March 19th, 2021 | 10:30 CET
Enapter, FuelCell, NEL, Plug Power - hydrogen or battery?
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
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.
Enapter AG - Capital increase completed with EUR 17.8 million
In the current environment, Enapter AG can be pleased about fresh capital amounting to EUR 17.8 million. The previously completed rights offering was significantly oversubscribed at 42% and the entire capital increase will lead to a significant boost in liquidity in the stock once it is registered.
The technology hotbed needs money in large quantities. In addition to the property in Pisa, Italy, it is building a new production and research site in Saerbeck, North Rhine-Westphalia. The ultra-modern production facility will be completed by the end of 2022 because the green H2 production is to start entirely with renewable electricity, one of the few industrial sites to focus on sustainability from the outset. The main product will again be the modular electrolyzer unit. It represents the current Enapter core technology. There are also already market-ready units with the abbreviation EM 2.1, which operate based on anion exchange membrane (AEM) electrolysis.
Enapter has not been greatly affected by the current wave of sales in the hydrogen sector, as the sell-off in hydrogen stocks is based on an overvaluation resulting from the automotive sector's dwindling prospects. With the broad commitment to battery propulsion, the focus of H2 research is now on basic applications, primarily in the energy sector.
Here, Enapter is at the forefront. Enapter is a typical representative of distributed energy storage, suitable for all off-grid applications around the globe. The focus here is on areas that are difficult to access and have little infrastructure. Enapter could provide one of the necessary unique solutions, suitable in the long term for green energy supply in Africa, Asia or even the polar zones. The availability of renewable energy sources alone can elevate hydrogen to the perfect decentralized energy storage, a solution that could finally replace the climate-hostile diesel aggregate.
Enapter stands for CO2 reduction and climate neutrality, and the growing global demand for energy plays into the Company's hands. We recently warned against the overvalued peer group, but those who are faced with the choice today are betting on the long-term growth prospects of the Enapter share.
FuelCell - Poor figures cause sell-off
FuelCell stock is undoubtedly one of the more uncertain stocks in the sector at the moment. Last week, it reported numbers for its most recent quarter. FuelCell Energy Inc. suffered an operating loss of 6 cents per share in the first quarter of fiscal 2021, which was 50% above analysts' estimates of 4 cents and exceeded the previous year's total loss of 3 cents. Now, FuelCell also has significantly more shares than it did a year earlier.
Total Q1 revenues for the group were just USD 14.9 million, also dramatically below the USD 20 million expected as well as below the numbers for the same period last year. One begins to wonder when the knot will break at FuelCell and growth will finally be on the clock. We find the 30% drop in the share price quite reasonable. After all, the value has risen 1400% in just 4 months due to irrational industry dynamics. From the perspective of a rational investor, we expect further price losses here.
Nel ASA - Sometimes you are the second winner
The Germans were faster! Linde PLC already makes USD 2 billion in sales with hydrogen and wants to multiply the segment in the next few years. And with green hydrogen, which has so far been heavily underrepresented in total sales, they want to set standards. Only recently, Linde was able to win a customer from its competitor Nel ASA "on its doorstep".
After Linde announced its intention to set up and operate a nationwide hydrogen network for South Korea with Hyosung Corp, there is now another deal to report. The Norwegian ferry Company Norled has selected Linde as a supplier for the necessary refueling infrastructure and the delivery of the green hydrogen. And this involves the world's first hydrogen-powered ferry service for passengers and vehicles.
NEL had recently delivered figures below expectations and was immediately taken to task in the industry turmoil. The former stock market darling crashed from EUR 3.40 to EUR 2.10, which was almost 40% of the TOP in only 2 months. Let's see how it continues here. On a one-year view, the value is still a good 200% up.
Plug Power - Balance sheets have to be corrected
This does not sound good. The US hydrogen Company Plug Power has terrible news for its shareholders: The Company has to correct several annual financial statements after the auditor KPMG discovered errors in the financial reports.
Specifically, the Company said that accounting errors had been identified that were "mainly attributable to several non-cash items." Specifically, these were incorrect book values, in addition to loss provisions and impairments of long-lived assets. And some of the research and development costs had also been misclassified. The consequences of this are far-reaching, as the accounting errors will require the restatement of several annual financial statements. The reporting periods of the last three fiscal years are affected, but this does not impact the liquidity situation, business operations or profitability.
Plug Power still expects to reach USD 475 million in gross sales in 2021, and Plug Power did not adjust its targets for subsequent years. Shareholders nevertheless sent the 2020 highflyer on a downward slide, with the stock now losing just under 50% in the last 6 weeks of trading. We had warned against the completely overvalued share early on and expect the current revaluation to continue.
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