November 29th, 2022 | 11:10 CET
Hydrogen from Qatar: Nel, Plug Power, dynaCERT and ThyssenKrupp, winners in H2 fever!
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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
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 and Plug Power - Will the rally go on?
Hydrogen technology is gaining momentum for dynamizing global climate protection efforts. Even the Emirates have decided to invest in modern energy generation methods alongside their abundant fossil reserves. The Desertec project launched at the turn of the millennium has now given rise to the world's largest solar power plant on the Arabian Peninsula. The energy is to be used to produce exportable hydrogen. In addition to soccer, the Emirates is extremely modern and wants to play a leading role in future technologies. This is a good opportunity for the protagonists in the USA and Europe to step on the gas when it comes to H2. According to Goldman Sachs, the hydrogen sector could be a USD 12 trillion matter by 2030. Analysts at Bank of America and Morgan Stanley see the train moving slightly slower, expecting green hydrogen to represent more than USD 11 trillion in sales by 2050.
Nel surprises in the US with a mega deal. Its US subsidiary NEL Hydrogen US has agreed to a strategic partnership with General Motors, the largest US automaker. The aim is to drive the innovative proton electrolyzer platform forward on an industrial scale as quickly as possible. The hydrogen company is to be helped in this by GM's great expertise in fuel cell technology. NEL, for its part, is contributing its experience in electrolysis so that a common way can be found to offer renewable hydrogen as competitively as possible.
The NEL share has already gained 50% since October due to bulging order books. However, its competitor Plug Power lagged after disappointing figures and continues to consolidate in the EUR 14 to 15 range; investors have long forgotten the high from 2021 at around EUR 60. Many analysts corrected their partly euphoric expectations for Plug drastically downwards. In a direct comparison, Nel is also clearly ahead of the Americans in terms of chart performance.
dynaCERT - Closer and closer to the goal with emission certificates
The Canadian manufacturer of hydrogen aggregates for reducing carbon emissions, dynaCERT, is moving forward with great strides. Unfortunately, there were some delays and restrictions in the middle of the year due to the Corona pandemic, which caused the roll-out of the HydraGEN technology developed and patented by dynaCERT to reduce CO2 emissions. However, the Company used this time to set up global sales with partner H2 Tek LP and refine the technology. H2 Tek has already achieved greater success with mining companies such as Vale S.A., Nexa Resources, CODELCO and Antamina. Particularly in the case of mining companies, the ESG orientation of the business policy is an important course to set in order to attract institutional investors in the medium term.
dynaCERT is close to completing the certification phase of Verra's Verified Carbon Standard (VCS) program, the world's most widely used greenhouse gas crediting program. It will provide customers with a closed-loop ecosystem to avoid harmful climate gases in the future while offering an additional revenue opportunity through certificate trading. For large fleets, a broad implementation of dynaCERT technologies can thus lead to high additional revenues. At the moment, Verra, Earthood and dynaCERT are working hard to finalize the VCS procedure so that dynaCERT can issue the popular emission certificates for its innovations.
The VCS certification would open up a highly scalable new business field with recurring revenues for dynaCERT. In order to generate the necessary clout for the international roll-out, the cash of dynaCERT is to be increased once again. The refinancing will take place without dilution for shareholders in the form of a 10-year emission certificate convertible bond, which is expected to raise up to CAD 10 million in a private placement. The bond is particularly suitable for ESG-oriented portfolios of institutional investors. From the fifth year after the issue date, the convertibles can be converted at any time at the holder's discretion into emission certificates generated by dynaCERT's proprietary HydraGEN technology. Trading is conditional upon the completion of Verra's Verified Carbon Standard program.
With the recent announcements, the ongoing consolidation of the share price in the range of CAD 0.20 to 0.22 should soon be history. The bond placement will enable the Company to finance its medium-term expansion targets. The expected VCS certification puts dynaCERT in a new league of international significance.
The CEO of dynaCERT, Jim Payne, will be taking questions from investors on December 7, 2022, on the occasion of the 5th IIF - International Investment Forum. Participation in the virtual event is free of charge.
ThyssenKrupp - At the forefront of industrial hydrogen
After years of a downward trend in the ThyssenKrupp share, the traditional German group is getting a new lease of life with the topic of hydrogen. With its hydrogen subsidiary Nucera, the Duisburg-based company can implement major projects for alkaline electrolysis worldwide. This new business area holds out hope and could help the former steel giant return to solid growth. Currently, the valuation of ThyssenKrupp AG is more than disappointing for most players. Despite the well-maintained fiscal year 2021/2022 with strong sales and earnings growth, the Company is still valued as a cyclical steel group. Not very refreshing, as the energy-intensive steel division faces more difficult years with falling demand and skyrocketing production prices. Major shareholder Cevian, which had held a historic 18% stake since 2013, recently divested almost all of its holdings. That put the share under constant pressure on the stock market until the share finally fell below the EUR 5 mark.
Now the preparatory costs for a possible IPO are weighing on profits at the subsidiary Nucera. The plant engineering company specializing in electrolysis, a joint venture between the Ruhr Group and Italy's De Nora, recently saw its EBIT slump by 67% to EUR 9 million. This was largely due to the one-off costs incurred in preparing for the IPO, which has since been postponed. However, sales rose by a pleasing one-fifth to EUR 383 million.
Due to the Group's currently fragile condition, US bank JPMorgan has left its rating for ThyssenKrupp at "underweight" with a price target of EUR 5.10. The consolidation could take some time after these reports, even though Nucera will certainly play a leading role in industrial hydrogen in Germany. ThyssenKrupp shares should therefore remain on the watch list.
Hydrogen stocks always have their charm, as their relevance in the fight against atmospheric warming is obvious. Some stocks have bounced back, with ThyssenKrupp and dynaCERT already in the starting blocks due to their good positioning.
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