Hydrogen stocks make a comeback and attract billions in investment! Nel ASA, Nordex, First Hydrogen

First Hydrogen: Is the stock set to take off now?

Strong week for First Hydrogen. On Monday, the Canadian hydrogen company announced the establishment of a German GmbH and the associated expansion in continental Europe – the Company has been successfully operating in the UK for some time. On Friday, the Bundestag approved the EUR 500 billion infrastructure package. Of this enormous sum, EUR 100 billion is to flow into the Climate and Transformation Fund (KTF). This should give new impetus to the expansion of renewable energies, and, in particular, the faltering hydrogen issue should gain momentum. This should also benefit stocks in the sector, which have recently been clearly overshadowed by armaments, AI, and the like.

With the new German subsidiary, First Hydrogen is advancing its strategy of exploiting Germany's and the European Union's leadership position in the fields of renewable energies and hydrogen. In particular, green hydrogen is expected to help successfully decarbonize energy-intensive industries in Germany and achieve national climate targets. By 2030, between 50% and 70% of the forecast demand of 95 to 130 terawatt hours (TWh) is expected to be met by producing hydrogen and importing it and its derivatives, such as ammonia and methanol, in Germany.

First Hydrogen aims to contribute to this with a stable, scalable, and cost-effective supply of green hydrogen. The Company also wants to integrate small modular nuclear reactors ("SMR") into production. This is currently probably the most exciting topic in the hydrogen sector. It remains to be seen what the new German government's position on this is. What is certain is that the European Union has awarded nuclear energy a "green label" as part of its taxonomy. And worldwide, nuclear energy is also an essential part of the decarbonization strategy. First Hydrogen CEO Balraj Mann commented: "Germany has approved plans for a EUR 19 billion, 9,040-kilometer hydrogen network that is to be fully operational by 2032. This core network will connect industrial hubs, such as steel producers, that are seeking to decarbonize. SMRs offer the flexibility to produce green hydrogen and are able to provide low-cost electricity."

Last week, First Hydrogen's stock was unable to benefit from the improved environment for hydrogen stocks. The stock is also being actively traded in Germany on Tradegate and is currently trading at EUR 0.256. By way of context, at the beginning of 2024, the price was still above EUR 1. The potential is correspondingly high if the sector makes a comeback on the stock market.

Nel shares make a strong comeback

The shares of Nel ASA made a strong comeback last week. Within three trading days, the shares of the struggling hydrogen pioneer almost doubled. Even though the price level of EUR 0.32 was not maintained and on Friday it was still EUR 0.24, shareholders can breathe a sigh of relief for the time being.

The reason for the excitement? On Wednesday, Nel announced Samsung's entry. As part of a strategic partnership, the South Korean conglomerate is acquiring a 9.1% stake in Nel, making it the largest single shareholder. To this end, Samsung is subscribing to a capital increase by Nel with a volume of around NOK 353 million. Nel is a market leader in alkaline and PEM electrolyser technology. With the new cooperation agreement, Nel sees itself on the right track to further expand its global supply capacity and strengthen its overall competitiveness.

Hong Namkoong, CEO of SAMSUNG E&A: "Nel is a market-leading electrolyser company and the only company with competitive technology for alkaline and proton exchange membrane electrolysers with a 100-year history. We are very pleased to announce our partnership with Nel."

Nordex: Goldman Sachs sees 40% upside potential

On Friday, the stock reacted to the German government's 100 billion package for renewable energies with a price jump of over 10% at times. Even though the day ended with a gain of 3.8%, shareholders can hope that the Nordex share will again become the focus of the capital market.

At the beginning of the week, a new study by Goldman Sachs had already provided positive impetus for Nordex shares. The analysts raised the fair value from EUR 20.10 to EUR 22.60 and recommended buying the shares. The reasons for this are the annual figures published in February. The analysts view these as positive. They also see the trend as likely to continue this year, with margins widening further in the coming years. On Friday, Nordex stock closed at EUR 16.24. Thus, Goldman Sachs sees further upside potential of around 40%.

Over the past week, sentiment for stocks in the renewable energy sector has improved noticeably. Whether this was just a short-term impulse or the start of a sustainable trend remains to be seen. In any case, First Hydrogen is valued low and is currently expanding into a very exciting area with green hydrogen from nuclear energy. Samsung's investment in Nel was a sensation and positive for the entire industry. Nordex is likely to benefit from the billions being invested in Germany. However, it remains to be seen how quickly new wind farms can actually be built.