January 4th, 2022 | 11:30 CET
Nel, Plug Power, First Hydrogen, FuelCell Energy - Hydrogen versus Tesla!
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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 - A successful start to the year!
In 2021, hydrogen shares were only temporarily high on the investors' list. After a dream rally in the first quarter with increases of several 100%, the prices of some stocks fell back by more than 70% from the top. Nel ASA is a standard, strong-selling stock from Norway. Scandinavia, in particular, has set its sights on a complete conversion of its energy supply to regenerative and alternative energies in the coming decades.
Why was 2021 so volatile in the end? In part, the high prices at the beginning of the year tempted investors to take profits, but on the other hand, the published figures were often far below investors' expectations. The result: a sell-off! At first, the stock market had to cope with enormous hype, but later the euphoria gave way to sheer disillusionment.
However, the start of the new stock market year 2022 is promising for the shares. On the German stock exchanges, the Nel ASA share gained up to 8.4% yesterday. However, the Company will not reveal the truth about its business development in 2021 until February 17, 2022. That leaves a lot of room for speculation, which will be used positively at the beginning of the year.
First Hydrogen - Now also active in H2 filling stations
Hydrogen technology is still far behind e-mobility in terms of subsidies, but since the climate conference in Glasgow, many governments are launching a multi-pronged approach in favor of decarbonization. In the passenger car sector, both the automotive industry and policymakers have relied almost exclusively on battery technology. In contrast, for commercial vehicles and ships, which are responsible for around 40% of global transport emissions, H2 fuel cell technology offers clear advantages over electric propulsion.
First Hydrogen aims to become the leading designer and manufacturer of zero-emission, long-range hydrogen-powered vehicles in the UK, EU and North America. Time is of the essence: Stricter emission targets issued by the EU will apply from 2025, which conventional internal combustion engines are currently unable to meet. However, electromobility is unsuitable for freight transport because its range is still far too short, and charging times are long. Hydrogen, on the other hand, is considered a versatile energy carrier and can offer a real alternative for the logistics sector. The fuel cell can play out many economic advantages here.
First Hydrogen is an innovative sector representative, entering product development with strong partners such as Ballard Power and AVL Powertrain. With its recently developed "Utility Van," First Hydrogen could really shake up the OEM market. That is because the Canadian Company, headquartered in Vancouver, can play a decisive advantage: In the investment phase, the new fuel cell systems do not compete for investment budgets that have already been allocated; instead, the Company starts from a greenfield site and incorporates all the latest findings, with virtually no limits on creativity.
The first commercial result is to be an H2-powered Sprinter, i.e. a small van with a payload of usually up to 3 tons. These short-haul vehicles are primarily used between cities and within towns for delivery purposes. First Hydrogen is also working with FEV Consulting GmbH of Aachen, Germany, to develop a prototype liquid hydrogen fueling station that will provide customers with first-class service within hydrogen mobility throughout the service life of First Hydrogen vehicles.
First Hydrogen made a real splash on the stock market at the end of the year. With about 53 million shares, the stock's capitalization increased by about 30% to a temporary CAD 125 million. Then slight profit-taking set in, and the current price fluctuates strongly between EUR 1.4 and EUR 1.7. The high trading volume, therefore, leaves room for any speculative positioning.
Plug Power versus FuelCell Energy - Who will start better in 2022?
The two best-known American representatives of the hydrogen sector are Plug Power and FuelCell Energy. However, after the massive sell-off between February and mid-May, it has become relatively quiet around the popular H2 stocks. What happened? The operating figures simply could not keep up with the valuations achieved, and reality returned to the share price formation.
At year-end, the Plug Power share was able to close at the zero line, which given a six-fold increase at the beginning of 2021, must be seen as a feat. Ultimately, only those investors who took a realistic view of the hype at a very early stage were able to earn money. Plug Power is currently still trading at a 2021 price-to-sales ratio of just under 28, assuming the 2021 revenue estimate of USD 496 million can be achieved. Nevertheless, 18 of 23 analysts are optimistic and expect a median price target of USD 49.8, i.e. around USD 20 premium to the currently traded price.
FuelCell Energy stock has been a real disaster for investors. After temporarily quadrupling, the negative performance reached a full minus 43% in 2021. With a market capitalization of USD 2.1 billion, the current P/E ratio is also still a high 22. However, the first profits are not expected until 2025, whereas for Plug Power, this could already be the case in 2024.
Both stocks will report on 2021 in February and March, respectively. For the well-known H2 stocks, the decisive factor will be how many orders one has been able to bring recently from public investment budgets in favor of climate neutrality. Only then can a serious estimate be made about the operational development. What remains undisputed is the considerable investment in research and development, which will probably not allow any net profits for shareholders for the time being. In a direct comparison, Plug Power is preferred because of its high capitalization.
The H2 sector is making a name for itself again at the beginning of the year. Almost double-digit price jumps were achieved in the first trading hours of 2022. The standard stocks remain Nel ASA and Plug Power, but recently the second-tier stock First Hydrogen has also attracted much attention. Those who want to invest wisely and risk-adjusted in the sector are best spread across several promising stocks like a fund.
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