May 3rd, 2023 | 07:45 CEST
Lose the German goggles and profit? Plug Power, Myriad Uranium, RWE
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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.
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Plug Power: "Degrowth" or Progress?
The last ZDF political barometer showed that about half of the respondents feel strongly or very strongly burdened by climate protection measures. If supporters of the "degrowth" movement now call for an end to the pursuit of prosperity and economic progress, these people are likely to see their prospects dwindling even more. The current weakness of the Greens in opinion polls shows that renunciation has less and less of a lobby in Germany. If the federal government overstretches the measures for climate protection, this could ultimately foster an attitude of defiance in which more and more people reject even sensible measures. Already today, many people are skeptical about everything that representatives of certain parties propose - this is not good for objective political discourse.
Instead of restricting people more and more and thus losing political support, the federal government should invest in progress or create framework conditions to make such investments worthwhile for private actors. The recent sale of Viessmann's heat pump business to the US shows that fewer and fewer players feel comfortable in Germany's regulatory framework. If this is compounded by an increased need for capital due to the high level of competition, family entrepreneurs from Germany prefer to pull out of the race when faced with such offers. The hydrogen business also remains capital-intensive and is also characterized by fierce competition. The Canadian company Plug Power has been struggling to finance its growth from its own business for decades. Now shareholders are up in arms and have filed lawsuits against management. The reason is several profit warnings in the past months and the statements made in parallel by representatives of the management.
RWE: Forges hydrogen alliance
Nevertheless, the outlook for the future remains rosy from Plug Power's point of view: sales are expected to double to USD 1.4 billion, and margins are also expected to increase. But is that enough? More and more traditional companies have also turned towards hydrogen in recent months. The traditional German company RWE also sees hydrogen as an energy carrier of the future and has launched the "GET H2" initiative. In addition to research institutions, BASF, BP and local public utilities are also involved. The aim is to link the entire value chain of the energy, industry, transport and heat sectors. For hydrogen companies like Plug Power or NEL, it is crucial to play a leading role in such initiatives. The competition from established industrial companies is fierce.
Myriad Uranium: Promising project - Mini-assessment
In contrast, there is hardly any competition in the field of nuclear technology. About 40% of the uranium produced worldwide comes from Kazakhstan. Even in the construction of nuclear reactors, suitable companies can usually be counted on one hand. Alongside Russia, China and the USA, France also stands for a nuclear industry that is still intact. Siemens is also still building nuclear power plants. While new nuclear power plants are hardly politically feasible in Germany, the situation is quite different worldwide. Even Japan is building a new nuclear power plant, and in Finland, even the Greens support the construction of a new reactor. Given the geopolitical tensions, reducing dependence on uranium supplies from Russia or former CIS states is important. That is where the young Canadian company Myriad Uranium comes into play. The Company controls a 1,800 sq km property in Niger that intersects two geological trends where the already-producing Dasa and Imouaren mines are located. Niger has always been the source of uranium used in French nuclear power plants. Myriad Uranium's property also once belonged to the French state-owned company Areva and was designated for preferential exploration at the time. Even today, Myriad has historical exploration data from that time.
Myriad Uranium's shares are valued at only about CAD 10 million and could benefit from the ongoing uranium boom. If Myriad Uranium manages to confirm the high expectations for its property through exploration drilling, opportunities could arise to develop the project. Any investment must be considered speculative, but the current valuation and long-term potential appear favourable.
While companies such as Plug Power have been burning capital for years and are also coming under increasing pressure from established industrial companies and utilities such as RWE, it makes sense not to lose sight of the major nuclear energy trend that remains intact outside Germany. Projects such as that of Myriad Uranium are still in the early stages but are considered promising. Speculative investors can see an opportunity in the low valuation of the share.
Conflict of interest
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