Nel and Plug Power at the end? New hydrogen favourites like dynaCERT share?

dynaCERT: The second half of the year will be exciting

The second half of the year could be a milestone for dynaCERT and its shareholders. And it has started with a bang. The Company has received a follow-up order for its HydraGEN™ devices. The patented system can be used to retrofit conventional diesel engines in order to reduce fuel consumption and pollutant emissions. A Canadian company from the oil and gas sector has ordered 84 units via sales partner Simply Green. The order came after the Company had already ordered 18 HydraGEN™ units and undergone intensive technology testing. The dynaCERT units are intended to reduce the fuel consumption of drilling rigs and improve the emissions balance.

Simply Green CEO James Pearce: "Given its impressive emissions reduction capabilities, dynaCERT's HydraGEN™ technology is quickly gaining popularity in the oil and gas industry as a cost-effective and environmentally friendly solution for improving carbon footprint. As dynaCERT's Western Canadian distributor, we have worked very closely with the contractor and dynaCERT staff over the past year and would like to thank them for the constructive outcome of everyone's efforts."

The order led to a jump in the share price of around 10%, which is likely a small foretaste of the real price trigger: VERRA certification of the dynaCERT product range. VERRA has developed the world's leading quality standard for CO2 certificates. VERRA certification would be the product accolade that would lift the Company into a new league. On the one hand, certification would further enhance the value of HydraGEN™ products for customers, and dynaCERT could establish a new and highly profitable business segment by trading CO2 certificates.

dynaCERT is valued at less than EUR 50 million. If VERRA certification and further orders are obtained, the share could quickly be revalued.

Nel: Company announcement is surprising

It is almost unbelievable that Nel still has NOK 10 billion on the stock market despite a share price drop of around 85% from its all-time high. The Company's latest press release is also unbelievable. According to it, there was a follow-up order from a European customer for electrolyser equipment with a volume of EUR 7 million. However, the press release did not contain more than this one sentence. It is quite common for a customer's name not to be mentioned, but the fact that no other information is provided is something I have never come across in over 25 years on the capital market. Especially since Nel would have never reported an order with a volume under EUR 10 million in the past, nerves seem to be on edge.

The IPO of its subsidiary Cavendish Hydrogen did not provide the hoped-for relief, as Nel has spun off its hydrogen refueling systems business for heavy commercial vehicles and will concentrate on electrolysers in future. However, neither Nel's nor Cavendish's shares are currently inspiring the stock market.

Plug Power: Sees black figures in the US

And what is Plug Power doing as the second fallen hydrogen angel? The Company has announced that it will be reporting the tax benefits from the Inflation Reduction Act (IRA) for the production of green hydrogen in its financial reports in future. Plug says it will be one of the first clean hydrogen producers in the United States to take advantage of this new incentive.

This is a production credit of up to USD 3 per kilogram for clean hydrogen produced in the US. This is a significant financial incentive for hydrogen production in the US, significantly lowering the cost of hydrogen production in the US market. This incentive allows newer, cleaner technologies, such as electrolytic hydrogen production from water, to be more cost-competitive with established fossil fuel technologies.

This advantage is one of the key factors for Plug to achieve a break-even margin by the end of the year and to be profitable in this area from 2025. Plug CEO Andy Marsh: "By taking advantage of these incentives, we can expand our hydrogen production capacity and drive technological progress in the industry. Using the PTC will encourage innovation and investment in clean hydrogen solutions, which are essential for a sustainable future."

The stock market does not yet seem convinced. Plug shares are trading at an all-time low of USD 2.3, but the Company is still valued at around USD 1.7 billion.

In the hydrogen sector, the old favourites no longer seem to be working. Nel and Plug Power are still valued at billions, but investors seem to have lost faith. The companies are not finished yet, but perhaps it is time for new favourites. One of these could be dynaCERT if the VERRA certification comes and further orders follow. The Canadians seem to be worth speculation.