The portfolio managed by the author with name BZVision (exchange-traded fund, BZ stands for the German term for fuel cell) on Wikifolio (www.wikifolio.com) perfectly reflects the development of fuel cell shares. After growth of over 100 percent per year in the years 2018 to 2020, the portfolio is now back to square one. While earlier, positions in FuelCell Energy, Plug Power and Hydrogenics (taken over by Cummins Engine) were contained, there are only three securities in the portfolio today: Ballard Power, Bloom Energy and Nikola Motors. Compared to a broadly diversified hydrogen ETF, this is highly speculative. The reasoning for this is that these three titles cover all aspects of the application of fuel cells and hydrogen. Whether transport (commercial vehicles such as trucks and buses, ship and rail transport), energy generation or in-house production of hydrogen. Geography too is taken into account (USA, Europe and Asia). This is not a recommendation. Once a month is a commentary on the portfolio and performance. BZVision: ISIN - DE000LS9QJG9 / WKN: WF00BZH2VI.
Why no recommendations for other FC securities?
I take a very close look at companies such as Nel Asa, ITM, PowerCell, Nucera and many others. As I assume that competition, especially from China, will increase significantly in the field of electrolyzers, it may even be that high growth in orders does not necessarily lead to higher profit margins. Leading Chinese solar cell manufacturers such as Longi are building large capacities in electrolyzers. The quality of these products are not – as talks with experts on site suggest – to be inferior to European producers, for example. However, there are large price differences. At the same time, demand for all types of electrolyzers (SOEC, PEM, alkaline) is increasing dramatically worldwide. Companies like Bloom Energy, Plug Power, FuelCell Energy and Siemens Energy adequately cover the area of electrolyzers as part of their business models – sometimes with technology leadership like at Bloom. Furthermore, the comparison of the stock market valuation of the companies in relation to sales, incoming orders and liquidity is a criterion. Clear, however, is: From the ramp-up of the hydrogen economy, all companies involved will benefit – including in their share price performance. Exciting are the prospects of big gas producers such as Linde, Air Products and Air Liquide. These will especially benefit from the subsidy programs for green hydrogen. In the next issue of H2-international, there will be more background on this.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. 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 medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
