February 15th, 2021 | 11:00 CET
Enapter, Ballard Power, Plug Power, Nikola - The never-ending hydrogen story!
In principle, hydrogen could cover all of our energy needs and chemically replace many fossil carbons. A few examples are climate-neutral fuel for power supply and mobility, manufacturing processes in the steel or chemical industry, as a fuel for heat supply, or as a storage medium for green electricity. The lowest atomic mass element can do all of this; only the universe plays a trick on humankind. The most abundant atom in the universe is virtually non-existent in pure form on our home planet. So, we have to "manufacture" it. Electrolysis, for example, uses electricity to break down water into the elements hydrogen and oxygen.
time to read: 5 minutes
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Author:
André Will-Laudien
ISIN:
DE000A255G02 , CA0585861085 , US72919P2020 , US6541101050
Table of contents:
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Author
André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
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Enapter AG - Full speed ahead towards mass production
Enapter AG is building the first modular electrolyzer that replaces fossil fuels with green hydrogen. It makes the production of hydrogen a universally applicable and affordable product. Hydrogen is the future for many applications that require a centralized or decentralized energy supply. Enapter's patented Anion Exchange Membrane (AEM) electrolyzer is a standardized, scalable and highly flexible hydrogen production product. Fully modular, the unit features unique software integration. Configurable in minutes, the system is all remotely controllable - perfect for remote applications in difficult-to-reach zones of the globe.
On Friday, the Company released its 2020 numbers. According to the preliminary pro forma figures, Enapter expects group revenues of around EUR 2.1 million, which is around EUR 0.7 million lower than the planned revenue figures used for the indicative company valuation as part of the non-cash capital increase.
According to the preliminary figures, pro forma EBITDA was around EUR -2.9 million, compared with the planned figure of around EUR -5.1 million. The sales figures achieved were mainly impacted by covid-related supply chain interruptions in Italy. With the currently acquired orders of around EUR 2.6 million and taking into account deliveries, the current order backlog for 2021 amounts to around EUR 4.6 million. An operational break-even is expected in 2023 after the start of the electrolyzers' mass production at the "Enapter Campus" manufacturing site in Saerbeck.
The Enapter share rose from EUR 2 to EUR 64 in 2020, making it one of the best-performing stocks on the German stock market. Since 2021, the value has consolidated between EUR 15 and EUR 42. Since hydrogen is only valued on the stock market with future opportunities, a look at the current figures makes little sense. What counts is instead the race of the producers for the first H2 mass applications that will enter our daily lives. Until then, fantasy is being traded and that may bring many more rises for Enapter, as hydrogen stocks are a clear hype theme!
Ballard Power - Raise money now!
The ISI Fraunhofer Institute expects hydrogen demand for Germany to be the equivalent of 800 terawatt hours (TWh) by 2050. This number means an electricity demand of more than 1,000 TWh of "green" electricity for upstream production processes. That would be four times the total amount generated from renewable energies in this country in 2019. Raising the question today whether the production of "green hydrogen" is even possible as the green share of Germany's energy mix is already reaching levels of over 40%.
The Canadian fuel cell developer Ballard Power Inc. has completed another capital increase via new common shares with a three-digit million USD volume. 14,870,000 common shares with an equivalent value of USD 550 million are being issued; investor demand exceeded the offering by a factor of 4. Ballard Power Systems intends to use the net proceeds from the offering to strengthen its balance sheet further, providing additional flexibility to fund its growth strategy.
Particularly to investments in product innovations, the expansion of production capacities, complementary acquisitions, and strategic partnerships.
Ballard's stock has a 12-month performance of 183%, so it has "slightly underperformed" other H2 stocks. A correction has been underway for a week now, which has lowered the level by 10% so far.
Plug Power - Morgan Stanley invests USD 2 billion
In addition to Ballard Power, Plug Power Inc. recently raised fresh capital by issuing new shares. As the US fuel cell manufacturer and its underwriter Morgan Stanley announced, a new industry record was set in this deal. While Ballard Power could collect up to USD 630 million through a so-called bought deal, Plug Power has previously accomplished the same feat with a sum of USD 2 billion.
This type of deal involves a contract between an investment bank and an issuer. The bank undertakes to purchase all securities as part of a capital increase or an IPO before being publicly offered for sale. In this case, the bank goes "long," as it must first acquire the securities itself in exchange for its own money.
In the case of Plug Power, Morgan Stanley was the only bank to participate in the capital measure, acquiring 32.2 million shares plus 4.2 million options at a price of USD 65. As a result, Plug Power received financial resources amounting to around USD 2 billion net. If Morgan Stanley wants to make money from this deal, the share price must sustainably rise above USD 65. So far, the share has been consolidating at a high level between USD 58 and USD 63. For Plug Power, however, the cash windfall is a steep pass: With the bulging coffers, the Company can properly advance product development for hydrogen applications.
Nikola - When will confidence return?
Nikola is trying to restore its lost credibility without yet having a viable business plan. What remains fascinating about this is that the hydrogen investment sector's followers seem to stay on board even with questionable business models. Following the scandal surrounding a manipulated truck video allegedly powered by hydrogen, the stock has fallen out of favor, losing over 75% of its value since mid-2020. The price has now stabilized in the USD 15-30 range. The high reached an issuance in June 2020 with a full USD 70 and a calculated USD 25 billion capitalization. The founder and chief executive of the Company, Trevor Milton, resigned in September 2020 after the quarrels.
So far, the Company's pronouncements have remained mostly theory, with Nikola yet to put a single finished model of its eco-trucks on the road. Nevertheless, Nikola entered into strategic partnerships with Bosch and Italian commercial vehicle manufacturer CNH Industrial and, since early September, with General Motors. Together with GM, for example, Nikola planned to put the "Nikola Badger" electric pickup truck on the tarmac as soon as possible. In return, GM was to receive a stake in Nikola worth USD 2 billion. An additional stake of the same amount was to be added as soon as GM produced the model in its factories and supplied batteries and fuel cells. Before that could happen, however, allegations of fraud arose and GM backed out of its commitment.
Now there is a research house Wedbush that seems to have regained confidence in Nikola. Wedbush analyst Daniel Ives believes Nikola's EV and hydrogen fuel cell ambitions are achievable in the semi-truck market. There is also still USD 900 million in cash on hand. Ultimately, how long the money will last for further development depends on the Company's burn rate. Nikola should not be able to manage large capital increases at the moment. Nikola will deliver figures on February 25 after the close of the stock exchange. It should be exciting!
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