16. August 2021 | 10:16 CET
NEL, Pure Extraction, Deutsche Post: Hydrogen becomes practical
The Union's candidate for chancellor and CDU chairman Armin Laschet only received a loud laugh when he asked Tesla boss Elon Musk about the chances for hydrogen as a fuel for cars. The question is entirely justified. Although the trend for cars is clearly towards electric vehicles, hydrogen could be the solution for delivery vans, trucks or ships. Reason enough to take a closer look at participating companies and potential customers.
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ISIN: NEL ASA NK-_20 | NO0010081235 , PURE EXTRACTION CORP. | CA74622J1012 , DEUTSCHE POST AG NA O.N. | DE0005552004
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
NEL: Where is the bottom?
When German private investors think of hydrogen, the name NEL quickly comes to mind. The specialist in hydrogen production, storage, and transport always comes into play when hydrogen filling stations are mentioned. The Company has already received several orders in this area. But if you compare the market capitalization of just over EUR 2 billion and the order volume, you can see that at NEL, it is primarily the future that is being traded. Three hydrogen filling stations here and a letter of intent there are not yet a success when you are already a billion-dollar company on the stock market.
Although the stock seems cheap after the end of the hype, the Company is still ambitiously valued. In addition, large chemical companies are increasingly offering solutions around hydrogen. It remains to be seen to what extent newcomers like NEL will be needed in the end. The share is likely to profit from a renewed hydrogen hype because the value is so well known. However, the extent to which the Company can also score operationally remains to be seen. The share is battered from a chart perspective. A look from the sidelines is a good idea.
First Hydrogen: Market rewards hydrogen ideas
The situation is somewhat different at Pure Extraction. The Company, which is about to change its name to First Hydrogen, is developing a hydrogen delivery vehicle with well-known partners. Unlike NEL, for example, the Company has not yet been hyped up on the stock market - its market capitalization is just over EUR 40 million. Most recently, First Hydrogen got the green light for contracts with AVL Powertrain and Ballard Power. Both companies will support First Hydrogen and supply fuel cells and other materials and know-how. First Hydrogen is expected to hold all commercial rights for the vehicle design at the end of the collaboration.
At the same time, First Hydrogen raised CAD 3 million in a private placement. To this end, 2.4 million shares were issued at CAD 1.25, each with a subscription right for one additional share starting at prices of CAD 2. The share price increased due to the investor confidence gained and is worth considering for interested hydrogen investors. However, given the volatility of the share, a cautious entry is advisable. First Hydrogen is a startup - with all the risks, but also opportunities.
Deutsche Post: Always on the lookout for innovations
One of First Hydrogen's potential customers could be Deutsche Post. The Company was an early mover when it came to testing alternative drives. DHL's electric vehicles are legendary, and although they are no longer being developed further, they are still an indication that "Deutsche Post" is a progressive thinker. Most recently, the Company even announced its intention to look into the topic of "electric aircraft".
The Deutsche Post share is not a high-flyer, but it is a solid one: It has risen by more than 50% over a year. The Company is benefiting from the fact that people are ordering more and more online. But its business with professional customers has also come back after the peak phase of the pandemic. The share continues to have clear growth prospects and is also regarded as a kind of basic provider. Logistics remains in demand even in a digital world. In addition, modern technology, such as blockchain, also opens up opportunities for large logistics companies. Greater efficiency ensures speed and more stable margins again. If you think conservatively, you can always have the Deutsche Post share at the back of your mind.
The example of NEL, First Hydrogen and Deutsche Post shows how much some industries are interrelated. On the one hand, young companies are working on future technology, while on the other hand, customers are waiting for tailor-made solutions. While NEL is no longer anything new for investors, First Hydrogen could turn out to be an insider tip in the long term. The startup is still in its infancy, but its plans for a hydrogen delivery van for business customers make a good impression.