Siemens Energy CEO Christian Bruch put it clearly in an interview to members of the German Hydrogen and Fuel Cell Association (DWV) a few months ago: The technology group wants to be a global player in the hydrogen sector – starting with electrolysis and ending with the use of hydrogen in various markets. The group is now being expanded in this direction, although in the short term the negative influence of the wind turbine subsidiary Gamesa (67 percent share, approx. 11 billion euros stock market value; that of Siemens Energy is only approx. 9 billion euros for 22 billion euros turnover) had a negative impact on their own balance sheet – a loss of minus 307 million euros.
However, I see considerable synergies here, since in the future hydrogen will also be produced via electrolysis at wind turbines, both offshore and onshore, and Siemens Energy’s know-how can be perfectly applied here. A company like Siemens Energy will always be at the forefront of many major global projects. Since large institutional investors are increasingly investing in environmental technology companies on the stock exchange, the Munich-based electrical engineering group will clearly also benefit. The current stock exchange valuation does not reflect these very good long-term prospects, with the share price at around 22 euros below the spin-off price of the Siemens parent, after having risen to over 35 euros in the meantime.
Every investor must always be aware of his own risk assessment when investing in shares and also consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid caps, i.e. they are not standard stocks and their volatility is also much higher. This report is not a buy recommendation – without commitment. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on a medium- and long-term valuation and not on a short-term profit. The author may be in possession of the shares presented here.
Author: Sven Jösting, written August 12th, 2021