Before the capital raise, a Chinese-based investor, Fuzhou Bonded Zone Hejili Equity, made a private placement to Hydrogenics (NASDAQ: HYGS) at a price that was 10 per cent above the average stock quote, meaning USD 7.83 per share. This has all the hallmarks of a good deal for Hydrogenics and shows the trust that the strategic investor has in its decision. Hejili paid USD 21 million for those shares and the outcome looks roughly equal to what Ballard Power got from its deal with Chinese-based Broad Ocean and Synergy, as it’s not only about capital and shares, but especially about technological advancements and the establishment of a joint production of fuel cell stacks. Hydrogenics is a good catch, as it manufactures power-to-gas systems, H2 filling stations and fuel cell modules for trucks, buses and railroad vehicles (see Alstom Transport).
Backlog rose to around USD 110 million, a good baseline for the current fiscal year and the years that follow. The gross profit margin is at a robust 30.3 per cent. Encouraging side note: In the United States, Hydrogenics has inaugurated the country’s biggest H2 filling station for filling up the latest-generation UPS courier vans based on fuel cell hybrid technology.
Investors must understand that buying and selling shares is done at their own risk. Consider spreading the risk as a sensible precaution. The fuel cell companies mentioned in this article are small and mid-cap ones, i.e., they do not represent stakes in big companies and the volatility is significantly higher. This article is not to be taken as a recommendation of what shares to buy or sell – it comes without any explicit or implicit guarantee or warranty. All information is based on publicly available sources and the assessments put forth in this article represent exclusively the author’s own opinion. This article focuses on mid-term and long-term perspectives and not short-term profit. The author may own shares in any of the companies mentioned in this article.
Author: Sven Jösting, written May 2017