Hydrogen shares: New favourites First Hydrogen and PNE instead of Plug Power and ITM Power?

First Hydrogen heading for the mass market in 2023?

The opportunity for hydrogen in the commercial vehicle sector is huge. That is because it is a clear mandate from policymakers: the transportation sector must drastically reduce greenhouse gas emissions over the next few years. In Germany, for example, the share of alternative fuels in light and heavy commercial vehicles is likely to remain in the low single-digit percentage range. This is a big opportunity for First Hydrogen. The Company aims to become the leading manufacturer of zero-emission, long-range hydrogen-powered commercial vehicles in the UK, EU and North America. In the current year, the Company should take important steps toward the mass market.

The analysts at researchanalyst.com expect the newsflow to remain positive. The demonstration vehicles were successfully tested in 2022, and road approval has been obtained in the UK. From the beginning of 2023, customers will be able to test the vehicles on the roads in everyday use. The customers are at least 13 UK fleet operators across various industries, including telecoms, utilities, infrastructure, delivery, grocery and healthcare.

At the same time, First Hydrogen is working on the next generation of vehicles. The recently unveiled designs can be scaled to different vehicle heights and lengths. That should make the vehicles suitable for various applications: Express delivery, grocery stores, construction and utility work, or emergency services. In addition, First Hydrogen is working to extend the value chain. With a "Hydrogen-as-a-Service" model, the Company also wants to offer a hydrogen refueling system in the future, among other things, and enter into the production and distribution of green hydrogen. Hence, researchanalyst.com expects a positive news flow. There may be news as early as February 15. That is when First Hydrogen's CEO will present at the 6th IIF- International Investment Forum. Registration for the virtual event is free of charge.

PNE AG: New impetus from green hydrogen

Green hydrogen is also attracting PNE AG. As a first step, the Company wants to establish a production of green hydrogen and ammonia in South Africa together with OMNIA GROUP. The new ammonia production is to be based on renewable energy from hybrid sources. PNE's local subsidiary is to develop the necessary plants, which will combine wind and solar energy generation with ammonia production. The goal is to produce competitive green ammonia in the order of 100,000 tons per year. That would result in a saving of 180,000 t of CO2 emissions per year. PNE CEO Markus Lesser: "We are pleased to have found an experienced partner in OMNIA, with whom we can jointly drive this important climate protection project forward. Green hydrogen and its downstream products are key to supporting South Africa's decarbonization and energy transition goals while unlocking sustainable growth opportunities. For our group of companies, this is also an important step in implementing our growth strategy, Scale up 2.0."

Seelan Gobalsamy, CEO of OMNIA: "As a diversified chemical group supplying chemicals and speciality solutions to the agriculture and mining sectors, we are constantly looking for ways to add value to our customers throughout our supply chain. Innovation and environmentally friendly technologies are at the heart of our approach. The on-site production of green ammonia will significantly reduce our CO2 emissions, embed sustainability in our products, and support the country's path to green energy."

ITM Power with signs of life thanks to RWE and Linde

Top dogs Nel and Plug Power struggled in 2022 with many problems. Supply chain problems and order postponements led to slower growth. At the same time, both companies are posting high losses. This is also true for ITM Power. In January, the electrolysis specialist from the UK had to publish another revenue and profit warning for fiscal year 2022/23 (ending April 30). Sales are expected to be lower, and the EBITDA loss is higher than expected. Now ITM has at least reported an attractive order. It is to supply two 100 MW PEM electrolyzers to Linde Engineering. Both plants are to be built at a site in Lingen operated by the energy group RWE. They are to be fed with offshore wind from the North Sea to produce green hydrogen. The 200 MW are intended to help RWE achieve its expansion target of at least 2 GW of electrolyzer capacity by 2030. For ITM Power, the order is a milestone towards mass production.

ITM Power CEO Dennis Schulz said, "We are proud and honoured to have been selected as the electrolyzer supplier for this important milestone project. Strategically, it allows us to move into volume production with confidence and determination."

Hydrogen will have its place in the energy mix of the future. Which companies will benefit is far from certain. Since 2022, the wheat has been separating from the chaff. It seems prudent for investors not to focus only on well-known pure plays such as Nel, Plug Power and ITM Power. The companies have revealed too many trouble spots for that. First Hydrogen could capture the mass market in 2023. If so, the stock would be anything but expensive, with a market cap of CAD 200 million. PNE can use new impetus well after the end of the takeover speculation. As a producer of renewable energy, the Company is predestined for green hydrogen.