June 23rd, 2021 | 13:14 CEST
FuelCell, NEL, Enapter - Hydrogen on the rise again!
Table of contents:
"[...] 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.
FuelCell - It is just not happening
The major goals of the Paris Agreement will only be achieved if hydrogen also takes its place within the green energy policy. But, unfortunately, while this is being strongly subsidized, political attention is nowhere near as strong as in other sectors.
FuelCell has been on a bumpy ride for several months now. The share price has also fallen by three times since the beginning of the year. After the current earnings debacle, FuelCell can now pick up the pieces again because the quarterly report strengthens the critics. Analysts surveyed by FactSet had expected the Company to post quarterly revenue of USD 18.9 million. However, the actual performance was USD 14 million, down 26% from the estimate and even lower than the previous quarter. The loss came in at USD 0.06, just below the consensus of USD 0.05. From our perspective, the 1.5% decline in orders also qualifies as dire.
One small bright spot: The US Department of Energy awarded FuelCell USD 8 million in a Phase 2 grant to further develop the Company's solid oxide platform. Fair enough, but overall, unconvincing. We maintain our skeptical stance for now.
Nel ASA - Skeptical outlook despite a good pipeline
At Nel ASA, better and better sales tickets are coming to light, but the big punch is still out of reach. Most recently, Nel had to watch as large electrolysis orders could not be landed. With green steel, however, it is now in the game. Strong partners such as Ovako, Volvo, Hitachi ABB and H2 Green Steel are ready to implement green hydrogen in steel production and convert transport & logistics to hydrogen drives. In Hofors, Sweden, a steel production plant is now to be converted to CO2-free. In the first step, this means achieving a 50% reduction in emissions.
However, analysts are still very skeptical following the halving of the share price since February. Thus, the experts at Arctic lowered their price target from the equivalent of EUR 3.43 to EUR 1.77; the vote is Hold. The investment bank expects that the increased demand for hydrogen technology will lead to more players in the industry. The expansion of the green investment universe to include more stocks sparks increased competition for investor capital, and refinancing costs rise.
Overall, Nel is in a very challenging environment. Valuations remain high and the share price will have to adjust meticulously to operating figures. We are tending to remain cautious in light of the upcoming release in July.
Enapter AG - The campus is planned and financed
Germany's Enapter AG is also considered a key stock in the green hydrogen environment. In the first quarter, the Company managed to increase its capital by EUR 17.8 million. With this money, the Company can now go all out for the new production site. In addition, the state of North Rhine-Westphalia is funding Enapter with more than EUR 9 million to set up a mass production facility for hydrogen electrolyzers. After a manageable planning phase, the construction of the production facility in Saerbeck is scheduled to begin in the fall.
The energy turnaround and political will are driving the engineers at Enapter because they want to make green hydrogen as inexpensive as possible so that, in the end, there is also a favorable economic calculation for the customer. After all, what is the use of scientifically advanced technology if the result in the overall eco-balance does not provide any real added value in the German energy mix?
The World Economic Forum has already honored Enapter AG and its revolutionary AEM electrolysis technology as "Technology Pioneer 2021." With this award, the Forum honors companies that make a decisive contribution to the economy and society through innovative technology.
So far, so good. The Enapter share is recovering brilliantly from its temporary weakness and is once again heading for the EUR 30 mark. It is, therefore, in line with the trend of the H2 peer group. So if you want to bet on the energy transition "Made in Germany," Enapter is the right place to be.
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