Disaster at Plug Power! Opportunities with Thyssenkrupp Nucera and First Hydrogen shares!

First Hydrogen: Is everything set for a share price increase?

In their latest update on First Hydrogen, the experts at researchanalyst.com have summarized the developments in 2023. They attest to the Canadian hydrogen newcomer achieving numerous milestones: The light commercial vehicles with hydrogen fuel cell drive have passed the test under real road conditions, and the record ranges of 630 km have already convinced two large fleet operators in the UK. Further orders are expected to follow in the current year. At the same time, First Hydrogen is already working on the next-generation prototypes. The extension of the value chain that has been initiated offers additional upside potential. In the future, the Company wants to provide hydrogen fuel cell commercial vehicles and the green hydrogen required for refueling. The first production plant for this is to be built in Quebec, Canada.

North America is, of course, also an exciting sales market for First Hydrogen's commercial vehicles. After Europe, the Company is now targeting expansion into this region. The demand appears to be huge: a study by Sacré Davey Engineering Inc. found that the sales potential of First Hydrogen's hydrogen-powered light commercial vehicle in the US and Canada alone is 6 million units - and rising. Due to the zero-emission requirements, the volume will likely rise to over 8 million vehicles.

Despite these successes and prospects, First Hydrogen's shares were able to escape the weak stock market environment in the hydrogen sector in 2023. After the share price decline of around 65% in the past twelve months, the market capitalization is "only" CAD 79 million. This means that First Hydrogen is currently on special offer, according to researchanalyst.com. The share also looks significantly better on the chart than other companies in the peer group. Since mid-October, a bottom has formed, and while Plug Power and Nel & Co. have started 2024 with new lows, First Hydrogen is showing relative strength. The expert's conclusion: Due to the high potential and positive future prospects, a long-term entry opportunity should present itself at the current price level. Click here for the full update.

Plug Power: Will the money run out in 2024?

While First Hydrogen has reached milestones in 2023, Plug Power has not really gotten off the ground. Although the US company is further along in its development than the Canadian company, its market capitalization is around USD 2 billion (First Hydrogen is CAD 79 million). The operational development, particularly concerning the margin, has been quite alarming. There is no sign of the Company approaching break-even. Originally, the management had even announced the possibility of achieving a gross margin of 10% in 2023 with sales of USD 1.4 billion. However, this projection has since been abandoned, and the figures for the first nine months of 2023 speak an entirely different story. In the first three quarters of 2023, Plug Power generated sales of USD 669 million. At the same time, the gross loss more than doubled year-on-year to USD 285.5 million. The figures for 2023 as a whole will, therefore, be deep in the red, and revenue is expected to be around USD 1 billion at most. The medium-term targets, therefore, also appear to be anything but certain. Especially as Plug Power itself has stated that "the existing cash and cash equivalents and the shares available for sale will not be sufficient to finance operations over the next twelve months".

The Company is building factories for the construction of hydrogen fuel cells and has also signed purchase agreements for electrolysers in 2023. With the capacity expansion, sales are expected to rise to over USD 2 billion in the current year, with a gross margin of 25%. By 2027, revenue is then expected to explode to around USD 6 billion and the gross margin to 32%. The actual development in recent years and the current financial situation cast serious doubt on these forecasts.

Thyssenkrupp Nucera: Up to 90% possible

The big difference between Thyssenkrupp Nucera and the top dogs, Nel and Plug Power, is profit. It must be said that the German hydrogen hopeful also has other profitable business areas. But the growth driver is hydrogen. **Among other things, Thyssenkrupp Nucera is building a water electrolysis plant with an installed capacity of more than 700 MW for H2 Green Steel, with which the Swedes want to operate the first large-scale green steelworks in Europe. The majority of the order will be implemented in the current year 2023/24. In total, Nucera recorded an order intake of EUR 205.6 million in the alkaline water electrolysis segment for the production of green hydrogen in the financial year 2022/23. The total order backlog at the end of the financial year was around EUR 1.4 billion.

But back to profits: EBIT rose from EUR 8.8 million to EUR 23.8 million. With sales of EUR 1.4 billion, the EBIT margin improved from 2.3% to 3.6%. The strong result was also due to increased interest income. This amounted to EUR 10.6 million. However, even without this, Nel and Plug Power are still a long way from Nucera's margins.

Due to the positive business development, analysts consider Nucera's current share price of around EUR 16 relatively low. The biggest optimist is Deutsche Bank. The analysts recommend buying the Nucera share with a price target of EUR 29. Berenberg takes a more conservative stance with EUR 22, but even this would suggest an increase of almost 40%. The experts at Goldman Sachs issued a "Neutral" rating, setting their target price at the current level of EUR 16.

The current year promises to be another exciting one for hydrogen investors. Even though Plug Power might have numerous options to avoid insolvency, shareholders should keep a close eye on the Company's developments. Among the major hydrogen players, Nucera appears to be the most solidly positioned. First Hydrogen could emerge as the hydrogen star of 2024, especially if further orders for commercial vehicles are secured from major fleet operators.