12. May 2021 | 10:59 CET
Nel Asa, dynaCert, Nikola - Hydrogen: The sell-off threatens!
Alongside electromobility, hydrogen was undoubtedly the boom topic of the stock market year 2020. Driven by the global efforts of an energy turnaround, investors paid insane valuations for industry giants such as Ballard Power, FuelCell or Nel ASA. Since the end of January, however, a painful correction has set in, which has accelerated in recent days. Several stocks are threatening to fall below their long-term uptrends. Will another sell-off follow, or will the turnaround come now?
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ISIN: NO0010081235 , CA26780A1084 , US6541101050
"[...] 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.
Hydrogen - A clear sector of the future
Due to the outbreak of the Corona pandemic, the topic of the energy transition slipped somewhat into the background. But the quest for climate neutrality is one of the most important issues of our time, along with the virus. US President Joe Biden issued the goal that the US should be climate neutral by 2050 and is subsidizing renewable energies with programs worth billions. The federal government in Germany wants to reach this target as early as 2045. As a result, by 2045 the amount of climate-damaging gases entering the atmosphere and contributing to global warming should no longer increase. For the long-term success of the energy transition and climate protection, alternatives to fossil fuels are being sought. Hydrogen will play a key role here as a versatile energy carrier. Hydrogen produced in a climate-friendly way makes it possible to significantly reduce CO2 emissions, especially in industry and transportation. Here, energy efficiency and the direct use of electricity from renewable sources are not sufficient.
The low-cost alternative
Responsible for 40% of all greenhouse gas emissions in Europe are "heavy vehicles." Because of this, the European Union is now calling for drastic reductions over the next few years. Truck manufacturers must reduce CO² emissions by an average of 15% and by as much as 30% by 2030; otherwise, they face heavy penalties. For the affected fleet operators, this poses the question of existence. For many of them, setting up a new, climate-friendly fleet is virtually impossible.
For 16 years, dynaCERT has been researching a patent recipe for reducing emissions. A roll-out of the technology would mean a liberating blow for the trucking industry. Instead of renewing the entire fleet, the patented hydrogen-based electrolysis system "HydraGEN" makes it possible to reduce fuel consumption and emissions of large diesel engines by up to 20%. In addition to "HydraGEN," dynaCERT has developed intelligent software that makes it possible to record and analyze fuel savings. It also allows fleet managers to control fleet management, route planning, driver safety, and load management.
Although it would already be technically possible to install dynaCERT technology in passenger cars, the Canadians are currently focusing on trucks, construction equipment and diesel generators. In the first quarter of 2021, equipment for the global mining industry could be shipped to Brazil, Russia, China and Peru. In addition, dynaCERT reported growing sales in the truck and commercial vehicle industry in North America. Through its partnership with KarbonKleen, dynaCERT sold 20 units of the HG-1 model to North American mainland trucking customers. The Company's goal is to roll out in the next two years. In January this year, dynaCERT was named a top pick in sustainability by analysts at Canadian brokerage Haywood. The experts set the price target at CAD 2.20. Currently, dynaCERT is quoted at CAD 0.42.
What is next for Nel ASA?
Symptomatic for the whole industry, stands at present, the chart of the Norwegian hydrogen specialist Nel ASA. After a tenfold increase to the all-time high of NOK 35.15 within three years, a violent correction followed in mid-January, which is accelerating this week. Now it is necessary to defend the critical support at NOK 16.50. Otherwise, a rapid setback to the upward trend formed since July 2020 at around EUR 12 threatens. We continue to advise against an investment at present.
Nikola: Things are moving in an orderly manner
The fact that the specialist for hydrogen-powered electric trucks is widening its losses and still not generating any sales was evident given the quarterly figures delivered. Instead, Nikola was concerned with the outlook for the coming months. The first quarter saw the commissioning of the first batch of five Tre BEVs and validation tests at the Ulm test site, with the second batch of nine Beta Nikola Tre BEVs to be completed soon. In the second quarter, Nikola plans to start trial production of electric trucks at its joint venture manufacturing facility with Iveco.
Production of short- and long-range fuel cell vehicles is not planned until the second half of 2023 at the earliest. The new management seems to have brought some structure to the former chaos company. If production takes off, Nikola would be a multiplier candidate. However, it still faces many risks, and this stock is only suitable for investors who are willing to take it.