27. May 2021 | 08:40 CET
NEL, Plug Power, FuelCell, dynaCERT: Hydrogen stocks - is there a comeback?
At the start of the year, they were the hit stocks - the hydrogen stocks. The expectation was that governments would heavily subsidize hydrogen alongside electromobility to help another green alternative to the internal combustion engine get off the ground. The idea was good but failed on only one point: battery-powered vehicles already exist in large numbers, but H2 vehicles suitable for mass production do not yet exist. With a lack of products, no tax rebates or the like can be granted either. So today, the private consumer can only choose one green technology, the electric or hybrid drive. Is there still a future for hydrogen values?
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ISIN: NO0010081235 , US72919P2020 , US35952H6018 , CA26780A1084
"[...] 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 - Back in the downtrend
Unfortunately, there is no supporting fundamental news at Nel ASA. A previously reported order from the Spanish energy supplier Iberdrola has now been dropped from Nel's books. Just over four months ago, Nel announced a wide-ranging cooperation with the Spanish energy giant Iberdrola to produce green fertilizer. But now that the contract has been awarded to its competitor Cummins, it is a huge disappointment.
After a disappointing quarterly report for many investors, Nel ASA urgently needed this order to build up new confidence within the investor base. Instead, the most recent share price performance has led to a return to strong skepticism. It could have turned out differently.
Currently, the hydrogen share is stabilizing and can rise above EUR 1.70 again; at the beginning of the week, it was around EUR 1.62 at the low. After the crash of the last weeks, the rebreak above EUR 1.85 could actually have triggered the first indications of an upward turn. The Iberdrola news came now in between so let's see if another run-up succeeds.
Plug Power - An industry leader with big ambitions
As the industry leader, Plug Power has a role to play in signaling to its peers. Public investment budgets are often based on the performance of market leaders. Plug Power is currently looking for strong industry partners to help develop the green approach. This is the only way a technology topic can have a broad impact.
Johnson Matthey PLC announced that it plans to work with Plug Power in the future to accelerate the development of electrolyzer technology. The London-based specialty chemicals company and Plug Power plan to work together on a roadmap to improve electrolyzer technologies' longevity, performance, and efficiency.
The partnership combines Plug Power's hydrogen fuel cell technology, used to power vehicles and other machinery, with Johnson Matthey's platinum-based catalysts used in electrolyzer systems. Catalysts speed up chemical reactions by reducing the amount of energy needed to start a reaction. Typically, catalytic products are used to capture and treat exhaust gases from vehicles. Johnson Matthey plans to use appropriate recovery processes to create a closed-loop system within the supply chain to reduce waste and energy loss.
A Goldman Sachs study concludes that Plug Power is well-positioned to be a leader in the emerging green hydrogen market. We have a similar view. If Plug Power can break out above USD 30, the turnaround will have been achieved for the time being.
FuelCell Energy - Help in the form of a financial injection
FuelCell Energy shares have been in a pronounced downtrend since the beginning of February. From its high of USD 30, the stock lost about 70% of its value; the market capitalization dropped to USD 2.2 billion. Still much too high, many analysts will say, but market technology is sending the first positive signals.
Recently, it became known that the fuel cell company was promised a financial injection. Could this be the turning point? The US Department of Energy has awarded FuelCell a new grant of USD 8 million. This financial injection is intended to advance the development of the ultra-high efficiency solid oxide fuel cell (SOFC) for sub-megawatt power generation.
From a chart perspective, the USD 7.20 mark currently offers a small support. If this line holds, a movement towards USD 10.50 could be in the cards. However, to stop the downward trend in the long term, the FuelCell share would also have to break through the resistances at USD 12.50 and 15.50 and quickly, but there is still a rocky road to go until then.
dynaCERT - The fast track to fossil savings
dynaCERT's technology is suitable for mass production because it reduces greenhouse gas emissions by up to 19% by switching on a hydrogen additive. In contrast to the industry giants, the Canadians are still of manageable size and flexible. In other words, fleet measures of any kind can be planned and implemented at the round table within a short time. Especially in the transport industry, dynaCERT can quickly provide a remedy with relatively standardized construction measures, independent of the manufacturer. As a result, trucking companies earn carbon credits - valuable credits related to reducing fossil combustion.
Plug Power, FuelCell and Nel ASA are taking a different approach and focusing on the holistic nature of a new form of propulsion. Their units are large, construction-specific, and generally only suitable for public projects due to high implementation costs. When the pure H2 propulsion system will ultimately be available depends on the outcome of the test operations in public transport because this is precisely where the operational reliability of the systems is extensively tested.
Although the dynaCERT technology is also suitable for passenger cars, its use has been prevented by the high unit price of CAD 6,000. The consumer would also have to pay for the special equipment in advance. A lucrative area is opening up in mining technology, where decentralized power generators can be made cleaner with environmentally friendly equipment. Over 17 years, dynaCERT has invested CAD 70 million in its technologies, and the payback for the buyer is in the range of 1 year. A good ratio to be able to think of broad development with government grants.
dynaCERT was able to report great successes in the first half of 2021. The partnership with KarbonKleen in the area of freight forwarding customers is also already underway, and now they are preparing the higher-scale roll-out for the entire transport industry. Hopefully, this will also include rail transport and shipping, as this is where the most significant emissions of pollutants occur worldwide. In Europe, the diesel quota across all vehicles is still 53%, while in other continents such as South America, Africa or Asia, the country quotas are in some cases significantly higher. So the market is enormous - the ball just has to start rolling.
The dynaCERT share is currently trading relatively quietly on the market at around CAD 0.42, with a market value of around CAD 190 million - a very moderate valuation compared to the peer group.