May 30th, 2023 | 08:30 CEST
Hydrogen drumbeat - where things can move quickly now: Plug Power, NEL, dynaCERT
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"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
NEL and Plug Power: Things are moving forward - shares are already expensive
Scrolling through the corporate news of the Norwegian hydrogen specialist NEL, one can already see that things are moving forward with concrete hydrogen projects. While the Norwegians landed relatively small orders a few years ago, NEL is now turning a bigger wheel. At the beginning of May, they announced the construction of a hydrogen factory in the US state of Michigan for USD 400 million. The project is located near General Motors in Detroit. Both companies have been working together for some time.
Such projects should not obscure the fact that the Company, valued at around EUR 2 billion, is still not making a profit and is increasingly facing competition from other companies. Companies such as BP are now also making money in hydrogen. In Australia, for example, the oil multinational has bought a 23,000-hectare site to install PV systems and ultimately produce green hydrogen. Even hydrogen legend Plug Power, which has been striving for decades to make a profit with its business, is far from without competition. The Company continues to burn capital to maintain its growth trajectory. Most recently, it was announced that Plug Power can draw on further funds to support its current course until at least 2024. This news brought relief to the stock market and sent Plug Power's share price upwards.
dynaCERT: Large order speaks for revaluation - more news in the pipeline?
The Canadian hydrogen company dynaCERT also saw its share price fire up this week. What happened? On Friday, the Company announced a large order for 3,000 HydraGEN units for the oil and gas logistics company Bristol & Bristol Inc. in Guyana. Initial partial payments have already been made, with further units to be delivered by July 30 and September 30. The major order is significant for dynaCERT because the Company has been working for years to achieve a commercial breakthrough. At the end of last year, dynaCERT was able to report orders from the mining sector and indicated a positive response from potential customers.
The recent major order announced by dynaCERT demonstrates that they are not just making empty promises. As stated by dynaCERT at the International Investment Forum (IIF), production is currently running at full capacity. It includes high-priced HydraGEN units, such as those needed in heavy machinery in mining. Given the recent market capitalization of only around EUR 61 million, the chances are good that the dynaCERT share will also complete a turnaround. A few days ago, the stock was trading at a level suggesting insolvency rather than an operational breakthrough. Since then, the share has shot upwards but is still only trading at the level of last autumn. With dynaCERT successfully raising capital about six weeks ago, announcing a letter of intent with Cipher Neutron for the supply of electrolyzers, and now also scoring points in the market with its diesel conversion kits, investors should have the stock on their radar.
Is this the gamble of the year?
While Plug Power and NEL are valued at EUR 4.6 billion and EUR 2 billion, respectively, dynaCERT's market valuation of around EUR 61 million can be an excellent opportunity to make significant and quick profits. For months now, dynaCERT has also been awaiting certification by Verra - which would allow dynaCERT to generate CO2 certificates with its HydraGEN technology. The current plan is for customers and dynaCERT to share the generated certificates. That means that 50% of the certificates are to remain with dynaCERT - in perspective, this could be another additional income stream for the Company.
Many signs point to a comeback for dynaCERT. Courageous investors can follow the development, but increased volatility is to be expected. In return, a positive trend beckons in the short term, which could escape any influences from the market as a whole and ensure a dynamic upward movement.
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