The manufacture of the new powerful LCS stack, through a Weichai-Ballard joint venture in China, will start in the second half, or around the middle, of 2020. In my opinion, it will lay the foundation for high, long-term growth in revenue and profit. Considering what month it is, we will not have to wait long to find out. The positive news coming from this will form the basis for price trends throughout the year. I estimate a big jump, as Ballard Power is the global leader in manufacturing fuel cells.
Bloom Energy stock rose for a good while, to around USD 14, before falling dramatically. The plunge was a result of the company’s relatively weak performance in the fourth quarter of 2019 and the same-quarter restatement of managed service agreements entered into between 2016 and the end of last year. Instead of over the duration of the contract, the revenue for managed services transactions had been recognized upfront.
After the gas industry, the heating industry is now also increasingly relying on hydrogen. Although the absolute sales figures for fuel cell heaters are still low, a clear growth trend can be observed. In 2019, the number of funding applications rose by 30 percent compared with the same period of the previous year.
Forget the quarterly figures for Ballard Power this year. They are only important to analysts. The CEO already said at the beginning of the year and recently underlined in a Bloomberg interview that this calendar year will be used to build capacity in China (production of the LCS stacks together with Weichai), among other things, to position themselves, to strengthen the central production and R&D location in Vancouver, to expand the workforce and to tackle pilot projects as a basis for orders.
At the dawn of the new millennium, the shares of fuel cell companies had gone through the roof. Fuel cells were thought of as the next big breakthrough technology, and it seemed as if large, new growth markets were just waiting to be exploited. But shareholders were mistaken, celebrating too early. The industry’s leading businesses stumbled over the immense cost to develop and introduce new technologies. Likewise, a lot of them were spread too thin, trying to serve too many markets with too many products at once. Instead of concentrating research on a few promising segments, some allocated resources to several – regardless of their potential.
On March 1, 2017, China Today reported in detail about the Asian country’s joint efforts together with Canada in environmental protection and clean energies. Canadian-based Ballard Power Systems was mentioned as a model example and positive force behind many fuel cell and mass transportation projects and agreements in China (bus, rails). What Ballard and the fuel cell companies discussed in the following articles have in common is that they will be in the black in two to three years’ time and that the fuel cell markets are at a turning point for the better. The five businesses and their shares should be viewed based on their very promising long-term outlook and not based on their admittedly disappointing short-term results.
Whichever enterprise figure is in the focus of the stock market, it will become the basis for share price development: With around US$ 31.5 million in the third quarter, Plug did deliver the expected turnover revenue, but had to continue posting a loss that the stock market took as a negative sign (expressed in US cents per share).
Ballard Power is placing a bigger focus on China, evidenced by the various agreements with Chinese companies from the field of bus manufacturing and the development of hydrogen-driven rail vehicles. According to company information, the Canadian fuel-cell manufacturer paid special attention to only collaborate with known, reputable partners, whether big or small, which enjoy their own location advantages.