April 14th, 2023 | 10:28 CEST
dynaCERT, Daimler Truck, Plug Power - Into the future with hydrogen solutions
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
dynaCERT - Demand for HydraGEN technology is increasing
Canadian company dynaCERT uses hydrogen to optimise the combustion of diesel fuel. The patented HydraGEN technology can be retrofitted to all diesel vehicles. This not only saves fuel but also protects the environment by reducing emissions during combustion. Using the Company's HydraLytica software, the user receives an evaluation of how much CO2 has been saved. Currently, the Company is waiting for approval from VERRA to receive CO2 certificates. This will enable dynaCERT's customers to reduce their CO2 footprint accordingly, which will also be increasingly important for competitiveness in the future.
There are now 4 HydraGEN models, which can also be used in large vehicles such as mining or agriculture. In Q4, 137 HydraGEN systems were sold. For the 1st quarter, CEO Jim Payne expects a new record. The Company had good discussions with mining producers at the PDAC commodity fair in Canada. According to researchanalyst.com, the Company expects demand to increase in the coming months. It fits the picture that the Company secured working capital via a private placement on April 11. A CAD 2 million convertible bond was issued, which bears interest at 10% until December 31 2023. The holder also has the option to convert in whole or in part into 6,666,667 common shares of the company at a conversion price of CAD 0.30 per share and received additional 666,667 common share purchase warrants.
CEO Jim Payne commented, "The proceeds from this offering will allow us to accelerate the delivery of orders of great strategic importance to dynaCERT." After the long delays by Corona, momentum is slowly building. The share has so far not been able to leave its sideways phase between CAD 0.17 and CAD 0.20 but is trading in the upper range at CAD 0.195. Three catalysts could ensure an upward breakthrough. Firstly, another record quarter; secondly, the confirmation from VERRA that they will receive CO2 certificates in the future. Last but not least, the Canadian Hydrogen Convention at the end of April, where dynaCERT and Cipher Neutron will present their 5-kilowatt AEM hydrogen electrolyser, capable of producing 1000 l of green hydrogen per hour.
Daimler Truck - The good year 2022
Daimler Truck has thrown its pure electric truck strategy overboard and is developing a hydrogen drive for its trucks. This way, the group covers the different application areas and can offer appropriate vehicles depending on the usage profile. The GenH2 trucks are to have at least twice the range of the e-trucks. The hydrogen drive increases the payload, and refuelling is much faster than the electric drive. Daimler Truck relies on liquid hydrogen because the tank is much smaller than with 700-bar storage.
The figures for 2022 were impressive. Revenues were around EUR 51 billion, and EBIT increased by 55% to just under EUR 4 billion. A total of 520,300 vehicles were sold. In 2023, sales are to be increased further, with no more buses and trucks being sold. Investors will have to wait until May 9 for Q1 figures. Competitor Volvo has already presented good figures, and so hopes are rising that Daimler Truck has also performed well. Above all, the supply chain problems are getting smaller.
Costs are to be reduced at the group subsidiary Evobus. This has been agreed with the general works council. In future, the bodyshell of the buses will be built in the Czech Republic. The restructuring is to be completed by 2028. The Mannheim site will focus on electric buses. Coaches will be manufactured in Neu-Ulm. Since the beginning of the year, the share price has fluctuated between EUR 29 and EUR 33. Currently, one share costs EUR 29.96. A dividend of EUR 1.30 has been proposed, which corresponds to a dividend yield of 4.3 %.
Plug Power - Record production
Plug Power covers the entire value chain in the hydrogen sector. Large corporations such as Amazon have already been acquired as customers. The Company now has projects running worldwide and is therefore diversified. The conditions for hydrogen will continue to improve in the coming years. The USA has launched a USD 750 billion climate package, and the European Union has reached a preliminary deal to increase the share of renewable energies in the energy mix of the member states. The target was raised from 32% to 42.5% by 2030.
The surplus energy from solar and wind power must be stored. In this way, green hydrogen will be produced more and more cheaply in the future, ultimately making hydrogen competitive. It is fitting that Plug Power produced 122 units of the 1 MW electrolyser stack platform in Q1. In addition, almost 1,000 stacks for special applications with a total capacity of 5.7 MW were delivered. The 2.5-GW gigafactory in Rochester is thus slowly approaching full capacity.
After the group revised its targets several times last year and, in the end, failed to meet even the reduced expectations, the share price went downhill. Most recently, Morgan Stanley downgraded the share to Hold with a price target of USD 15 at the beginning of April. This put the share under pressure again and caused a new low for the year at USD 8.90. Plug Power's main problem is weak margins and cash burn, which could cause financing problems.
Hydrogen can be used to advance some new technologies. In some cases, it still takes a little time, like Daimler Truck, which is still developing the hydrogen truck. In other cases, sales are already underway, as with dynaCERT, which set a new record in Q4 2022. According to the CEO, the prospects for the future are good as there is more and more demand for the patented technology. Plug Power has noteworthy sales but has yet to make money and has a high cash burn rate. Investor confidence must be regained before the share can make a sustainable turnaround.
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