
The share of the car company Volkswagen must continue to struggle with red figures. After the relatively weak outlook in the figures for the third quarter, negative analyst voices were heard. Analyst Philippe Houchois from the investment bank Jefferies sees the Wolfsburg-based Company less optimistically and downgraded Volkswagen from previously "Buy" to "Underperform".
In addition, the expert lowered the price target by a full EUR 100 from previously EUR 270 to EUR 170. The reason for this is that Volkswagen cannot keep up with the rapid development of electric car manufacturer Tesla. The analyst sees the complex setup as well as legacy issues and government influence as unfavorable.
The climate targets for the next decades are currently being discussed at the World Climate Conference in Glasgow. Hydrogen and fuel cell technology play a central role in this. First Hydrogen is well positioned with its "best-of strategy" but is still at the beginning of the development phase. Analysts significantly punished VW, and Covestro continues to benefit from high selling prices.