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March 31st, 2022 | 12:31 CEST

Is the gas dispute escalating? What are Nel, RWE and First Hydrogen doing?

  • Hydrogen
Photo credits: pixabay.com

Germany is preparing for a possible gas shortage with an "early warning" phase. Yesterday, Economics Minister Robert Habeck activated the early warning phase of the so-called Gas Emergency Plan due to a possible deterioration in the supply situation and put together a crisis team. Habeck: "There are currently no supply bottlenecks. Nevertheless, we must increase preventative measures to be prepared in the event of an escalation by Russia." The background to this is Russia's announcement that it will only accept rubles for gas deliveries in the future. Once again, this highlights the urgent need for Germany to become independent of Russian gas supplies. Companies such as the utility RWE and the hydrogen specialists Nel and First Hydrogen are providing support on this path. The shares offer interesting opportunities.

time to read: 4 minutes | Author: Fabian Lorenz
ISIN: NEL ASA NK-_20 | NO0010081235 , RWE AG INH O.N. | DE0007037129 , First Hydrogen Corp. | CA32057N1042

Table of contents:


    First Hydrogen: Enormous potential with hydrogen utility vehicles and filling stations

    First Hydrogen is still relatively unknown but has an exciting technology and strong partners. An analyst report describes the Canadian Company's "best-of strategy" based on promising prospects. First Hydrogen aims to become the leading manufacturer of zero-emission, long-range hydrogen-powered commercial vehicles in the UK, EU and North America. This market is developing very dynamically. Between 2020 and 2027 alone, experts at Allied Market Research expect growth of 21.4% per year. During this period, the market volume is expected to grow to USD 41.2 billion per year.

    Currently, First Hydrogen is developing its "Utility Van," a light-duty commercial vehicle, relying on the integration of existing technologies and a proven chassis. On-road testing is scheduled for June of this year. Delivery for road use could start as early as September. Through cooperation with two global market leaders, production will then be ramped up to deliver between 10,000 and 20,000 units of the utility van per year. The partners are two global market leaders. Ballard Power, one of the world's leading fuel cell specialists, is providing support for the technology. For the design, First Hydrogen is working with AVL Powertrain Limited. It is the world's largest independent development, simulation and testing company in the industry.

    First Hydrogen is also entering the refueling station business. After all, the demand for hydrogen refueling stations is enormous. With only 83 facilities, Germany led Europe by a wide margin in 2020, according to the automotive association ACEA. Of course, these are not enough for nationwide coverage. In this area, First Hydrogen is collaborating with FEV Consulting GmbH from Aachen. The two companies will jointly design and build the prototype for a customized hydrogen refueling station. According to analysts, First Hydrogen should quickly move to a higher valuation level if management reaches the targeted 10,000 units by 2025. The hydrogen refueling station segment also has enormous potential. The full report is available at researchanalyst.com.

    RWE: Shareholder puts the pressure on, and Goldman Sachs issues a buy recommendation

    RWE is focusing on renewable energy sources. By 2040, the Company wants to convert its electricity production to climate neutrality. The Group is thus focusing on energy generation from wind (offshore and onshore), solar, hydro, biomass and gas. Nuclear and coal are no longer part of the core business. Currently, an activist shareholder is calling for the spin-off of the coal business. A vote on this is to be held at the Annual General Meeting. RWE's management recommends rejecting the motion. The spin-off is not a strategically promising option. There are more promising alternatives, such as a spin-off into a foundation. Most analysts are convinced by the RWE share. Yesterday Goldman Sachs reduced the price target slightly from EUR 53 to EUR 52, but it remains well above the current level below EUR 39. Earlier, the Royal Bank of Canada (RBC) had raised the price target for RWE shares from EUR 46.50 to EUR 50. RWE has, on the one hand, activities in the field of renewable energies and, on the other hand, thermal power plants that can be used flexibly. According to analysts, the energy group thus has the best of both worlds to offer for the energy turnaround. Therefore, RBC increased the profit expectations for the DAX group for the next two years by up to 8%.

    Nel share consolidated

    One great hope to reduce dependence on Russian gas is hydrogen. The EU's goal is to increase the use of hydrogen to around 20 million metric tons per year by 2030. According to Bloomberg Intelligence, green hydrogen could cover about 12% of gas consumption in 2030. But this still requires a lot of research and investment. A pure-play in this area is Nel ASA. The Norwegians seem to be on the right track. For example, the Company has just recently received orders in the field of green hydrogen. Among other things, Nel will supply an alkaline electrolyzer system for the production of green hydrogen to a European company. The customer then plans to offer green hydrogen within Europe. Nel will also supply an alkaline electrolyzer system to Solar Foods, and this system will provide Solar Foods with energy for food production. The orders are worth a combined EUR 5 million but are strategically important. However, the Nel share is currently unable to benefit from the positive environment and is consolidating. In addition to the high market capitalization of EUR 2.2 billion, a capital increase is presently depressing sentiment. Recently, 98 million shares were placed at NOK 15.30 - around EUR 1.61. The shares were issued at a price of NOK 1.50 per share. A further 10 million shares could be placed at the same price.


    The energy transition has gained additional momentum from the invasion of Ukraine by Russia. However, companies like Nel are already sporting valuations. First Hydrogen is far from that, though the Company has yet to get vehicles on the road. RWE appears to be attractive for conservative investors.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author



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