14. July 2021 | 11:39 CET
Enapter, NEL, Plug Power, FuelCell - Hydrogen under cross-examination!
The sharp rise in prices for heating energy and fuels keeps Germany's inflation rate at a high level. With an increase of 2.3% compared to the same month last year, inflation slowed slightly in June, but it had risen in each of the previous five months, reaching 2.5% in May, the highest level in almost 10 years. The efficient production of hydrogen and its industrial utilization would make our energy supply affordable and environmentally sustainable in the long term. Unfortunately, current technologies are still costly and not suitable for mass production. However, hydrogen remains a hot topic on the stock market. We take a look at the main actors in the H2 thriller.
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ISIN: ENAPTER AG INH O.N. | DE000A255G02 , NEL ASA NK-_20 | NO0010081235 , PLUG POWER INC. DL-_01 | US72919P2020 , FUELCELL ENERGY DL-_0001 | US35952H6018
"[...] 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.
Nel ASA - Turned just before the breakout
Nel ASA is and remains one of the darlings in the hydrogen segment. So far, the stock market has been ready to celebrate any small progress or order accordingly. However, it is known that the Company's sales are not quite enough to cover the enormous development costs. Therefore, the pressure on earnings remains high and is weighing on the share price performance on the stock exchange. It has been pointing downwards again for two weeks now after no chart breakout at the EUR 2 line.
Now the public is again looking at the operating side: After the Vattenfall joint venture in the steel sector had opened up some prospects for Nel ASA, and a fresh wind is blowing at the Hyon joint venture, all that is missing now are orders. And Jon Andre Løkke, as the newly elected president of the "Hydrogen Europe" initiative, is beating the drum for the products of the Norwegians.
The billion-dollar programs launched worldwide, such as Energy Earth Shot or the H2 Global Initiative, provide the space for positive development. Still, in addition to public funding, private investors are also needed. Switzerland will establish a green hydrogen filling station network by 2023, so the Norwegians are already set.
So as long as the boom phase continues, Nel will remain on investors' lists because of its brand recognition. However, make sure to put a stop at EUR 1.70 to still lock in profits in case of a further slowdown in the H2 segment.
Enapter AG - Reaching the goal faster with new funding
Enapter AG from Saerbeck in North Rhine-Westphalia is one of the few conspicuous stocks in the H2 segment in Germany. Nevertheless, the topic is considered by politicians to be one of the crucial technologies of the future. The Company raised EUR 17.8 million via a capital increase a few months ago and is now receiving EUR 5.6 million in funding for its new megawatt electrolyzers from the German Federal Ministry of Research.
Together with Münster University of Applied Sciences, the start-up thus intends to drive forward the development of the new "AEM Multicore" electrolyzers. These series-connected core modules are expected to produce about 450 kilograms of green hydrogen per day. The new product aims to further exploit the potential of anion exchange membrane (AEM) technology and create a cost-effective alternative compared to conventional megawatt-class electrolyzers. Enapter is largely responsible for the development work, while Münster UAS supports the products with laboratory tests.
Enapter stands for CO2 reduction and climate neutrality, and the growing global demand for energy is playing into the German Company's hands. The overvalued peer group has already corrected strongly, but investors still have great interest in Enapter. Our vote: Continue to build up stocks!
FuelCell - The share price remains in the cellar
A short recovery from EUR 6.5 to EUR 10.2 was granted to investors after the title rushed a full 70% down from the high at EUR 23. Now it is heading south again, although FuelCell can report some operational progress.
FuelCell Energy's 1.4 MW SureSource 1500™ biofuel cell project is now operational in California, USA. The site offers the only fuel cell platform approved by the California Air Resources Board (CARB) for on-site biofuel use. Commenting on the news, FuelCell Energy President and CEO Jason Few said, "We are delivering on our promise to the San Bernardino Municipal Water District, providing 1.4 MW of clean electricity and contributing to cleaner air quality in the region by capturing and using methane gas that would otherwise be flared." With the commercial operation of the California plants, FuelCell Energy expands its power plant portfolio by 1.4 MW to a total of 34 MW.
FuelCell's chosen path is the right one. It is just a pity that the share price remains in the cellar. The "time of the buying frenzies" is probably over, so the only thing that remains is the share's utopian valuation.
Plug Power - Rising competition for the top dog
Now there is also pressure on the Plug Power share. Many investors fear competition in the transportation business from a new partnership between two well-known players, namely Chart Industries and Hyzon Motors. These companies are cooperating from now on and have a sensational announcement in their luggage. According to reports, they want to develop a truck with liquid H2 fuel cell propulsion with a range of 1,000 miles.
Of course, Plug Power can also come up with good news. Renault and the fuel cell specialist have formed the announced joint venture called Hyvia and have given details of their H2 plans for light-duty vehicles. The Hyvia ecosystem includes green hydrogen production, storage and distribution.
Both of these topics are very interesting, as the transportation industry offers a lot of room for green improvements. Whether it will help Plug Power's stock is questionable from a chart perspective because the EUR 29 mark should have fallen here; currently, only the EUR 24 line offers significant support. If this breaks, the target of EUR 17 is in the room - minus 30% of today's price.
Currently, the wind is blowing cold in the face of the major hydrogen stocks. All the companies under review face the same issue: how to reconcile operational growth and the high valuation. Difficult, but Enapter is financing one of the most significant industrial projects in Germany.