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January 30th, 2024 | 07:00 CET

Hydrogen Rally 3.0 - Is it starting now? Nel ASA and Plug Power with technical rebound opportunity, dynaCERT on the verge of certification

  • Hydrogen
  • greenhydrogen
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Is there now a possibility of a technical rebound in the hydrogen sector? This is a legitimate question for keen observers, as popular hydrogen stocks have remained on the sidelines since the beginning of the year. However, there have been signs of a noticeable stabilization in the H2 standard stocks in recent days. The second-line stocks are also attractive, as the focus is on special applications that use hydrogen to optimize fossil combustion processes. Whether the sector as a whole will experience a wave of investment in 2024 nevertheless remains an exciting question. Where are the opportunities for investors?

time to read: 4 minutes | Author: André Will-Laudien
ISIN: NEL ASA NK-_20 | NO0010081235 , PLUG POWER INC. DL-_01 | US72919P2020 , DYNACERT INC. | CA26780A1084

Table of contents:

    Nel ASA - Not out of the woods yet

    The sharp share price losses at Norwegian hydrogen pioneer Nel ASA are now being compounded by operational doubts. For a long time, the Company maintained its relatively high valuation on the stock exchange, with investors relying on the green billions from Brussels. But these major orders never came. Worse still, some of the last orders were even canceled because they could not be financed. Investors are bitterly aware that the large-scale rollout of the "alternative energy savior" will take longer to materialize.

    Analysts are, therefore, turning their thumbs down further. The experts at Fearnley Securities have reduced their price target for the Nel share from NOK 5.80 to just NOK 4.00. The stock was downgraded to "Sell" at the end of November, and the rating remains unchanged. 8 out of 25 analysts on the Refinitiv Eikon platform now have a "Sell" rating, and the average 12-month price target is only a low NOK 8.20. Exactly 3 years ago, the stock stood at NOK 33; yesterday, it was just NOK 5.23. Our remaining advice: Stay on the sidelines until the Company provides fundamental reasons for a turnaround.

    Nel ASA is still desperately searching for a technical bottom. The NOK 5.00 mark could prove to be a point of reference for the coming months, as this is where the share stood precisely 5 years ago. Source: Refintiv Eikon from 29.01.2024

    dynaCERT - Hydrogen from Paris to Dakar

    The situation is different with hydrogen applications, which can already generate a decisive cost advantage for their users. The Canadian company dynaCERT has practical add-on devices for improving diesel combustion in heavy engines. This technology has now also been successfully tested in racing mode. The French team's #915 MAN Dakar Classic Rally race truck was equipped with a dynaCERT HydraGEN HG1 unit, which supplied the truck's engine with hydrogen and additional oxygen. The team secured third place in the classification.

    Alexandre Lemeray, Holeshot Competition team driver, explained: "The HydraGEN unit worked very well during the almost 8,000 km race. Our team proved the performance of the dynaCERT hydrogen production units in an environment with hot weather, hard impacts and vibrations, sand, shocks, unusual angles and a demanding operating mode."

    Good news for the innovative company from Toronto. The current capital increase at CAD 0.15 has been extended by 30 days in an investor-friendly manner. A total of CAD 3.855 million of the targeted CAD 6 million financing has already been raised. The share price currently remains at CAD 0.16 during the placement phase. In our opinion, the attached warrant with a basis of CAD 0.20 and a term of 36 months is also very attractive. Attention: Certification by VERRA could be announced any day now. Therefore, investors should consider buying at a low price while this news is still pending!

    CEO Jim Payne will report on the latest progress at dynaCERT and answer questions live at the 10th International Investment Forum on February 21, 2024, at 16:00 CET. Click here to register

    Plug Power - A quick capital increase of USD 1 billion

    When it comes to Plug Power, opinions are divided. The share price dropped to USD 2.45 when the management announced a USD 1 billion financing via the stock exchange. The shares will not be offered to existing shareholders but placed on the market by investment banks "at the best price". Plug Power needs additional equity capital, as the largest US hydrogen power plant will soon launch in Georgia. A USD 1.6 billion credit line from the Department of Energy (DOE) is required for the overall planning of the Giga plant. However, this is, in turn, tied to sufficient equity capital.

    Analysts are getting nervous because, given the gigantic capital requirement, CEO Andy Marsh is still dependent on the scolded shareholders staying on board. Morgan Stanley analyst Andre Percoco sees both opportunities and risks at this level; Citigroup cut its target price from USD 5.00 to USD 3.25 following the announcement of the capital measure, even talking of a "continuing existential crisis" at the Company. Piper Sandler argues that USD 1 billion will likely not be enough to finance operations over the next 12 months. Despite all the prophecies of doom, the share price rose again yesterday by almost 8%. Traders may be having fun, while millions of investors face heavy losses.

    The chart of Plug Power still looks quite bleak, if not for the two green weeks in January 2024 and the increasing volume. The momentum could also turn around soon. Source: Refintiv Eikon from 29.01.2024

    The hydrogen sector is currently struggling to keep its feet on the ground. While the major producers of electrolysers, such as Nel ASA and Plug Power, are waiting for public orders, dynaCERT keeps landing international orders. VERRA certification for the issue of emission rights is also on the agenda here.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
    For this reason, there is also a concrete conflict of interest.
    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    André Will-Laudien

    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.

    About the author

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