August 4th, 2022 | 11:51 CEST
Nel, Altech Advanced Materials, Mercedes - It is getting exciting!
Table of contents:
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Altech Advanced Materials - When will the breakthrough come?
"Innovation made in Germany" with the potential to turn industries upside down. In a nutshell, this is how one could characterize the Heidelberg-based Company, which is developing novel processes to make batteries significantly more powerful. The key lies in the coating technology for the anode material. Nanocoating with high-purity aluminium oxide and an enrichment of silicon can prevent the deposition of lithium particles on the electrodes. The problem of standard methods, which lead to a loss of capacity after the first charge, is thus eliminated. The "Silumina Anodes" could, in perspective, become the new industry standard.
A recently published pre-feasibility study for the planned plant for ceramic coating of anode composite material in Schwarze Pumpe, south of Cottbus, underlined the great economic potential. The project's pre-tax net present value (NPV) is a substantial EUR 420 million. Heidelberg holds a 25% stake, bringing the value of the ownership interest to EUR 105 million. That is in contrast to the microcap's stock market value of well under EUR 10 million.
At full capacity, 10,000 tons per year (tpa) can be produced. The Company expects an annual operating profit (EBITDA) of around EUR 52 million. The high profitability is reflected, among other things, in an internal rate of return (IRR) of 40% and a payback period for investments of only 3.1 years. On August 23, the Company invites its shareholders to the Annual General Meeting.
Nel - Ambitious company valuation
Nel hits the nerve of the times, offering solutions for the production, storage and distribution of hydrogen from renewable energy sources. Industry, energy and gas companies are among the growing customer base. The Norwegians have positioned themselves broadly and cover the entire value chain from hydrogen production to the manufacture of hydrogen refueling stations.
Nel shareholders have had to show strong nerves in recent months. The shares are currently quoted at NOK 16, which means that the Company is valued at the equivalent of EUR 2.5 billion. Although analysts forecast a significant increase in sales from EUR 110 million in the current fiscal year to EUR 174 million in 2023, the Company is still in the red. The Company's valuation at around 25 times current sales still contains some advance praise. The analyst community also sees it that way; on average, the experts currently consider the shares to be exhausted. Nevertheless - Nel's recent announcement of a major order hints at how quickly it could see stronger-than-market-expected growth.
"We are very pleased to announce the largest order to date for Nel. This project will demonstrate Nel's delivery and execution capabilities on a large scale and will be a valuable reference for future large orders. It will have a significant positive impact on Nel's finances, electrolyzer product and production costs, technology development and scale-up plans," said Håkon Volldal, CEO of Nel.
The firm order for electrolyzer stacks is worth more than EUR 45 million. Production and delivery of the stacks is planned from February 2023 to mid-2024 at Nel's large-scale electrolyzer plant on Herøya.
Mercedes-Benz Group - Better than the competition
While Mercedes is optimistic about the future, competitor BMW recently rowed back. The Bavarians now expect a slight decline in sales in the current year. However, the operating margin should remain unchanged. Analysts did not like this, and BMW shares fell.
According to consultancy PwC, production bottlenecks, supply chain problems and lockdowns in China have recently significantly slowed global sales of battery electric vehicles (BEVs). New registrations of e-cars in 14 selected markets doubled year-on-year in the first quarter, according to PwC, while the growth rate in the second quarter was "only" 62%. "In Europe, just under 1.5 million BEVs will be produced this year - at maximum capacity and without bottlenecks, it could be more than twice as many," said PwC industry expert Felix Kuhnert.
Even if growth rates currently appear to be leveling off at a high level, Mercedes' strategic path of focusing on e-mobility is the right one. In addition, the brand is forcefully positioned in the luxury segment. That creates a clear profile. The spin-off of the truck division has additionally sharpened the equity story. The analysts at RBC recommend buying the shares of the South German company with a target price of EUR 90, which corresponds to an upside potential of a good 50%.
All three companies mentioned have points of contact with the energy transition. Mercedes is focusing on electric mobility in the luxury segment. Nel benefits from the growth of the hydrogen sector. Altech from the second tier is interesting given the technology potential and the high valuation discount.
Conflict of interest
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