September 22nd, 2021 | 14:05 CEST
NEL, dynaCERT, Plug Power, FuelCell Energy - Hydrogen, the flagpole is broken!
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"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
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 - It goes deeper and deeper
For the year 2030, the market volume of the hydrogen industry i.e. hydrogen production, including supplier industry in the EU, is estimated at around EUR 85 billion. That is an ambitious target for the expansion of this technology. However, if the progress of the hydrogen industry internationally continues as hesitantly as before, a market volume of only about EUR 35 billion will be reached.
Nel ASA is the largest electrolyzer producer in the world. Recently, the Norwegians published their figures for the second quarter. Operating sales increased by a moderate 10.2% year-on-year to NOK 163.7 million, but costs of NOK 312.8 million were incurred in the same period. These were a full 42% higher than in the same quarter last year, documenting the Company's still very high level of investment.
The share of the Norwegian hydrogen specialist shows its weakest side in September. It is down a full 20%, which also sends the annual chart into the loss zone. Nel ASA is now trading back at the level of April 2020 and has now lost 65% from the top. Investor interest is decreasing sharply, as traded volume is also down to around 3 million shares per day. As a reminder, in January, Nel saw as many as 30 million shares circulate. We remain cautious. The next chart support can be found at EUR 1.00.
dynaCERT - Pulled into the vortex
Hydrogen is increasingly seen as an important pillar of decarbonization strategies worldwide. In June, residents in Canada experienced the changing climate with nearly 50 degree temperatures, one of the hottest days on record. Climate protection has definitely entered people's minds today, and now it is up to countries to step up with their investment programs.
One promising approach is the bus and heavy-haul traffic in metropolitan areas. Here is where decarbonization must take hold because air quality is one of the vital requirements in city life. dynaCERT has on-site technology for combustion optimization with hydrogen specifically for heavy-duty diesel vehicles. The switchable HydraGEN system has already been used in several small Canadian towns. With the HydraLytica system, dynaCERT also offers the appropriate telematics software to officially measure CO2 savings and document them for the responsible environmental authority.
In 2021, dynaCERT formed a strategic alliance with Galaxy Power, also a Canadian company. The aim is to develop new solutions and products for hydrogen projects. Of course, it is easier to shoulder investment projects together because public institutions are not awarding contracts. The bottom line is that the market is waiting for innovative products to be sold on a larger scale and provide a jolt to the figures.
Until that happens, the dynaCERT share price will probably continue to trend sideways-downward, following the manifested industry trend. Although the share has held up better than the well-known industry protagonists, this is only a small consolation for those who have been invested for a long time.
Plug Power - The Korean adventure
Close observers of the Plug Power share may still remember the January 2021 deal with Korea. At the time, SK Group, one of South Korea's leading business groups, wanted to enter into a strategic partnership to accelerate hydrogen as an alternative energy source in Asian markets.
Under this partnership, Plug Power and SK Group intended to provide hydrogen fuel cell systems, H2 refueling stations and electrolyzers to the Korean and other Asian markets. The financial part of the deal included a strategic investment of USD 1.6 billion in Plug Power shares by the Koreans. The investment was made at a price of USD 72. In return, SK Group received a 9.6% stake, which they still hold today.
SK and Plug Power announced the joint venture to build the hydrogen ecosystem in Korea. The goal of the Asia JV was to build a gigafactory in Korea by 2023 to produce fuel cells and electrolyzers. The markets have not heard much more about this project, and Plug Power's share price has also lost over 60% since then. Too bad because the initial news sounded promising.
FuelCell Energy - Better figures than expected
FuelCell Energy opened its books at the quarter-end financial conference and was able to surprise analysts positively. Loss per share narrowed to USD 0.04 from USD 0.07 a year earlier. On the revenue side, the books showed USD 26.8 million, which is still an increase of 70%. The bottom line is that FuelCell's numbers exceeded the expectations of analysts polled. Nevertheless, the Company continues to burn money.
The stock even briefly gained 35% on publication but gave almost all of it back in the days that followed. Explosive moves in this sector are always possible in the short term, but the pressure remains unabated. In order to turn the entire sentiment in the share, tight operational progress is required. Chart technically, investors can only hope for the EUR 5 mark. Continue to stay on the sidelines; if it turns, it will be noisy!
FuelCell and Plug Power are members of the Hydrogen North America Index, which provides dynamic investors with a diversified and straightforward investment in the entire industry. Add Nel ASA, and you have already diversified well across the Atlantic. The Canadian Company dynaCERT should be considered more as a small and speculative addition.
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