March 18th, 2022 | 12:30 CET
Plug Power, dynaCERT, Nel ASA - Hydrogen market worth billions
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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
Plug Power - CEO talks to important people in the EU
Plug Power is the top dog in the hydrogen market. The Company is now networked worldwide due to its various projects. The Ukraine crisis could boost the share, as the EU has raised its REPowerEU targets from 10 to 25 gigawatts for hydrogen production by 2030. Politicians are getting information first hand, as CEO Andy Marsh tweeted on March 15: "Having dinner tonight with members of the Atlantic Council in Brussels and meetings tomorrow with EU leadership." On March 16, Plug Power's Twitter account featured a photo of Andy Marsh and the Belgian Minister of Energy.
To get a piece of the pie, you need access to Europe, and Plug Power has that with its European headquarters in Duisburg and its joint ventures with Renault and Acciona. The Company is also investing in other ways to expand its product portfolio. In order to gain access to the technology for liquefying hydrogen, Joule Processing was acquired. It offers the opportunity to optimize transport and save costs. The purchase price of USD 30 million is reasonable. If the technology is successful, the price could rise by USD 100 million, a price that would then be justifiable.
The current market environment should play right into the hands of the hydrogen companies and especially Plug Power. The share price, which formed an initial slight upward trend after the start of the Ukraine conflict, also shows this. This trend would only have been broken with closing prices below USD 18.30. Currently, the share price stands at USD 24. It will be interesting to see whether Andy Marsh's dinner will result in positive news for the Company.
dynaCERT - 28% increase in recent days
The road will be rocky until the entire logistics fleet worldwide has switched to hydrogen. Hydrogen offers the advantage of faster refueling time and more power and thus currently has the edge over the electric approach in heavy-duty operations. Against the background of the current high diesel prices, dynaCERT offers an interesting alternative. The Company sells and installs transportable hydrogen generator retrofit products called HydraGEN. The advantage of the patented system lies in reduced fuel consumption, longer engine life and overall lower emissions. The retrofit unit produces hydrogen and oxygen on demand and optimizes injection using HydraLytica software.
This software is at the heart of the plan for users to receive CO2 certificates in the future when they use HydraGEN, adding value to the customer's carbon footprint. Together with Verra, they are working to meet the standards of the Verified Carbon Program. Tesla has already shown that it is possible to make a lot of money with these certificates. While waiting for the completion of the program, there has been a slight change in personnel. As announced in December, Chief Operating Officer Robert Maier left dynaCERT on January 5. On February 15, the Company announced the resignation of board member Stephen Kukucha. It is currently unclear whether the vacant positions will be filled.
The Company has great potential but has been set back by Corona. It has a good product and an extremely exciting approach to CO2 allowances that was pushed during Corona, but so far, the positive news is missing. If the Company gets its horsepower on the road, nothing stands in the way of a turnaround. The fact is, the Company must deliver because the stock has fallen from CAD 0.86 to CAD 0.15. What is striking is that the stock has gained over 28% since March 4. Currently, it is trading at CAD 0.20. Perhaps some good news is in store here soon.
Nel ASA - Increase in production capacity
In Europe, Nel ASA is a big player in the hydrogen sector. However, despite the shareholders' joy with the stock in 2020, the share saw its high point on January 8, 2021. After that, it went down more than 70%. Now that the EU is looking for alternatives to Russian energy imports, the share could move away from its lows. The main reason is the subsidies from the EU, which can help the Company finally get into the profit zone. The last quarterly figures were disappointing.
Recently, the Company was able to score with good news. On March 17, an order from Solar Foods was announced. The food producer will receive an alkaline electrolyzer system. The Company can now also supply larger quantities of electrolyzers. According to the March 10 announcement, the new fully automated production facility can produce up to 500 megawatts of electrolyzers. An increase in capacity up to 2 gigawatts is also already planned. The order books are full, so the Company can now show that it is getting its act together.
On the negative side, members of management have repeatedly sold shares recently. CEO Jon Andre Lokke sold 1 million shares at an average of 12.8643 Norwegian kroner (NOK). On March 3, Finn Jebsen sold 260,000 shares at an average of NOK 15.0523. An initial uptrend was formed after the stock retested support at NOK 11 on February 24. Closing prices below NOK 12.58 would break the upward trend. The hydrogen market is volatile, so paying attention to your stop limits is essential. Fundamentally, the share is still expensive.
The political climate is favorable for the hydrogen market, but one should be on guard. All three companies are not making money yet. The most significant hydrogen player is Plug Power. If the technology catches on and the price of hydrogen drops, the share should be in the portfolio. For the transition, dynaCERT is a good choice because the extremely high fuel prices mean that a retrofit system quickly pays for itself. Nel ASA must now use the tailwind to get on the road to success.
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