August 13th, 2021 | 12:36 CEST
NEL, dynaCERT, FuelCell Energy, Plug Power - Is hydrogen about to explode next?
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Nel ASA - Trembling before the figures
The chattering of teeth can be heard for miles around. Now that Nel ASA has disappointed twice with its figures, investors are cautious about today's announcement. The NEL share has managed to hold its ground in recent days but has lost a full 40% of its value in the last 2 months. Year-to-date, there is already a gap of 18%, so the best entries in the Nel share are already well back into 2020.
Nevertheless - Nel ASA is one of the market leaders in H2 filling station technology and is considered very well connected and positioned in the hydrogen sector. Through several capital increases, the high share price values could also be used to fill the cash box properly. Thus, today's figures could disappoint again, but the risk-averse investor should take hold if the share price does not fall below its support of EUR 1.20.
dynaCERT - Little news, but signs of stabilization
The dynaCERT share has been going down for several months now. Yet, the Canadian H2 device manufacturer can actually develop solutions that provide direct approaches to the climate discussion. dynaCERT is a specialist in on-site CO2 reduction. Logisticians and fleet operators can save up to a fifth of energy by installing an H2 combustion optimizer. Especially for trucks and buses that are in continuous use, dynaCERT is a fast and affordable solution.
The HydraGEN system, which can be switched on, has already been used in several small Canadian towns such as Woodstock City and is also marketed by the European logistics specialist Mosolf. Direct hydrogen supply optimizes combustion by up to 19% for a manageable price of around CAD 6,000 per system. It is a perfectly justifiable investment considering acquisition costs of over CAD 200-250 thousand for a new tractor unit. With HydraLytica, dynaCERT already has the appropriate telematics software on board to officially measure the CO2 savings and document them for the responsible environmental authority. As a result, the fleet operator receives credits in CO2 certificates, a nice reward for green business.
The DYA share has not been able to escape the weakness of the entire sector and most recently landed at prices around CAD 0.28. The current market capitalization of around EUR 76 million reflects development costs and cash on hand. Therefore, we do not expect a further decline in the share price at the current level. Conversely, the price could jump sharply if the right news comes along. In any case, founder and CEO Jim Payne is buying diligently.
FuelCell Energy - Little fodder for euphoric prices
FuelCell currently reports very little, and the last quarterly figures did not really inspire. The past quarter closed with total sales of USD 14.0 million, compared to USD 18.9 million in the previous year. A decline of 26% does not exactly speak of growth. The stock is thus becoming a broad topic of discussion.
FuelCell has had a long history of negative cash flows and dilutive capital raises. Now it is focusing on commercializing new technologies such as hydrogen generation and carbon capture. Most recently, the Company raised USD 128.8 million in additional cash in December. There should be a few million left in the coffers here. Now, it needs suitable projects.
We have had the stock on our radar for a long time; unfortunately, the price has fallen from low to low since February. In chart terms, we are now entering critical support zones below EUR 6. Because below EUR 5 there is the threat of a further crash, above EUR 7.50, the first hope could germinate again.
Plug Power - The US Senate comes to the rescue
Plug Power has held up quite well within the sector. Earlier this week, it broke ground on a green hydrogen production plant in Camden Country. The plant is expected to be completed by the end of the year and produce 15 tons of liquid green hydrogen per day. The hydrogen produced will be made entirely from renewable energy.
The new site joins previously announced green hydrogen plants in South Central Pennsylvania and the Western New York Science, Technology and Advanced Manufacturing Park (STAMP). According to US Department of Energy plans, combined projects are expected to produce more than 500 tons of green hydrogen per day by 2025.
Plug Power is naturally counting on government help with its investment policy. The fuel cell manufacturer could receive support from the US Senate. After all, bridges and roads in the US are decaying, the water supply is outdated, and the power supply is prone to faults. These problems are to be remedied with more than a trillion dollars, and the focus is also on green technologies.
For PLUG shares, it is time for operational progress to stabilize the share price. From a chart perspective, the share price has fallen below the USD 27 mark, which could mean trouble ahead. After all, the Company is still capitalized at USD 16.7 billion, which provides a price-to-sales ratio of 33. Even if Plug Power is growing at 50% p.a. - it is (still) not cheap!
The hydrogen industry is very fragmented in its structure and has been riding a wave of euphoria for a long time. Companies that provide a product solution are analytically at an advantage because they are already generating tangible revenues. However, if you only hang on to government funding, the private sector relevance is missing in the medium term. dynaCERT produces H2 system solutions, is currently cheap, and the management is already buying at low prices.
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