April 16th, 2024 | 07:20 CEST
Plug Power deeply in the red! Thyssenkrupp Nucera and First Hydrogen shares with positive newsflow and upside potential!
Not only is Plug Power's share price in the red, but also its earnings for the year 2023. Losses at the US company are still growing faster than revenue. Together with its struggling industry peer, Nel ASA, Plug is dragging down the entire hydrogen sector. However, there are positive developments. For example, the hydrogen-powered fuel cell commercial vehicle from First Hydrogen in England has impressed in test drives under real conditions. The Company is currently valued at only CAD 50 million and offers an entry opportunity. Analysts also see more than 100% upside potential for Thyssekrupp Nucera. Is the wheat separating from the chaff in the hydrogen sector?
time to read: 4 minutes
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Author:
Fabian Lorenz
ISIN:
PLUG POWER INC. DL-_01 | US72919P2020 , THYSSENKRUPP NUCERA AG & CO KGAA | DE000NCA0001 , First Hydrogen Corp. | CA32057N1042
Table of contents:
Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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First Hydrogen: Share offers entry opportunity
Currently, the share of First Hydrogen presents an opportunity for entry or buying on the dip. After successfully bucking the industry trend for a long time and trading above EUR 1, the share price has slipped to around EUR 0.70 since March. As a result, the specialist in hydrogen-powered commercial vehicles from Canada is now only valued at around CAD 50 million. The Company, active in Europe and North America, has important milestones to achieve this year, some of which have already been reached in the first quarter.
The hydrogen-powered fuel cell commercial vehicle (FCEV) from First Hydrogen impressed during three test drives in real-world conditions, showcasing its driving behavior, rapid refueling, and range of 630 km on a single tank. The vehicles were tested by potential customers in the London, Scotland and Wales area. The utility company Wales & West Utilities (WWU), with more than 1,000 employees, not only tested the vehicle but also expanded its partnership with First Hydrogen to include the development of a hydrogen ecosystem for mobile refueling. Further test drives are planned with a wide range of partners.
First Hydrogen is also making progress in its home market. Fleet operators in the Canadian province of Quebec have shown great interest, the Company recently announced in its quarterly update. Hydrogen is significantly superior to battery-powered electric vehicles, particularly in the region's cold temperatures. Mass production for the North American market is also to take place in Canada. A plant with a production capacity of up to 25,000 vehicles per year is already being planned.
Balraj Mann, Group CEO of First Hydrogen, said: "We are building strong relationships with governments, potential customers and suppliers that align the need to reduce emissions with First Hydrogen's product offering. The market for green hydrogen in North America is gaining considerable strength. For example, the US Department of Energy announced a USD 7 billion program to establish seven clean hydrogen centers in the US as part of the National Clean Hydrogen Strategy and Roadmap."
Interested investors are encouraged to register for the 11th IIF digital investor conference. First Hydrogen will present live tomorrow, April 17, 2024, at 15.30 CET. Click here to register.
Plug Power: Depreciation hits the bottom line
While First Hydrogen is running smoothly, with hopes of soon receiving the first concrete orders for its hydrogen-powered commercial vehicle, Plug Power is facing challenges on many fronts. Despite the collapse in its share price over the past few years, the Company is still valued at around USD 2 billion. However, operationally, Plug Power is struggling to make progress. Although Plug Power's figures for the fourth quarter of 2023 confirm that the doubts previously expressed about the Company's ability to continue as a going concern no longer exist, it is still far from out of the woods.
The Company achieved a record revenue of USD 891 million, but growth was modest at 27%. However, the loss has increased even more significantly. Even gross profit was negative at USD 508 million (2022: USD -194 million). The net loss climbed from USD 724 million to USD 1.4 billion. It is, therefore, unclear when Plug Power will achieve a positive result.
Nevertheless, Plug CEO Andy Marsh is optimistic about the future: "This financial year was a crucial phase on our path to growth and sustainability in the hydrogen economy. We have recognized the cash management challenges of the past and aim to strengthen our financial profile in 2024. Our commitment to driving the hydrogen economy forward is unwavering. By leveraging existing investments and prudent cash management, we are well positioned for sustainable growth and further innovation in the renewable energy sector."
Thyssenkrupp Nucera: Positive newsflow fizzles out
Even if the share price does not currently reflect it, the news at Thyssenkrupp Nucera has recently been positive.
Initially, the German hydrogen hopeful reported on a collaboration with the Fraunhofer Institute for Ceramic Technologies and Systems IKTS in the field of high-temperature electrolysis. Together, the partners aim to bring high-temperature electrolysis (SOEC) to industrial application. A pilot plant is to be built first. The aim is to produce high-temperature electrolysis stacks with SOEC cells in small quantities by early 2025. *In addition, Thyssenkrupp Nucera is also benefiting from the funding boom in the US. The Company is receiving USD 50 million from the US Department of Energy for investments in electrolyser production and the manufacture of clean hydrogen. Nucera CEO Werner Ponikwar stated: "The transition from manual cell production to automotive-like mass production that can serve several GW projects per year will be the key factor in positioning our business optimally in the US. We are currently looking for the ideal location for this project, which will be close to customers, take advantage of the strong US labor market, and integrate ourselves as part of the local community*."
Following the news, there were also positive comments from analysts. Deutsche Bank, for example, reiterated its "Buy" recommendation for Thyssenkrupp Nucera shares. According to the analysts, the positive news flow shows that the development is going in the right direction. According to Deutsche Dank, the fair value of the Thyssenkrupp Nucera share is EUR 29. The share is currently trading at just under EUR 13. Berenberg has also confirmed its "Buy" recommendation with a target price of EUR 22. However, the Company's sales target for 2025 is ambitious. A positive order intake would increase visibility.
The share prices of Nucera and First Hydrogen demonstrate that positive news in the hydrogen sector is currently falling flat. Sentiment is too negative due to the disappointments at heavyweights Nel and Plug Power. While the shares of the latter two are often poised for a rebound, sustainable positive development requires more than just new orders and stable financing; it requires proof that the business model can become profitable. Therefore, Nucera and First Hydrogen currently appear to be the more interesting stocks in the hydrogen sector.
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