Hydrogen Stocks: Are Nel and Plug Power on the way out? Is it better to bet on thyssenkrupp nucera and Pure Hydrogen?

Pure Hydrogen: Exciting stocks from the new hydrogen powerhouse

An exciting hydrogen story is currently unfolding in Australia with Pure Hydrogen. The country could play an increasingly strategic key role in the global hydrogen market, especially as a future exporter of green hydrogen. There is space for solar and wind farms, and ports for transportation are also available. According to CSIRO and Deloitte, Australia could cover up to 10% of global hydrogen demand by 2050 and generate AUD 50 to 70 billion per year in exports.

Pure Hydrogen is positioning itself in this market. The Australian company is currently building a hydrogen ecosystem. On the one hand, it offers hydrogen-powered commercial vehicles such as trucks (prime movers), buses, and garbage trucks, with a focus on in-house development rather than retrofits. Test vehicles have already been delivered to customers in Australia, and partnerships have been established in Vietnam, California, and Argentina. The current customer and partner base represents a delivery pipeline of over 1,500 vehicles.

At the same time, Pure Hydrogen is building a network of micro-hubs to produce green hydrogen locally and deliver it directly to fleet operators. The first micro-hub is currently being built at Archerfield Airport in Queensland, Australia. Here, an electrolyzer will be used to produce emission-free hydrogen for mobility applications and, in the future, for aviation. In addition to infrastructure, Pure Hydrogen also offers plug-and-play solutions, including mobile refueling stations, generators, and hydrogen pods. Through its 40% joint venture with Turquoise Group, the Company also produces CO₂-free hydrogen and graphene using methane pyrolysis, a process with the potential to be CO₂-negative when utilizing biomethane.

The Company aims to tap into huge markets with its expansion into North America and, in the future, Europe. With a current market capitalization of less than EUR 20 million, the stock – which is now also listed on the Frankfurt Stock Exchange – does not appear to be highly valued.

Nel: New momentum in the coming week?

Nel ASA still weighs in at almost EUR 500 million on the stock market. The Norwegians, of course, generate more revenue than Pure Hydrogen, but they also incur significantly higher losses and have not managed to establish a profitable business model over the past 10 years. As a result, expectations for the upcoming quarterly figures are low. Yesterday, Nel announced that it will report on its second-quarter performance on July 16. New momentum is unlikely.

Operationally, there has been nothing new from Nel for some time, especially after Samsung finalized its entry into the market in the spring. Accordingly, the euphoria surrounding the South Koreans' entry has also faded. Since the beginning of the year, the stock has been trading at around EUR 0.20. It only briefly rose above EUR 0.30 following the Samsung partnership.

The next short-term price driver could be possible subsidies in the US. After Plug Power received such support, there is speculation that the Norwegians could also secure a share of the billions. After all, Nel operates a site in the US state of Connecticut and is currently building a gigafactory in Michigan.

thyssenkrupp nucera: Important order

And how are things going at thyssenkrupp nucera? The German hydrogen hopeful recently announced an important order from Saudi Arabia. According to the announcement, Basic Chemical Industries (BCI) has commissioned the German company for the next expansion stage of its chlor-alkali plant in Jubail Industrial City. The order is valued at around EUR 15 million and includes the supply and provision of equipment, spare parts, and engineering services for the expansion of production. By using the latest BM2.7 single-element generation from thyssenkrupp nucera, chemical plants benefit from improved energy efficiency and performance thanks to innovative, energy-saving design elements.

In 2013, BCI signed its first contract with thyssenkrupp nucera's predecessors for the chlor-alkali plant in Dammam, followed by another contract in 2017 for the first phase of the Jubail project. The plant produces caustic soda, sodium hypochlorite, hydrochloric acid, and liquid chlorine for the local market, export, and special applications such as chlorine for water treatment.

thyssenkrupp nucera had previously announced the acquisition of parts of the insolvent Danish company Green Hydrogen Systems. Deutsche Bank expects this to bring new technologies into the Company. Analysts confirmed their "Buy" recommendation with a price target of EUR 12. However, there is not much upside potential. thyssenkrupp nucera shares are currently trading at EUR 10.36. For a good year now, the stock has been trading around EUR 10, with fluctuations ranging from EUR 8 to EUR 11.

When it comes to hydrogen stocks, the wheat is clearly separating from the chaff. Nel and Plug Power have burned through billions in recent years without being able to establish profitable business models. Although neither company is finished, neither presents itself as a compelling long-term buy. Despite the market volume in the billions, the pie is far from being divided up. This presents significant opportunities for newcomers like Pure Hydrogen. The Australians are not highly valued, but they have already achieved sales success and established global partnerships. If this continues, the stock still has significant upside potential. thyssenkrupp nucera has held up well amid the sell-off of the big players. With targeted acquisitions and exciting orders, the Company appears to be developing positively.