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

Daimler Truck - The success story in the transportation sector

The first practical, real-life test with hydrogen drives suitable for everyday use has been completed. With a range of over 1,000 km, Daimler Truck completed its maiden voyage with fuel cell technology, thus demonstrating a future model for the decarbonization of road transport in the 40-ton range. This marks the first milestone in the transformation and decarbonization of the transport sector. Daimler is making good progress towards series production but, at the same time, is calling in Berlin for the availability of a green energy infrastructure with competitive costs.

The Swabians are pursuing a consistent dual strategy with hydrogen and battery-powered vehicles. In the long term, Daimler Truck prefers liquid hydrogen, which has a significantly higher energy density, for H2-based drives. In daily road traffic, diesel still dominates Europe's roads today with a share of 98%. Widespread use of the new technology can only occur if H2 products are significantly cheaper and can be refueled easily. However, establishing the necessary infrastructure requires additional billions and will take years.

The Daimler Truck share is inexpensive at a current price of EUR 29.30. The estimates for 2024 indicate a P/E ratio of 7.1 and a dividend yield of 5.8%. Around 22 analysts on the Refinitiv Eikon platform expect an average 12-month price target of EUR 41.90 - representing a significant 43% potential gain after the recent correction.

First Hydrogen - Major hydrogen meeting in the UK

Canadian H2 technology company First Hydrogen Corp. is also performing well in the race, particularly with its light commercial vehicles (FCEV). On October 31, the Company held a track day at the Horiba Mira test site in the UK to test its hydrogen fuel cell-powered vehicles. Participants included some of Europe's largest logistics and transportation companies. The areas of application range from pure parcel delivery to supermarket distribution, with companies in healthcare, leasing, public utilities, and even mining taking a keen interest in these newcomers.

In addition to the visual impressions, the test drives were particularly convincing. These were preceded by technical presentations, inspections and explanations of the vehicle. The main focus of the visitors was on the potential development of zero-emission fleets, which make significant tax savings possible in Europe. This would significantly increase margins for operators in the highly competitive local delivery segment. Fortune Business Insights reports that the global electric vehicle market was worth USD 385 billion in 2022 and is expected to grow to around USD 1.6 billion by 2030. The transportation segment has a share of 27%.

CEO Balraj Mann stated: "We are excited to present our zero-emission FCEVs, which recently achieved a range of more than 630 km on a single refueling. They feature easy drivability and efficient powertrain technology that enables our FCEVs to carry large payloads." First Hydrogen anticipates that the UK government will use environmentally friendly transport vehicles as part of the nationwide implementation of the climate transition.

First Hydrogen's share price has recently been caught in the downward spiral of the entire H2 sector despite the Company having achieved all milestones thus far. We consider the punishment within the sector to be completely exaggerated and recommend building up or adding to existing positions. With a valuation of around EUR 72 million, the share is cheap compared to its peer group.

As part of the 9th International Investment Forum on December 5, 2023, CEO Energy Division Robert Campbell will address interested investors at 3:30 pm CET and provide an update on the Company. Click here to register free of charge.

Plug Power or Nel ASA - The fuse is burning!

The sell-off in blockbuster stocks in the H2 sector continues for now. The Plug Power share now points to losses of around 80% and reached a new 3-year low of EUR 3.04 in November. When investors will stop selling remains a mystery, as Plug recently reported increasing order intake and the profit achievement target was also confirmed for 2026. Just over 6 months ago, the share still had a price-to-sales ratio (P/S) of 7.5. Now, this ratio, based on expected revenues in 2024, has plummeted to 1.2. If CEO Andy Marsh's forecasts hold, the share is no longer too expensive.

Norwegian company Nel ASA is doing somewhat better. At EUR 0.635, the share is still a good 10% above its 3-year low. If we take the revenue estimates for 2024 of NOK 2.3 billion as a benchmark, the share is still valued quite ambitiously with a P/E ratio of 5 compared to the Americans. Inclined investors should, therefore, keep an eye on the EUR 0.45 to EUR 0.50 range. However, it is questionable whether the bet will pay off. Because in the annual cycle, the stock markets should now look optimistically to 2024 and slowly shake off existing doubts.

The hydrogen sector is still under heavy pressure. However, this could change soon, as stocks have already technically entered the oversold zone. This could lead to buybacks, especially at the turn of the year. Speculatively, First Hydrogen and Plug Power are highly interesting, while the standard stock Daimler Truck provides good fundamental arguments for buying.