December 22nd, 2021 | 14:00 CET
NEL, dynaCERT, Plug Power, FuelCell Energy - An explosive scenario for hydrogen in 2022!
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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.
The international H2 alliance
According to the World Energy Council (WEC) analysis, at least 20 countries representing nearly half of global economic output have adopted a national hydrogen strategy or are at least close to doing so. Leading the way are Japan, France, South Korea, the Netherlands, Australia, Norway, Spain and Portugal. But Russia, China, Morocco and the USA are also working on their strategies. Australia and China are leading the way, Europe and the Middle East are already doing a lot, and Scandinavia is particularly innovative.
Nel ASA - Great expectations for the small Norwegian Company
The Nel ASA share has been on a roller coaster ride in the 2021 calendar year. Starting the year at over EUR 3.40, the share said goodbye in December with a good 35% loss from the year that had started so promisingly. Like many other H2 stocks, reality caught up with the euphoria. We look at the consensus figures of the experts for the coming year.
The average of all revenue estimates is NOK 1.65 billion, the equivalent of about EUR 162 million after an expected NOK 0.82 billion in 2021. That would be an outright doubling of revenues, i.e. growth of about 100%. The pace will then slow down somewhat in subsequent years. The adjusted loss per share is expected to be 0.29 kroner per share next year, compared with 0.87 kroner this year. So far, so good - converted to the market capitalization of EUR 2.12 billion, the price-to-sales ratio (P/S ratio) is a full 13.
With this factor, large orders in 2022 are both a necessity and a must because Nel ASA has its own claim to be one of the international innovation drivers in hydrogen. With an automated gigafactory for electrolyzers in Norway, the Company wants to turn a giant wheel and significantly reduce production costs. The long-term goal is to produce a kilogram of the coveted green hydrogen for USD 1.50 by 2025.
Shareholders will have to be patient, as the Company is not expected to break even before 2024. Nevertheless, the share should not be lost sight of, because technically there is a good resistance area between EUR 1.30-1.40. Keep watch!
dynaCERT - Another step towards verification
It has become quiet around the dynaCERT share in recent weeks. No wonder, as the Canadian H2 device manufacturer submitted its CO2 reduction solutions to an international carbon audit a few weeks ago. dynaCERT is applying for certification by the Verra Verified Carbon Program (VCS) for its products.
The VCS Program is the most widely used voluntary greenhouse gas program globally. Nearly 1,700 certified VCS projects have collectively reduced or removed more than 630 million metric tons of carbon and other greenhouse gas emissions from the atmosphere. If successful with certification, logistics providers, fleet operators and public transportation providers can earn valuable emissions credits by installing an H2 combustion optimizer from dynaCERT. It significantly reduces operating costs and boosts their green footprint. dynaCERT's systems can save up to 19% in energy costs, which is good for the environment and the expense budget.
Jean-Pierre Colin, Executive Vice President and Director of dynaCERT, stated, "In Canada and around the world, carbon credits and offsets play a prominent role in promoting a cleaner planet. dynaCERT's commitment to work with Verra to achieve global greenhouse gas reduction is consistent with the stated United Nations goals endorsed by over 160 nations worldwide in Article 6 of the Paris Agreement." It sounds very promising. The area around CAD 0.20 has been a successfully confirmed buy zone in recent months.
Plug Power and FuelCell Energy - Analytically expensive but popular with investors
Plug Power may be considered the American top dog among hydrogen stocks. The Company used the euphoria phase at the beginning of the year for two large capital increases and a strategic cooperation with the Korean SK Group. All these measures together brought in almost USD 3 billion. After considerable price corrections, the market capitalization fell from USD 50 billion to USD 18 billion - a substantial discount.
With estimated sales of USD 887 million, revenues will double in 2022, but a P/S ratio of 22 is still being paid. From this perspective, all hopes for Plug Power are already priced in until 2025. Here, an H2 mega program would have to be driven by international legislators, which, from today's perspective, will probably fail due to the government's financing possibilities. After all, the FED has now promised interest rate hikes at its last meeting of the year.
FuelCell Energy 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. We have had the stock on our radar for a long time, but unfortunately, the price has fallen from low to low since February. Chart-wise, it is now back in the zone around USD 6, with an interim rally leading to USD 11.50 in November. FuelCell is probably more of a gambler's stock on the market because, with forecast sales of USD 116 million, investors are paying a P/S ratio in 2022 of a valiant 20.
Nevertheless, both stocks have their charm in momentum-driven waves of euphoria, such as after the climate conference in Glasgow. After these rises, however, the overpriced stocks immediately go into decline again. Plug Power and FuelCell Energy are purebred casino stocks for speculative portfolios and are permanently at risk of corrections due to permanent overvaluation.
The hydrogen sector is one of the top sectors of the investment year 2021. Never have larger price gains been achieved in such a manageable time. However, no exit bells were rung, and now the sector is gradually heading sharply downward. The euphoria had to give way to reality at some point. dynaCERT has a marketable product, and if it is verified, there should be a noticeable upswing in the share price.
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