July 6th, 2022 | 12:11 CEST
Plug Power, First Hydrogen, ThyssenKrupp, Nel ASA - Climate rescue stocks in focus!
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
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.
Plug Power - Many analysts still hold the flags high
Based in Latham, New York, Plug Power is one of the primary beneficiaries of the current search for alternatives in energy supply and future mobility. The advantage of green-produced hydrogen is not only the substitution of fossil fuels, but the production alone ensures more investment in environmentally friendly production processes. Unfortunately, in the case of fuel production in a refinery, this sustainability idea cannot be anchored.
Plug Power implements modern drive concepts. For example, it recently equipped a large number of Walmart forklifts with fuel cells. In addition to hydrogen for its 9,500 forklifts already in use, Plug Power also offers solutions for other types of vehicles and stationary energy supply. It is modern, sustainable and eminently feasible for giants like Walmart.
Plug Power is the H2 top dog and is now valued much more favorably than its competitors. It generated over USD 1.5 billion from two capital increases in 2021, so its coffers should still be well-filled. Although the analyst firm JPMorgan has lowered the price target from USD 32 to USD 28 due to interest rates, the consensus from all available ratings is still at a high of USD 34.28. The stock is now valued at USD 28. In the next upward cycle of growth stocks, the PLUG share should be among the frontrunners again.
First Hydrogen - Further milestones achieved in the UK
Another protagonist from the hydrogen sector is First Hydrogen from Canada. The Company has long since recognized the challenges of the market and put its H2 strategy on two legs early on. In addition to developing a production-ready commercial van (LCV) powered by fuel cells, it is also working on providing refueling points. Ballard Power and AVL Powertrain are the vehicle technology partners, and a fuel cell LCV prototype is to be ready for demonstration as early as this fall.
A further milestone has now been reached in the UK. The subsidiary First Hydrogen Ltd, based there, has now submitted two green hydrogen production projects for a first round of funding via strand 1 of the British government's Net Zero Hydrogen Fund (NZHF) program. The program includes funding from the Ministry of Business, Energy and Industrial Strategy (BEIS) totaling £240 million. The NZHF is part of the UK government's initiatives to achieve the ambitious target of 10 GW of domestic hydrogen production by 2030, of which at least 5 gigawatts must come from electrolytic sources. The Company's two projects each have an initial capacity of 40 MW and are to be located at Carrington in Greater Manchester and in the Thames Estuary area.
The partnerships in the UK now appear to be paying off. That is because First Hydrogen also received a letter of support for its projects from INOVYN, a subsidiary of INEOS, one of the EU's major hydrogen producers. The Greater Manchester Combined Authority has already approved and rolled out a regional hydrogen and fuel cell strategy to achieve the net-zero target by 2038. Manchester is a strong proponent of H2 technology, so First Hydrogen's investments are happening in a good policy environment. The Strand 1 applications are the first step in receiving financial support from the UK government. If approved, the projects will be followed through to the start of construction. Further strands will then support the construction and implementation of the business model. Risk-conscious investors get another entry opportunity into the FHYD share at the current 30% lower level of CAD 2.25, around EUR 1.70.
Nel ASA and ThyssenKrupp - A closer technical look is now needed
Hydrogen stocks were only temporarily high in investors' minds last year in 2021. After a dream rally in the first quarter with rises of several 100%, prices then fell back by over 70% from the top for some stocks.
Two well-known stocks are still in favor with investors because they have viable, long-range solutions in their portfolios. Nel produces green hydrogen and offers modern refueling systems via its Everfuel shareholding. The Group's order flow looks quite respectable. Currently, the long-announced "Hydrogen Hub" in Norway is materializing, as the hydrogen refueling station network has finally found a backer.
At ThyssenKrupp AG (TKA), the IPO of the H2 subsidiary Nucera had to be put on hold for market reasons, so, unfortunately, the valuable ideas are not getting sufficient financing. Fears of a recession and the aborted IPO have cost the MDAX stock more than 40% in value in less than a month. Added to this are the enormous debts and pension burdens; hopes that things would improve somewhat are thus, for the time being, invalidated. This news is not something investors like to hear at the moment - after all, the TKA share was still a DAX member and a German technology showcase until 2020.
Technically, the Nel share can still provide minor buying arguments if the EUR 1.05 mark holds in the medium term. Currently, the share is trading at EUR 1.23 and analysts are also broadly optimistic. JPMorgan is an exception, with an Underweight rating and a price target of 11.1 kroner, or EUR 1.07. The TKA share is now struggling again with its Corona low from 2020. Yesterday the value slipped below EUR 5 again. A test of the EUR 4.50 mark in the current sell-off must probably be expected. A medium-term brightening of the chart can technically only be identified above EUR 6.20. Keep a close eye on both stocks due to the high momentum.
Technology stocks are still under pressure. With yesterday's movement of the NDX below 11,400 points, it is technically dangerous again. In the current environment, the standard stocks are still falling. However, attractive second-tier stocks such as First Hydrogen are already experiencing slight increases.
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