January 24th, 2022 | 13:53 CET
NEL, dynaCERT, Plug Power - Hydrogen: First the crash, now the rebound?
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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 - This correction was foreseeable
Whether Elon Musk is right or wrong is not critical to Nel ASA's stock market success. After all, the industrialized nations around the world have assigned hydrogen a significant role in the climate protection program at the climate conference in Glasgow in 2021. Here, not only mobility is considered, but a whole complex of different applications from energy generation to storage to industrial substitutions. Green hydrogen has now established itself as a field of research and is gradually moving forward. However, it is not yet possible without government budgets, but e-mobility also has this point as an argument in its favor.
The share price of the Norwegian hydrogen company Nel ASA lost a lot on Euronext Oslo in the last 8 weeks from its high of NOK 20 to the area of NOK 12. In euro terms, this means a drop of a whole 37% from around EUR 2.02 to EUR 1.28. The stock market year 2021 was already a disaster for Nel ASA with a smooth price halving. Has the time now come for a rebound?
Europe plans to expand its electrolysis capacities in terms of "green hydrogen" to the target size of 40 gigawatts by 2030. At the moment, the Norwegians can produce electrolyzers with a total capacity of about 40 megawatts per year, only one-thousandth of the capacity defined by the EU. Assuming investments are made, Nel could book a decent share for itself in the future. That would set the sails.
At EUR 1.28, the Nel share price is now in a decisive zone. A quick technical upward movement towards EUR 1.60 to 1.80 could follow if this area holds. If the price slides further, a final catch zone at around EUR 0.80 - 1.00 will be identified. Remain patiently on the outer line until a technical decision has been made here. According to our last recommendation, investors should have already been halted since EUR 1.80 and can confidently wait and see.
dynaCERT - With the certification to new shores
The rapid rise in CO2 certificate prices is playing right into dynaCERT's hands. The Canadian Company produces and sells carbon emission reduction technologies in combination with its proprietary HydraLytica telematics software. Using this technology to document and monitor fuel consumption, GHG emissions savings are stored for verification with government agencies. This serves to obtain potential future carbon credits when using traditional internal combustion engines.
As part of the growing global hydrogen economy, the Company's patented technology generates hydrogen and oxygen on-demand through a unique electrolysis system. It feeds these gases into the combustion chamber through the air intake to optimize combustion, which has been shown to reduce carbon emissions and improve fuel efficiency. The Company's technology is designed for use in many types and sizes of diesel engines used in on-road vehicles, refrigerated trailers, off-road construction, power generation equipment, mining and forestry equipment.
DYA stock is currently fluctuating with each advance of its VCS program by Verra, a global leader in developing and managing sustainable development and climate change standards in the private sector. Independent experts are currently conducting the VVB audit. If all goes smoothly, we can expect some new revenue announcements. And then, if the industry trend finally turns around, DYA stock should no longer be at CAD 0.20. The climate conference in Glasgow has already pushed the share price up by a full 100%. The share is a hot potato - look closely!
Plug Power - At a critical limit
The decline of the Plug Power share has been indicated for a long time, as we reported regularly. Now it is worth taking a closer look. Plug Power had to correct balance sheet valuation approaches at the beginning of 2021 and could only regain its footing in September. By the time of the climate conference, the value had doubled again. But what goes around comes around. The current sector correction sent the value back to the starting line at USD 20. The annual loss in 2021 added up to almost minus 60%. At the beginning of the year, it is already a good 20% discount again.
Although hydrogen stocks significantly underperformed the overall market last year, major banks like JPMorgan continue to see long-term investment opportunities in this segment. The reason for this is that hydrogen is playing an increasingly important role in the energy mix of countries, as was also adopted in Glasgow. Already 26 countries have proclaimed a national hydrogen strategy due to the resolutions. As a net energy importer, Europe is seen as the driver of this future technology, which is intended to make the continent more self-sufficient.
Admittedly, there is still a long way to go before inexpensive green hydrogen is available, but its good scalability and technological progress could make this form of energy profitable in 10 to 15 years. Overall, analysts see a potential market for Plug Power of more than USD 200 billion. Experts estimate that the Company will achieve sales of USD 3 billion and EBITDA of USD 600 million by 2025. The current negative P/E ratio would then drop to around 40, and the stock market is currently paying a significant future bonus with a price/sales ratio of 25. From a chart perspective, the USD 18.50 to 21.50 zone is vital for Plug Power shares. If it breaks, it goes very low. Keep watch.
The hydrogen sector is attempting a technical rebound, but the downward pressure is still formidable. We remain on the sidelines, closely watching the standard stocks Nel ASA and Plug Power. The specialty stock dynaCERT remains promising in the event of successful certification.
Conflict of interest
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