Although the price of Weichai Power fell away steadily in recent months, it has bounced back very strongly in recent weeks by more than 35 percent. Weichai, as a leading producer of diesel engines in China, is the perfect counterpart to the American corporation Cummins, which is very aggressively expanding its hydrogen and fuel cell activities, and as such is hedging Weichai’s future strategy. For Cummins, the acquisition of Canadian firm Hydrogenics was its ticket into the world of hydrogen. For Weichai, it was its stake in Ballard Power (probably currently standing at about 15 percent) and the joint production of commercial vehicle stacks in a joint venture (51:49).
Conclusion: Weichai Power is for me a seismograph for fuel cells in China with its more than EUR 20 billion in annual revenue and good profits, and should be seen as a blue chip of the industry. The joint venture with Ballard might even be floated on the stock exchange. Its stakes in Kion and in Ceres Power and Ballard are alone valued at more than EUR 5 billion.
Risk warning
Share trading can result in a total loss of your investment. Consider spreading the risk as a sensible precaution. The fuel cell companies mentioned in this article are small- and mid-cap businesses, which means their stocks may experience high volatility. The information in this article is based on publicly available sources, and the views and opinions expressed herein are those of the author only. They are not to be taken as a suggestion of what stocks to buy or sell and come without any explicit or implicit guarantee or warranty. The author focuses on mid-term and long-term prospects, not short-term gains, and may own shares in the company or the companies being analyzed.
Written by Sven Jösting December 7, 2021
