Plug Power already announced weeks ago that the target turnover for this year will be five to ten percent lower than the originally projected 900 to 925 million USD for 2022. The third quarter led to a turnover of 188.6 million USD (plus of 31.1 percent from the year before), which however was about 55.6 million USD less than analysts on average had expected. The loss, a minus of 170 million USD, lay in line with expectations. In 2023 should then be a turnover of 1.4 billion USD. Plug still has a healthy cash basis, composed of 1.5 billion USD in liquid assets and around 1 billion USD in marketable securities.
The company is working to be able to produce its own hydrogen and offer it at one-third the price of what industrial gas producers have. By the end of 2022, a production capacity of 50 tonnes per day is to be reached (it was previously to be 70 tonnes per day), and 200 tonnes per day by the end of 2023. Only recently was reported that it will hold off from building production facilities in Pennsylvania and Canada and there would be setbacks at a facility in New York. In the less than informative press conference on the accounting for the third quarter, the large-scale cooperation with Australian company Fortescue Future Industries of billionaire Andrew Forrest – they’re jointly building large electrolysis capacities – was not mentioned, to our surprise. In any case, we have not read, but also not overlooked, this.
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Cooperation with Lidl – Projects all over
Of projects and cooperations, there is no lack. Recently, Plug Power was able to gain the German supermarket chain Lidl as a customer, who plans to use hydrogen in transport vehicles as well as forklifts. We’re missing here, however, concrete figures (order values), but which Plug will certainly provide in due course. A respectable success – no question about it.
Sealhyfe project starting – First floating electrolyzer
Together with the French hydrogen project operator Lhyfe, Plug has installed the first floating electrolyzer in a wind park at sea. Off the French coast, 400 kg of hydrogen is to be produced daily, and after six months the floating electrolyzer is to be tried out at two further sites for six months each. It has an output capacity of 1 MW. Lhyfe – we reported – has given Plug orders for electrolyzers in a total capacity of 50 MW.
Investor symposium
In an investor symposium held online, it was said that Plug is positioning itself in various hydrogen markets, building a variety of production sites for, among other things, electrolyzers (2.5 GW annual capacity), and investing heavily in the production of hydrogen (liquid, as it is cheaper to transport). Much sounds ambitious. The North American company sees itself developing into a market leader. The Inflation Reduction Act has particular importance in this, as it could enable green hydrogen to have a price advantage over gray (natural gas-based) hydrogen in the US and therefore very good growth prospects.
Plug is on its way, but will still need a great deal of capital before moving into the profit zone, so time needs to be given for these investments. The latest forecast from the company itself, that the envisioned turnover for this year is ending up around five to ten percent lower than planned, does not bode for the time being good quarterly figures nor impute high ongoing, albeit logical, losses (from the invest in production facilities). Thanks to good IR (investor relations), the share price will rise again when the entire industry regains its footing on the stock market.
Our cautious assessment of Plug Power is proving more and more true. The company has too many construction projects going at the same time, which allows liquidity to shrink quickly. With the planned investments totaling 1.5 billion USD, the liquid base will fall to 1 billion USD by the end of 2023, which will maybe have further capital raisings (issuance of shares) as a consequence. With the around 9 billion USD valuation, the stock market has shown its new view of things. Plug is going along its way in the area of hydrogen, fuel cells and electrolysis, and will itself produce hydrogen here very economic-efficiently via scaling effects and be able to earn money this way. We’re assuming that sometime in the next two years, the valuation of Bloom Energy can be topped or matched by Plug Power. Since Plug is represented in all major H2 stock funds, the share will certainly benefit from the overall H2 megatrend.
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. Author: written by Sven Jösting December 12th, 2022
Author: written by Sven Jösting December 12th, 2022
The turnaround we’ve been forecasting for some time is in sight. Year 2024, according to the predictions of board chairman Christian Bruch, will bring profit. The share price has turned around noticeably and rose nearly 50 percent compared with the lowest price. The numbers: The turnover of 29 billion EUR lay in the realm of expectations (minus 2.5 percent is due to extraordinary developments – to Ukraine alone is attributed a loss of 200 million EUR). There was a loss in the amount of 647 million EUR, which is a consequence of integrating the nearly 1 billion EUR reported loss from Siemens Gamesa.
The order volume is excellent: This rose in the fourth quarter, based on 2022/09/30 data, to an equivalent of 97.4 billion EUR – a good basis for the future of the corporation. Growth of three to seven percent is now expected and depends on Siemens Gamesa being able to be fully integrated in the next 12 to 24 months and ultimately also generate a positive profit contribution.
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Stock market valuation was a joke
Siemens Energy was still valuated a few weeks ago at just 8 billion EUR, but the current value of around 12 billion EUR does not correspond to the potential of this big business. For the weak stock market price, the planned acquisition of the remaining shares in the wind subsidiary Siemens Gamesa was to blame, as there were audits by the Spanish regulatory authority (CMMV) that dragged the integration, or full takeover, out even longer. And clear is also: 2,900 jobs (10% of total workforce) will be cut and the company Gamesa will become part of Siemens Energy.
The positioning of Siemens Energy in important future markets such as hydrogen (order boom!), however, will sooner or later need to lead to a revaluation of the corporation – in accordance with the sustainable profit and increasing sales. Based on the current ridiculous valuation, Siemens Energy could even be a candidate for takeover. Nothing is impossible.
Those who bet on the turnaround will build up new positions or cheapen existing ones. This will not be a quick fix but should be an investment over a period of at least one to three years. There will still be many a quarter of losses, which is the fault of the costs of reorganization and the integration of Siemens Gamesa. On the other hand, there are many exciting technological developments such as rotor blades for wind turbines that can now be recycled, which has been a major problem so far.
Since a few days ago, you can see a turnaround in the stock. The stock market anticipates future developments, so little by little there will be better prices again. Since big investors like BlackRock have the area Siemens Energy is in in focus, a lot of new capital will flow in from here. In addition, Siemens Energy is back in the DAX. Stay tuned. My price target within the next 12 to 18 months: 30 euros plus.
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.
Author: written by Sven Jösting December 12th, 2022
We’re seeing a steep decline in earnings at Weichai Power: 2.387 billion CNY gain (minus 63.3 percent compared with the previous year) with a 35.9 percent turnover decrease to 86.74 billion CNY. The subsidiary Kion (45% stake) even saw its share price fall on the stock market from over 120 to 20 EUR (recently strongly increased again) due to a profit slump in the course of the year: 210.6 million EUR gain after the 691.1 million EUR in the prior-year period of the first nine months, although turnover in the reported period was able to be upped from 8.24 to 8.4 billion EUR. Supply chain problems as well as cost increases (for raw materials, etc.) were cited as the basis.
Weichai’s valuation – compared to the 30 billion USD of Cummins Engine – is quite low: just 10 billion USD for the market leader in diesel engines in China. In the third quarter, it suffered a slump in diesel engine deliveries to 136,000 units, which corresponds to a 32 percent decline. Shareholders are viewing all this critically, but there are still psychological influences that can’t be accounted for in this type of assessment.
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There’s no doubting the fact, however, that China is committing increasingly more to hydrogen and fuel cells, and Weichai will clearly be among the beneficiaries, as they are perfectly – also see Ballard – positioned. For us, a key investment in the hydrogen sector of China. The share has moved noticeably upwards again in recent weeks and should be able to reach quite different, and indeed higher, rates in the coming years, when the fuel cell strategy outlined in the national provisions gains momentum in implementation.
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.
Author: written by Sven Jösting December 12th, 2022
It’s kicking off in the USA: The Inflation Reduction Act with its billions in funding (369 billion USD), among other things for the ramp-up of the hydrogen economy, is giving hope. I was able to witness this myself live via video stream at the 2nd Hydrogen Americas Summit. In Washington, many board members of well-known companies showed their histories with hydrogen and reported their plans. Hydrogen has always had a place, but the time is now here to massively expand its scope in order to solve environmental and climate issues and to see hydrogen as a game changer for the world.
Energy security too was stressed. The next ten years in hydrogen development will change the world, during which the US plans to produce an initial 10 million metric tons per year. It is fundamentally different today than it was in the decades before. The mix of measures for the ramp-up can be listed as follows:
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– Incentives (tax breaks, cash grants)
– Policy framework (regulations, standards)
– Demand conditions (markets)
– Climate influence (climate change questions)
– Energy security (security of supply)
– Inflation Reduction Act as an initial spark
There’s need to become H2-ready. This entails conversion of existing infrastructure (gas pipelines, etc.) for hydrogen. There’s already an infrastructure for ammonia, so green hydrogen will see its first big market here if ammonia is used as a medium for transporting hydrogen alongside the use in fertilizer production.
The issue of hydrogen must be approached locally as well as globally at the same time, it was said. For this, cooperation between old industries and new players is necessary, and even a prerequisite and condition for a successful ramp-up of the hydrogen economy. The other side must also be taken into account, however, which is based on jealous competition, market prevention and protection of vested interests, since not all players find the development good.
But healthy competition is also needed. Here, government representatives from Canada and the US came in, and according to their statements, competition in the implementation of a hydrogen strategy will occur with true sportsmanship. Demand must be created for hydrogen. One of the first markets will be transportation (here: commercial vehicles, ships and trains) as the “driving force & source.”
A statement from Christian Bruch, board chairman of Siemens Energy, regarding the Act described it best: “This will bring about investments from many companies in the US. One can certainly debate whether America is funding too much and fueling subsidy competition, but the need for renewable energies is far too great everywhere. What makes America different from Europe: the USA is open to technology. There isn’t talk about green or blue hydrogen, but about hydrogen. The subsidy eligibility conditions are simple; everyone can understand them. There’s a wave coming that has the chance to reindustrialize the USA.”
There are 18 sectors in which hydrogen is needed. It will start off with “early mover markets,” to which heavy transport belongs (heavy-duty trucking industry). But other markets will also emerge and grow, like communication towers, as there are over 600,000 in India powered by diesel engines and 10,000 police radio towers in the USA that in the future will be powered by hydrogen via fuel cells. In the case of forklift trucks, we can already see that more and more are running on hydrogen instead of diesel or battery-electric.
Many market participants are suddenly all seeing their future in this market at the same time. Here, comparisons can be made to the beginning of the Internet, of the WWW, which changed the whole world as a new disruptive system. Whether financiers (banks, VCs) or technology suppliers, consulting firms, clients or governments – they now all want to enter the hydrogen age.
Also heard were comparisons to the beginnings of the solar industry, where 30 years ago, one kWh cost 2.50 US dollars, and today, only 0.025 cents. With batteries, it took 15 years for the energy density and price to initiate a new market. The same will happen with green hydrogen, for which the majority of analysts foresee a price of 1 USD per kg for year 2040, and expect 1 to 2 USD per kg already by year 2030.
Hydrogen will be obtained from many sources, including biogas and waste recovery. With this, it should also be “grid-friendly,” meaning able to be transported and used in the existing infrastructure (for example blended in the natural gas grid). The optimization of all components as well as their integration in particular will take on importance.
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.
Author: written by Sven Jösting December 12th, 2022
Those who weren’t familiar with Refire before can now think of the fuel cell company every time they hear the name Clean Logistics, because the startup from Niedersachsen has a supply contract for fuel cell systems from the company. So it’s not surprising that Audrey Ma, Refire Group Vice President International Markets, had been invited to be a guest of honor at the presentation ceremony for Clean Logistics’ truck Fyuriant truck launch this past summer in Stade (see H2-international Oct. 2022). H2-international had the opportunity to speak with Ms. Ma during IAA Transportation 2022 in Hannover.
H2-international: Ms. Ma, how long has Refire been around and how long have you been with the company?
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Ma: Yesterday was actually the seven-year anniversary of the Refire Group. It started out as a very small team. The founders were three engineers who worked in the area of fuel cell technology. I joined the company at the beginning of 2017 and within these few years, we’ve grown to a team of nearly 700.
What was your goal at the time?
Our common goal was to further develop fuel cell technology for commercialization, which is now all around us at this trade fair. I believe we’ve contributed to making fuel cell technology market ready.
Could you give us examples of how?
In 2017, we put our first FC vehicle fleet – 500 7.5-tonne fuel cell delivery trucks – on the road in Shanghai. We engineered and manufactured the fuel cell systems and worked on further development of the vehicle prototype, including FC system integration. Our partner at the time, Dongfeng, which is a major Chinese OEM, then built the 500 trucks. This was a really challenging undertaking, and we learned a lot from it – from hydrogen production to the question of who would do vehicle maintenance work. We managed to find operators that would use these vehicles and market them to end-user companies. When we mobilized drivers, we were also the ones who then organized the after-sales service of those vehicles, not the OEMs or the operators. After that, we redoubled our efforts and, among other things, we installed an H2 station of our own with partners so that our drivers would have a place to refuel.
In other words, a completely new approach to bringing such technology into the hands of customers.
Yes, we had to take a different path. We had to find ways to make it viable because a traditional approach wouldn’t have worked here.
Why are you here today?
We brought a fuel cell system with us today that came straight off the production line. This is not a prototype. We will have covered over a million kilometers with this system by the end of the year. It has a power output of 117 kW and has already been integrated into several hundred heavy-duty vehicles. We are working together with a variety of partner companies – domestically and internationally, including in Germany, to integrate these systems into vehicle powertrains.
So you’re a classic system integrator.
Yes, we integrate fuel cell technology in various applications. The Refire Group has three subsidiaries that develop FC technologies and manufacture products. One of the business units, Unilia, produces FC stacks. Another, Pando, makes FC power electronics products, and Refire Technology builds complete FC systems. These three subsidiaries operate independently but under a common umbrella.
So you produce your own fuel cell stack but also use stacks from other producers for your systems, like Ballard for example?
That is correct. In the production of complete FC systems, our own stacks or those from other manufacturers may be used. For example, in one project Toyota is our stack partner. Similarly, there are also German, Canadian and Chinese stack suppliers that we have worked with.
I see. What applications do you address with Refire Technology?
We focus on a variety of applications for commercial vehicles and stationary power. We don’t just supply the fuel cell systems and core components, but also offer application engineering services. Sometimes we’ll also do turnkey solutions in order to help customers decarbonize specific and unique end use case applications.
Is that what you do for Clean Logistics?
Clean Logistics has a very capable engineering team which already has experience from past work in the conversion of diesel powertrains to battery-electric, and they’re now adding fuel cell solutions to their product lineup. The complete engineering solution that we typically provide OEMs is to integrate a fuel cell powertrain based on their own existing chassis. We look at which fuel cell system is optimal for a given application, and then we assemble the various vehicle components in order to return a fully finished fuel cell vehicle prototype to the OEM.
How many systems have you already delivered?
We have shipped in total about 4,500 fuel cell systems for commercial vehicle integration. Vehicles powered by Refire FC systems have now converted at least 3,500 tonnes of hydrogen into electricity for zero curbside emission driving. Altogether, the fuel cell commercial vehicle fleets have clocked more than 125 million kilometers, a mileage that rises about 1 million kilometers every week. As I mentioned earlier, our aim has always been to commercialize fuel cell technology, and so bringing products to market and into the hands of actual drivers is very important. We work collaboratively to enable OEMs to homologate their prototypes so that at-scale vehicle production can be achieved when fleet operators place their orders.
You’re based in Shanghai, and are also active in Germany and North America. Where is your global focus?
That’s right – Refire’s corporate headquarters is in Shanghai. We currently have two engineering centers – one in Shanghai, and another in Vancouver. A third engineering center is in the works in Germany which will service our European customers.
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