13. January 2021 | 10:55 CET
NEL ASA, dynaCERT, Everfuel - Is the hydrogen bubble bursting?
The valuations of most hydrogen stocks are skyrocketing to immeasurable heights. Compared to the current balance sheet figures, this seems irrational and unjustified. Only the future forecasts in terms of sales and profits are used as a benchmark. Much is reminiscent of the year 2000 and the new market, when shares such as Gigabell or Metabox were maneuvered into orbit, only to fall from the sky like shooting stars a short time later.
time to read:
ISIN: CA26780A1084 , NO0010081235 , DK0061414711
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Both feet on the ground
The situation is entirely different for the Canadian Company dynaCERT. Here, research that has been ongoing for 16 years has developed a hydrogen technology for diesel engines that enables operators to save a considerable amount of fuel. The technology, called "HydraGEN", uses a patented electrolysis system to convert distilled water into hydrogen and oxygen gases produced on demand. dynaCERT's goal is to reduce the amount of greenhouse gases emitted from the combustion of carbon-based fuels. Both CO2 emissions and fuel consumption are reduced by up to 20% at peak.
Currently, dynaCERT's customers are mainly fleet operators. The heavy trucks that roll along North American highways for up to 24 hours a day are to be equipped with the newly developed kits. With the specially programmed "HydraLytica" software, it is also possible to record and analyze fuel savings. Other features such as fleet management, route planning, driver safety, and load management are to be added gradually. The Company's technology is currently already being used in trial runs in more than 400 vehicles.
In the future, dynaCERT's technology will be used wherever diesel engines are available: In addition to trucking, there is logistics, heavy construction equipment, mining equipment - including underground, diesel generators, marine, and trains. The technology also works for diesel cars. Here, pollution is reduced and fuel consumption is lowered. However, this is still a future market for the Canadians. Currently, the sales team is busy rolling up the truck market worldwide.
Huge opportunity for the future
According to CEO Jim Payne, the long-term goal is to get every diesel engine in the world to adopt dynaCERT's technology. While this goal is ambitious, the technical groundwork has been laid in recent years. With a market capitalization of currently only EUR 128.50 million, the Canadian Company offers enormous potential in the hydrogen mega-market. You can read the complete interview with dynaCERT CEO Jim Payne:
Interview dynaCERT CEO Jim Payne
Parent company and investment
Once again, there is news in the right-left pocket game between the mother Nel ASA and her Danish subsidiary Everfuel. This time Nel ASA is awarded a 20 MW electrolyzer contract with Everfuel A/S for the green hydrogen production plant next to the Fredericia refinery in Denmark. The Everfuel contract is worth EUR 7.2 million. The Fredericia plant will have a production capacity of up to eight tons of green hydrogen per day from renewable wind energy, with ten tons' storage capacity. The electrolyzer will be delivered in 2021 and fully operational by mid-2022. Everfuel's CEO commented as follows: "This is an important step towards building our own green hydrogen production through the HySynergy electrolyzer in Fredericia in close cooperation with Shell's refinery operations. The core of our ambition is to commercialize the green hydrogen value chain for zero-emission mobility."
Is the balloon bursting?
Currently, Nel ASA's stock market value is EUR 4.71 billion. In contrast, the Norwegians' current sales figures look measly. In 2020 sales increased slightly to EUR 57.13 million, compared to EUR 55.1 million in the previous year. The loss in 2020 was a whopping EUR 31.7 million, not unusual for a growth stock. Larger orders were indeed brought in last year; however, this in no way reflects the exorbitantly high valuation. The same applies to the subsidiary Everfuel, in which Nel ASA still holds a stake of just under 17%. Here, the stock market value is EUR 1.3 billion. Driven by the ever-growing euphoria, we advise caution. In any case, a more substantial correction would be justified based on the fundamental data.