July 1st, 2021 | 13:49 CEST
NEL, Plug Power, dynaCERT - Hydrogen, here we go again!
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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 - The second wave is not running smoothly
The share of the Norwegian hydrogen specialist Nel shows a strong performance in the middle of the week but had to accept the first 5% decline yesterday. Correction in the uptrend or renewed downward turn? Nel has just overcome an important hurdle at EUR 2, which clearly brightens the chart situation.
The situation in the hydrogen sector continues to ease, and many of the badly battered stocks are increasingly recovering. The mood among analysts is good again. After an online meeting with Group CEO André Løkke, Canadian bank RBC has left its rating for Nel ASA at "Outperform" with a price target of 27 Norwegian kroner. NEL is among the strongest stocks to bet on green hydrogen, analyst Erwan Kerouredan wrote in a research note issued on Wednesday. Private bank Berenberg left Nel ASA at "buy" with a price target of 30 Norwegian kroner after the US Department of Energy's announcement that it plans to cut green hydrogen production costs by 80% by 2030. Converted to euros, the analysts' new price targets range from EUR 2.50-3.20. At the beginning of January, Nel had run up to EUR 3.40.
The Nel Hydrogen Electrolyser division has signed a framework agreement with Howden, supplying hydrogen compressors for the electrolyzers. The Norwegians want to reduce the production costs of green hydrogen to USD 1.50 per kilo. The cooperation with Howden is an important step towards achieving this cost target. NEL shares fell below the EUR 2 mark again yesterday. Watch out at the platform edge!
Plug Power - Much advance praise for future business
We were also able to witness a rich price recovery at Plug Power. Calculated from below, this was an increase of 60% from EUR 18 to EUR 29. The E-Hydrogen North America Index had its strongest 2 weeks in 2021 and now looks back on a quarterly gain of more than 20% at the end of June. Of course, the stock with the strongest weighting in the index - Plug Power - provided the boost. The US fuel cell manufacturer reported results for the first quarter of 2021 on Tuesday. Overall, Plug Power continued to grow strongly, with revenue increasing 76% to USD 72 million. The main driver remains the sale of fuel cells and related infrastructure at USD 47 million. In this area, sales improved by as much as 129%. However, costs also increased, so the bottom line was a loss of USD 61 million.
From a chart perspective, the chances are good that the recovery will now continue, but there was a break in the momentum yesterday. At Plug Power, the EUR 30 mark is now in the room; in the medium term, of course, the share needs a good operational background because with a price-to-sales ratio of over 50 based on 2021, a very rosy future is already included in the prices. It will be difficult for Plug Power to surprise positively. We, therefore, advise profit taking at this level.
dynaCERT - Climate protection on site
Hydrogen is increasingly seen as a key pillar of decarbonization strategies worldwide. According to the Hydrogen Council, an initiative of around 100 companies worldwide, the hydrogen economy could generate more than USD 2.5 trillion in sales per year. Residents in Canada are experiencing the changing climate firsthand with nearly 50-degree weather in June, one of the hottest months on record. Again, the naiveté of one, Donald Trump, who ridiculed the climate debate during his term in office, is evident.
Something urgently needs to be done, and action starts in small ways. For big implementations, the new governments in the US and the EU have already sent strong signals. One good place to start is with bus and heavy-vehicle traffic. According to Statista, the number of trucks sold in the USA alone is currently 444,000, and the number of registrations is growing at a constant rate of 5% per year. And this is where decarbonization must take hold!
dynaCERT has an on-site technology for combustion optimization with hydrogen, especially for heavy-duty diesel vehicles. The switchable system HydraGEN has already been used in several small Canadian towns and is also distributed by the European logistics specialist Mosolf. With the HydraLytica system, dynaCERT also offers the appropriate telematics software to officially measure the CO2 savings and document them for the responsible environmental authority. The fleet operator thus receives credits in the form of CO2 certificates. dynaCERT has signed a cooperation agreement with Galaxy Power to promote innovative hydrogen technologies in Canada.
Shares are currently trading at around CAD 0.36-0.40. The general correction in the sector had dragged the stock down with it. At some point, however, the end is also in sight here, which is why we now advise initial buybacks.
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