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June 25th, 2021 | 12:32 CEST

NEL, Plug Power, Royal Helium - Things could get explosive here!

  • Helium
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The energy turnaround in Europe is tied to several factors. On the one hand, it is about reducing emissions, especially of harmful climate gases. On the other hand, companies want to leave a green footprint because it is good for the public reputation and opens other doors of refinancing on the investor level. Concerning ESG criteria, we certainly want to attribute ethical, ecological reasons to most companies. Nevertheless, the road to greater climate neutrality is still rocky and cost-intensive for most. Another prerequisite is that substitute materials and environmentally friendly precursors are equally subject to scarcity since supply chains have been broken. Therefore, the pivotal point for climate-oriented business is the factual competence of the "how," then the necessary means, and finally, the material availability.

time to read: 3 minutes | Author: André Will-Laudien
ISIN: NEL ASA NK-_20 | NO0010081235 , PLUG POWER INC. DL-_01 | US72919P2020 , ROYAL HELIUM LTD. | CA78029U2056

Table of contents:

    Nel ASA - Is the outbreak coming after all?

    Things have not been going so well at Nel ASA in recent months. The share has been under fire because the operating growth was estimated by investors to be much higher. Most recently, Nel also had to watch as large electrolysis contracts were awarded to a competitor. But now, the Norwegians are slowly coming back on the offensive. Earlier this week, Nel announced a cooperation for CO2-neutral steel production, and an additional framework agreement with Howden Group is still on the books.

    Howden has been a familiar name to investors since the takeover of Balcke-Dürr Rothemühle AG. Without solid partners for project coordination in the integration of large-scale plants, one is left out internationally. How could it be? Up to now, electrolysis plants of 2 MW or perhaps 10 MW were already worth a company announcement. But slowly, the resource hydrogen arrives in the industrial solutions. To that end, Nel has already announced a collaboration with energy services Company Aibel, which employs more than 4,000 people in the oil, gas and offshore wind industries. It provides engineering, construction, modifications and maintenance throughout the lifecycle of a project - just what Nel needs.

    With the latest news, Nel ASA is getting its feet back on the ground. We now return to Neutral after the sell-off but are still technically waiting for a breakout above the EUR 1.85 mark. So far, we have been very good in the trend analysis. Pay attention to the momentum.

    Plug Power - Not a bad quarter for refinancing

    With Plug Power, investors have had a real roller coaster ride - "hey, what a wild ride!" The sharp rise in the share price, which was naturally driven by euphoria, was immediately followed by a natural correction. A typical sign of this was also the strategic investment by the Korean SK Group near the January highs.

    In South Korea, the government began planning its hydrogen economy as early as 2019, intending to produce more than five million tons of hydrogen per year by 2040. The plan was to use that to supply about 6 million fuel-cell vehicles, with 1,200 fueling stations offering the coveted green hydrogen as a refueling option.

    According to McKinsey & Company, by 2050, the global hydrogen economy could be worth USD 2.5 trillion, representing 18% of the world's energy demand. Plug Power has already scaled the fuel cell, charging infrastructure and electrolyzer business well in the US. Very little is heard operationally from South Korea at present; the wounds from the expensive investment in Plug probably need to be digested first.

    In the meantime, Plug's management has been able to eliminate the main burdening factor of balance sheet uncertainties. The first quarter got off to a good start: Sales increased by 76.3% to USD 71.96 million, but a loss of USD 60.75 million remained due to high investments. The Company does not expect sustainable profits until around 2024. Plug Power raised more than USD 2 billion in the first quarter through share placements, so its equity ratio remained high at over 85%. The share price cheered these figures, shooting up 50% since the beginning of May. The next chart hurdle is the EUR 30 mark. Set a tight stop at EUR 26.40.

    Royal Helium - Major financing in the bag

    The world does not revolve around hydrogen alone. An essential technical gas is helium, mainly demanded by the fiber optics, computer and space industries. It is indispensable in the medical sector and is also used as a coolant in nuclear power. Worldwide, however, there are very few suppliers, so the price has increased a full 35% since March 2020.

    The Canadian Royal Helium Ltd. (RHC) is focused on the exploration and development of a major helium production project in southern Saskatchewan. With over 400,000 hectares of prospective acreage held under permits and leases, Royal is one of the largest helium producers in North America.

    In June, Royal Helium has now closed a major CAD 17.2 million financing round. The accompanying warrants have an exercise price of CAD 0.75 and run for 24 months. In the event of a rapid increase in the share price, this would secure the next capital raising. RHC is using the proceeds to fund an extensive drilling, exploration and development program in southern Saskatchewan, with Climax-4 expected to be drilled in mid-July. The Company is currently budgeting for 7 new wells in the Regolith zone. Based on the helium discoveries from the first three wells, it is believed that a total volume of 2.5 to 6.0 billion cubic feet of helium will be recovered. That would be a super result for investors and the tight helium market.

    RHC stock is currently very popular with investors - the share price has already gained 100% in 2021 - but has recently been consolidating due to the financing measures mentioned above. This calmer phase now allows for an orderly entry.

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    Der Autor

    André Will-Laudien

    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.

    About the author

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