July 5th, 2023 | 07:10 CEST
New hydrogen hopes: Nel, ThyssenKrupp and First Hydrogen
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"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
First Hydrogen too cheap?
Canada will play an important role in supplying Germany and Europe with hydrogen. This has been shown, among other things, by the visit of Federal Chancellor Scholz and Economics Minister Habeck this year, and this is exactly what First Hydrogen is counting on. The Canadian company is developing hydrogen fuel cell commercial vehicles and plans to build its own production facilities for green hydrogen.
The first-generation hydrogen commercial vehicle is well advanced. And there is positive news: the first series of tests under real road conditions in Great Britain at the fleet operator Rivus went well. Ranges of well over 500 km were achieved. Refueling took 5 to 7 minutes, which is similar to the time required for fossil fuel vehicles. Currently, other fleet operators are starting road tests. As a result, First Hydrogen is tapping into a market worth billions. The experts at researchanalyst.com estimate that the Company could soon be turning over up to EUR 1 billion a year with its commercial vehicles. Currently, the market capitalization is around EUR 100 million. The share price contains significantly less advance praise than, for example, Nel or Plug Power.
In addition, First Hydrogen has been working on building a hydrogen ecosystem since last year. It is currently developing a prototype for a customized refueling system. In the future, First Hydrogen plans to produce green hydrogen in Canada and sell it in North America and Europe. Two properties have now been purchased in the Canadian state of Quebec. A plant to produce up to 35 MW of green hydrogen annually is to be built there. A full update from researchanalyst.com is available here.
ThyssenKrupp in the Nucera hype?
On the sales side, ThyssenKrupp Nucera is already ahead of First Hydrogen, but also on the valuation side. The hydrogen subsidiary of the ThyssenKrupp Group is valued at EUR 2.4 to EUR 2.7 billion in the current IPO. In the first six months of fiscal 2022/23, Nucera increased sales by around 74% to EUR 306 million. EBIT stood at around EUR 13 million. Nucera employs more than 600 people and sees itself as a world-leading technology provider for high-efficiency electrolysis plants. The Company focuses on alkaline water electrolysis, which enables a larger and more centralized production of green hydrogen on an industrial scale.
The subscription period for the new shares ends today. The IPOs will offer up to 30.3 million shares in the price range of EUR 19 to EUR 21.50. As reported by the news agency Bloomberg, the issue price is to be set at EUR 20. The shares are then to be traded on the stock exchange from Friday. The issue price in the middle of the price range indicates that lavish short-term subscription gains are not to be expected. This may well be positive for the medium-term performance of the share. After all, a valuation of around EUR 4 billion was still considered possible some time ago. Nel is currently valued at around EUR 1.8 billion, and Plug Power at around USD 6 billion. Both companies are far from being in the black.
Nel: Analysts see price potential
The share of the Danish hydrogen pure-play is recommended as a buy by RBC. They say the latest order for the construction of 16 hydrogen refueling stations in the US state of California is a positive signal. According to the report, Nel will deliver the hydrogen refueling stations to California before the end of the current year. The order is worth USD 24 million. RBC analysts have a price target of NOK 22. The Nel share is currently trading at NOK 12.60, which means it continues to be battered on the chart. It has been in a clear downtrend since the annual high in February at NOK 18.86. The annual low from last fall is NOK 9.83 and should not be undercut.
Previous investor favourites Nel and Plug Power should certainly not be written off. However, they have often disappointed operationally in the past. Sales growth has been lower than expected, and losses have been higher. Accordingly, it is understandable to look at new players like Nucera and First Hydrogen. The IPO of Nucera does not seem hyped, and the Company is profitable. First Hydrogen is not highly valued at EUR 100 million. If commercialization succeeds in the coming years, then much higher prices are realistic.
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