August 2nd, 2021 | 12:27 CEST
Linde, dynaCERT, Nikola - Profiting from change
Table of contents:
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
dynaCERT - The solution
One of the biggest challenges is climate protection in the transport sector. According to the German Federal Ministry for the Environment, the transport sector has reduced its greenhouse gas emissions from around 280 million tons to 150 million tons since 1990, but this is still too little for the European Union. The European Union is now demanding by law that the carbon dioxide emissions of heavy trucks, which are responsible for around 40% of all greenhouse gas emissions in Europe, be reduced by at least 15% and by as much as 30% by the end of the decade. Failure to comply with the requirements will result in severe penalties for the fleet operator. The fleet will therefore have to be re-equipped, which is likely to lead to considerable investment.
The Canadian Company dynaCERT addressed this problem more than 15 years ago and developed a far more favorable alternative for fleet operators and fleet managers. With the patented electrolysis system "HydraGEN", it is possible to reduce CO2 emissions in large diesel engines by around 19% without any loss of power by adding a small amount of hydrogen. This technology has already been used in more than 400 heavy vehicles for test runs. In addition, intelligent software has been developed by dynaCERT that documents and analyzes data such as emission savings or fuel consumption. Based on this, certificates can be generated for the CO2 saved, which can be converted into cash on the energy exchanges.
Going forward, the Company's management in Canada intends to take a leadership role in the new hydrogen economy while working with other high-level industry leaders to further enhance and expand the Company's environmental technology product line currently available on the global market. In the wake of the general market consolidation in the hydrogen sector, dynaCERT also lost more than 50% of its value and is trading at EUR 0.25. The story sounds exciting given the transformation in the transport sector due to the energy transition. Should the Canadians succeed in entering the mass market, there is no doubt that there is considerable potential.
Nikola - Sell off after indictment
One could have guessed it after the turbulences of the past months; now certainty has returned to the truck manufacturer Nikola. The public prosecutor's office in New York has filed charges against Trevor Milton, the Nikola founder who resigned in September 2020 after allegations of fraud. The indictment alleges that Milton misled investors who invested in Nikola based on misrepresentations about the products and subsequently lost money. The indictment, which closely resembles the Hindenburg Research trial, includes three counts of fraud. In September of last year, Hindenburg Research had accused Nikola of merely rolling its prototype ride-on device down a sloping road without propulsion. The defendant pleaded not guilty to all charges and was initially released on USD 100 million bail.
Nikola expressed that the lawsuit was personally against Milton and not the Company. "We remain committed to our announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks from the company's manufacturing facilities later this year," the statement said. In the wake of the court ruling, the stock plunged double digits and sits at the USD 11.80 support line. Although new management has seen success in operations over the past week, uncertainty remains. Nikola is only suitable for investors who are willing to take risks.
Linde - Another forecast increase
After another record quarter, the largest industrial gases group Linde raised its profit targets for the second time this year. For the full year, earnings per share are now expected to be between USD 10.10 and USD 10.30 before special items, an increase of around 25% on the previous year. In addition to the solid quarterly figures, a buy recommendation from Goldman Sachs also led to new highs. Analyst Robert Koort pointed out that Linde increased sales in all regions, which led to a surprising profit and continues to see the price at EUR 291.
The energy turnaround cannot get past hydrogen technology. dynaCERT has developed a visionary system that has significant upside when introduced to the mass market. Although the successes of the new management at hydrogen truck maker Nikola are evident, the share remains risky due to the turbulence surrounding the founder. In contrast, we see Linde as a clear long-term buy candidate.
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