October 31st, 2023 | 07:10 CET
Nel ASA, First Hydrogen, Plug Power - Huge potential at reduced levels
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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.
First Hydrogen - Staying on the path to success
One of these promising candidates with multiplication potential is Vancouver and London-based First Hydrogen. The Company, which currently has a market capitalization of CAD 76.68 million, has a vision to cover the entire value chain in the hydrogen sector. In addition to the goal of becoming the leading designer and manufacturer of zero-emission, long-range hydrogen-powered vehicles in the UK, EU and North America, First Hydrogen developed a prototype for a customized refueling system with its German partner, FEV Consulting GmbH. It also plans to launch green hydrogen production and distribution in Europe, in addition to the UK and North America, to provide a 360-degree offering to its customers with the "Hydrogen-as-a-Service" model.
The development of light commercial vehicles powered by hydrogen fuel cells is currently the most advanced. Here, Rivus and SSE, two of sixteen major fleet operators who applied as part of the British "Aggregated Hydrogen Freight Consortium" AHFC, have already been able to test the vehicles under real road conditions in a program lasting around 4 weeks. The results were excellent and even exceeded their own forecasts. For example, test drives by energy infrastructure company SSE achieved the best mark of 630 km range on a single refuel in real-world operation. By comparison, comparable light 3.5t commercial vehicles with electric drives manage just 240 km. In addition, potential customers noted increased driving comfort and, due to the efficient drive technology, the ability to transport large payloads without the range being affected by poor weather conditions.
For general corporate purposes, First Hydrogen recently closed a non-brokered private placement of debenture units at a price of CAD 1,000 per unit for gross proceeds of up to CAD 2.9 million. The Canadian company's shares have been only partially immune to the general market correction in recent weeks, losing around half of their value since mid-July. In terms of growth opportunities, the Company is more than interesting at the current level of CAD 1.54.
Nel ASA - Still highly valued
In contrast to First Hydrogen, the results of Norwegian hydrogen specialist Nel ASA were disappointing and do not yet justify the market capitalization of EUR 831 million.
Sales in the third quarter rose by 121% to EUR 34.3 million, but this figure was below analysts' forecasts, who were expecting revenues of EUR 35.58 million. In terms of operating income before interest, taxes, depreciation and amortization, the Norwegians were above consensus estimates, with a minus of EUR 9.21 million, while forecasting a minus of EUR 11.75 million for EBITDA. In the same quarter last year, this figure stood at a loss of EUR 18.09 million. The increase, according to the Company, was due to picking up revenues from large electrolyser contracts and improved cost control at Nel Fueling. The net loss totaled EUR 19.10 million.
A sharp decline of 55% to EUR 29.75 million from Q3 2022 was published by Nel ASA in order intake. A total of EUR 241.23 million in orders are on the books at the end of the quarter. Following this, Nel ASA CEO Håkon Volldal commented, "For the first time, we have exceeded NOK 1 billion in YTD revenues, and there is still one quarter to go. At the same time, margins are improving as the Company scales production and becomes leaner."
Nel ASA shares then continued their sell-off, marking a new yearly low at USD 0.59. The chart picture continues to be considerably battered.
Plug Power - It is getting exciting again
It will be interesting on November 9, 2023, when the fuel cell pioneer Plug Power presents its figures for the third quarter. In mid-October, the go-getting CEO Andy Marsh issued a profit warning for the full year at the Plug Symposium 2023. As is so often the case with the Company, which has been operating at a loss for 26 years, you cannot find this information anywhere.
So, the US company expects revenues of USD 1.2 billion for the current fiscal year 2023. Originally, the range was between USD 1.2 billion and USD 1.4 billion. The estimates for further into the future have been maintained. Sales are expected to increase fivefold to USD 6 billion by 2027, with around USD 20 billion expected on the books at the beginning of the new decade.
A look at the share chart shows that the statements of the Plug management are no longer believed without reservation. A new low for the year was marked at USD 5.87. The loss since the beginning of the year amounts to almost exactly 50%. It is worth noting that investors have lost nearly 99% of their investment since Plug Power's IPO in November 1999.
The hydrogen sector continues to be in correction. However, companies like First Hydrogen offer significant potential at reduced levels. In contrast, Nel ASA disappointed with its numbers. Plug Power has further downside potential by reaching a new low for the year.
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