December 14th, 2022 | 11:58 CET
Hydrogen: Where things get tight, where opportunities lurk - NEL, First Hydrogen, Amazon
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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.
NEL: The competition is growing
The Norwegian company NEL is one of the pioneers in hydrogen production, storage and transport. Over the past few years, the Company has increased its sales and landed increasingly important contracts. This also gives hope to the entire industry. But the growing popularity of hydrogen is also attracting competition: Many industrial companies now have their own hydrogen business. Companies like NEL are thus losing a unique selling point.
It is, therefore, no wonder that NEL's share price is weakening more and more despite the operational progress. The Company is losing ground in the race for market share, and the chart has been showing a downward trend for months. The next relative low could take the value below the EUR 1 mark again. It appears that NEL's glory days are over.
First Hydrogen: Hydrogen stock with perspective
While NEL gradually loses in valuation, First Hydrogen is heading upwards. Why? The Company is focused on getting light commercial vehicles on the road with hydrogen. In order to do this, First Hydrogen relies on established bodies and the latest hydrogen technology. In the UK, potential customers have the opportunity to test First Hydrogen prototypes. At the end of November, it was also announced that the Company had selected the city of Shawinigan in the Canadian province of Quebec to become a production site for North America. "The encouragement from customers and the strong support from politicians in Quebec and Canada have convinced us that now is the time to move forward with this first project. Engineering studies are scheduled to begin in early 2023. Our announcement today coincides with the unveiling of our next-generation hydrogen fuel cell powered light commercial vehicle in the coming weeks," First Hydrogen Chairman and CEO Balraj Mann told Canadian website The Market Herald.
After climbing to around EUR 4.50 in late summer, the stock is currently hovering around EUR 3. As recently as the turn of the year, the stock was trading at EUR 1. Investors in First Hydrogen are betting on the Company's prospects. Light commercial vehicles, in particular, lend themselves to being converted to hydrogen. Fleets of logistics service providers are also regularly renewed, so a large market is waiting here. Since lower CO2 emissions are hard cash for companies, innovative solutions, such as those from First Hydrogen, are coming into focus.
Amazon: More global corporation remains interesting
Retail giant Amazon has long been convinced of hydrogen. Last summer, the Company signed a contract with Plug Power to supply hydrogen and, at the same time, took a stake in the hydrogen innovation leader. For Amazon, entering the hydrogen business makes sense: Huge logistics centers offer space for PV systems, and the Amazon fleet would become CO2-neutral with hydrogen drives. Last week during the 5th International Investment Forum (IIF), First Hydrogen confirmed that it was in talks with big names in the industry - but was unable to provide more detailed insights. Whether such an acquisition would be worthwhile for Amazon or whether the retail giant, which is also a tech company, would set up a hydrogen vehicle business itself is uncertain.
Amazon shareholders are likely to benefit only marginally from a possible hydrogen division anyway - Amazon's core business is too big. Although the stock has suffered significant losses for the past year, the value can already be attractive again for long-term investors - Amazon is, and remains, a global corporation that will still have a solid business in decades. First Hydrogen also has the potential to rise. The Company is gradually ramping up its hydrogen vehicle business and making steady progress. While there are risks associated with such growth stories, investors looking to seize opportunities should keep First Hydrogen's stock on their radar. On the other hand, the situation with NEL is more complex: Despite operational progress, the share price is weakening. It may be better for investors to keep their distance here.
Conflict of interest
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