October 6th, 2022 | 12:44 CEST
Hydrogen - the fuel for transportation and logistics stocks: Plug Power, dynaCERT, ThyssenKrupp, and Daimler Truck with imagination
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"[...] We are committed to stay as the number one Canadian and global leader in the Hydrogen-On-Demand diesel technology [...]" Jim Payne, CEO, dynaCERT Inc.
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.
Plug Power - An opportunity again at a reduced level
Hydrogen technology now seems to be gaining momentum for energizing our climate change efforts. Joe Biden has had to negotiate long and hard, but as of late summer, his Climate & Health Bill is in the history books at over USD 430 billion. Biden's original plans for climate protection and social reforms were among the core projects of his term in office. As a result, the enacted package is one of the most comprehensive US investments to combat climate change since Barrick Obama defined the initial guardrails.
The climate protection measures included are intended to reduce harmful CO2 emissions in the USA by around 40% by 2030 compared to 2005. It is no coincidence that major corporations like Amazon are coming forward to boost their brand presence with a breeze of green commitment. In addition to a stake in Plug Power, the tech giant ordered H2 forklifts for its logistics centers. Such lighthouse orders create room for imagination. And Plug can come up with further highlights with the help of its cooperation partner Lhyfe. Under the project name "Sealhyfe", the first 1MW offshore electrolyzer using only wind power was commissioned in Saint-Nazaire, France.
The Plug Power share was able to cushion the volatile months of August and September quite well, as GreenTech attracted a lot of attention due to the energy crisis. However, price levels at EUR 30 were used for profit-taking and led to new markdowns to currently EUR 23. Technically, the critical catch-up zone lies between EUR 15 and 20. Here there are renewed opportunities for momentum traders. Fundamentally, the share is still not cheap.
dynaCERT and Daimler Truck - IAA Transportation points the way forward
For the Canadian technology company dynaCERT, there have recently been some noteworthy successes in the distribution of its hydrogen solutions HydraGEN and HydraLytica. The ready-to-sell solutions reduce emissions from diesel vehicles and couple operational data with recording via software for later receipt of carbon credits. For the first time in years, the industry is shifting its focus away from electromobility and toward hydrogen solutions. The reason is obvious: electromobility, like fossil energy, is still strongly linked to the availability of energy sources. But now that these are lacking and electricity prices are constantly climbing, the cost of operating e-vehicles has more than doubled. The economic advantage over fuel-burners is thus fed more by tax savings.
As a result, the search for alternatives is underway, and that alternative is hydrogen. The technology of dynaCERT is a H2-on-demand solution which can transform already existing fleets into a world with reduced climate gases. What is missing, of course, is the mass production and distribution of green hydrogen. Also boosting dynaCERT could be the expected certification of its technology by VERRA. VERRA's global standards and frameworks serve as a linchpin for channeling funding into activities that address some of our time's most pressing environmental issues. And anyone familiar with the truck density on North America's freeways can readily appreciate the dimensions for potential energy savings.
At Daimler Truck, tests with a hydrogen fuel cell truck are already underway. The technology is expected to be ready for series production by 2028, and a decision on whether to go ahead with it at all has probably already been made with a vote in favor of liquid hydrogen. While the life cycle of a passenger car covers around 300,000 km and 8,000 hours of operation, a 40-ton truck covers a total of 1.2 million km and 25,000 hours. In the driver's cab of the Daimler GenH2 truck, you can experience how quietly, smoothly and unspectacularly the fuel cell tractor unit can be moved. And all this with a zero climate footprint if the hydrogen can be generated with green energy. Lots of future dreams, but also the first tangible results in a highly dynamic market.
Both dynaCERT and Daimler Truck have experienced a significant downward movement on the stock market. In the case of Daimler, the EUR 22 mark is important from a chart perspective, but there is no urgent need to buy yet due to imminent recessionary tendencies. At dynaCERT, on the other hand, it could go up very quickly because of VERRA. An initial 120% price reaction from the low has already occurred.
ThyssenKrupp - Where hydrogen is already making its mark
The ThyssenKrupp Group provides a good example of hydrogen in action. The H2 subsidiary Nucera, which until recently was called Uhde Chlorine Engineers, has been developing large-scale hydrogen production plants for several years. The Company, headquartered in Dortmund, Germany, is targeting sales of up to EUR 1 billion by 2026. Most recently, Nucera generated revenues of EUR 319 million and EBIT of EUR 27 million. With its approximately 400 employees, the Company is already profitable today, which is not necessarily common in the industry.
Because of the poor state of the market, Thyssen recently postponed Nucera's IPO indefinitely. The estimates of banking experts from the IPO valuation ranged from three to six billion euros in early 2022. In a commentary, Bank of America valued the ThyssenKrupp package of 66% at EUR 2.3 billion, bringing the total company to a low EUR 3.4 billion. Given the shrunken stock market values of Plug Power and Nel ASA, the sales factor of 10 would probably no longer be feasible today. In a recurring IPO environment, ThyssenKrupp could plan another attempt, but when this will come is perhaps written in the stars. TKA shares are only trading around 12% above their low for the year, but in a recent study, Citibank sees the steel sector in the black. Due to ThyssenKrupp's broad positioning, the bombed-out stock should be kept in mind.
Hydrogen stocks always have their charm because their relevance in the fight against global warming is evident. Currently, the sector trends are still negative, but that can change again quickly. Positive special movements in the share price, as was recently the case with dynaCERT, are always possible and can also be expected if the news situation is right.
Conflict of interest
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