Hydrogenics (HYGS, US$9.50) already has that which Ballard is planning with Chinese firm CSR in the bag: the company is providing Alstom with FC technology for use in trains. Order value: minimum of US$50m. over a time frame of ten years.
In early May 2015, the company was also able to report a technological breakthrough with the presentation of the most powerful electrolyzer in the world (narration: “a new industry standard”): 1.5-MW PEM system. It is to be used in the E.ON power-to-gas station in Hamburg-Reitbrook. While the figures for the first quarter turned out to be disappointing (a loss of US$3.4m.), the forecast for the entire year of 2015 remains unchanged, as the company has an order backlog of more than US$60m. (plus the prospect of other orders, according to TelKo). In addition to this, the figures for the first quarter are apparently based on accounting modalities. At the same time as this, financing in sum total of US$7.5m. has been concluded (a loan), which is linked with an option to purchase 25,000 shares each costing US$15.00 in order to finance the growth of the company.
The bottom line: a technological leader in power-to-gas systems and H2 filling stations, so far, the company has been neglected on the stock markets – also due to its low market valuation. In my opinion, a partnership with Ballard Power would be a good idea (FC buses, H2 production – comparative with Plug Power). And: the capacity for H2 production at reasonable conditions is an important basis for the use of renewable energies for converting water into H2 and O2.
Note on risk
Every investor should be aware of their own risk assessment when investing in shares and pay due consideration to an appropriate spreading of risk. This report does not constitute purchasing recommendations – without guarantee. All of the data revolves around publicly accessible sources and in terms of the assessment only represent the personal opinion of the author.
This analysis was written June 1st 2015.
Author: Sven Joesting