Close menu

September 17th, 2021 | 11:23 CEST

NEL, Royal Helium, Linde, BASF - This is where it gets highly explosive!

  • Helium
Photo credits:

How will the energy transition play out in Europe? With hydrogen is one way. It is costly to produce if you look at the issue sustainably. The raw material itself is seen as an alternative building block of a green future and, according to experts, could become one of the most important energy sources in the coming decades. The water element is available in abundance, but what is lacking is a truly environmentally friendly way to convert it back into hydrogen and oxygen. Even under the best conditions, green hydrogen costs about 10 times as much to produce as Russian natural gas, which also burns fairly cleanly overall. What is next for this sector?

time to read: 4 minutes | Author: André Will-Laudien
ISIN: NEL ASA NK-_20 | NO0010081235 , ROYAL HELIUM LTD. | CA78029U2056 , LINDE PLC EO 0_001 | IE00BZ12WP82 , BASF SE NA O.N. | DE000BASF111

Table of contents:

    Nel ASA - This looks dangerous from a chart perspective

    The high production costs are one of the main reasons why no country has yet been able to implement any of the visionary H2 concepts on a large scale. Germany wants to change this in the future and is providing initial funding with a EUR 700 million support program, but it is not a real commitment to this new technology.

    By 2030, according to the plans, H2 generation capacities of up to five gigawatts are to be created in this country - that would be 50 times more than the 100 megawatts available today. Whether hydrogen is indeed the problem solver of the clean energy future remains questionable because the overall efficiency calculation, including the efficiency analysis, is still negative.

    Nel ASA, one of the prominent protagonists in hydrogen, is currently feeling the skepticism of the markets. Since the big hydrogen hype at the beginning of the year, the stock has been in decline. The growth in orders cannot keep up with the tight valuation. Since the all-time high of around EUR 3.40, the share price has now corrected by more than 65%, and if the line at EUR 1.30 is sustainably undercut, EUR 1.00 is also quickly conceivable. JP Morgan Chase placed the share at "Underweight" in mid-August, but its price target of NOK 15 has already been undershot.

    Royal Helium - New drilling results from Climax-4

    Away from hydrogen to helium. Canada-based Royal Helium Ltd. (RHC) explores and develops a major helium production project in southern Saskatchewan. With over 400,000 hectares of prospective acreage held under permits and leases, RHC is one of the largest helium producers in North America. Canada has the fifth-largest helium reserves globally and is increasingly in the spotlight of international technology producers.

    There are now good results to report from the Climax-4 property. A drilling depth of 2,701 meters has been completed. The completion program is underway and includes analysis of core samples taken and drill stem tests (DST) conducted over a continuous interval of 120 meters. Flow tests were conducted in the original Regolith zone and returned the highest and most consistent helium values to date in the entire Climax block. The new designation of this area is now Climax-Nazare.

    Due to the expanded test work, completion and analysis is expected to take an additional 30 to 45 days. Drilling dates for the areas at Ogema and Bengough in southeast Saskatchewan will be announced promptly once regulatory approvals have been received. Initial core inspection indicated that the newly discovered zone is not a true regolith zone but rather a thick sequence of interbedded metasedimentary and igneous rocks previously unknown in the area. Gas tests, DSTs and pressure tests at the bottom of the well indicate that this sequence is gas-laden with consistent detections of helium. DSTs in Climax-4 show a zone of approximately 70 meters of helium that is 80% thicker than that found in Climax-3. Based on the positive outlook, management is accelerating its efforts to a total of 30 square miles.

    RHC shares have recently traded slightly lower due to their strong performance since January. At CAD 0.46, the correction from the top is now 50%. With a valuation of CAD 65 million, the Company now has enormous potential again as the project moves forward dynamically.

    Linde and BASF - The standard stocks for industrial raw materials

    Looking in the extended peer group of blue chips, you will quickly encounter the German giants Linde and BASF in the industrial gases and commodity derivatives sectors. They have a good indicator function for economic development because their intermediate products are essential for manufacturing high-tech products.

    Linde became the world leader in industrial gases and process equipment ahead of its French rival, Air Liquide, when it merged with Praxair, a US competitor also founded by Carl von Linde and confiscated during World War I. Linde is now headquartered in Dublin, Ireland, but the Company remains a DAX member. The Badische Anilin- und SodaFabrik (BASF) dates back to 1865 and, like Linde, is also a founding member of the DAX family.

    Both Linde and BASF have performed excellently over the past 12 months, up 27% and 20%, respectively. That shows the robustness of the completely misjudged industrial demand since the outbreak of the pandemic. Interestingly, however, there are striking valuation differences. With sales of EUR 22 billion, Linde plc is much more highly valued with a P/E of 5.5 than BASF with a P/E of 0.8. Also, comparing P/E (30 to 10) and dividend yield (1.5% to 5.3%), the numbers favor investment in BASF. The big difference lies in profitability. EBIT margins are in the range of 24-27% for Linde and only 8-10% in the case of BASF. Another striking feature: Linde's market capitalization is twice as high as BASF's, namely an impressive EUR 137 billion versus EUR 61 billion.

    Both companies are rock solid; BASF is more cyclical overall and thus carries a higher risk discount. Linde is seen as more dynamic and more cyclically resistant. However, in an environment characterized by scarcity, both stocks should continue to run in the medium term. Technically, a correction could be imminent for Linde, while BASF has been running sideways for several months.

    The values presented here provide a good illustration of the state of industrial stocks. The Corona pandemic led to absolute scarcity prices in certain sectors, which caused high markups in purchase prices. Gases are indispensable in technological processes, and this is especially true for the scarce helium. That is why Canadian Royal Helium Ltd. should always be on the radar.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.

    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

    Related comments:

    Commented by Stefan Feulner on November 24th, 2021 | 11:28 CET

    SMA Solar, Royal Helium, RWE - Beware of inflation

    • Helium

    One can almost no longer hear this topic. In addition to the rising numbers of infections due to the fourth wave in the midst of the Corona pandemic and the escalating discussions about compulsory vaccination, the scarcity of raw materials and supplies is the central issue of our time. How long before the chip crisis in the automotive industry ends, can Apple produce enough smartphones so that we can put them under the Christmas tree for our loved ones, which, by the way, is also likely to be more expensive this year than last season. Scarcity will continue to accompany society in the coming years, be prepared for it.


    Commented by Nico Popp on November 12th, 2021 | 11:57 CET

    BASF, Royal Helium, Linde: This market is at the very beginning

    • Helium

    Industrial gases are in demand - and expensive. Even gases such as Helium are not immune to price increases. Chemical giant BASF calls the noble gas valuable in a press release and, together with Linde, presented a process that can be used to extract Helium from natural gas production. In other regions, the extraction of Helium, which is used in medical devices and chip production, even succeeds independently of by-products - given the long-term dwindling production of fossil fuels, this is becoming increasingly important. We present three stocks.


    Commented by Carsten Mainitz on November 3rd, 2021 | 12:34 CET

    Royal Helium, dynaCERT, Gazprom - What is next?

    • Helium

    The oil and gas sector has long been a popular investment area. However, when it comes to gas, hydrogen company share certificates have been more in the spotlight in recent months. A more exciting and also little-noticed field is the noble gas helium. We take a broad look at the investment stories in the gas sector.