You can feel it – the wave of optimism sweeping through the hydrogen and fuel cell industry. All the more disappointing that the German government is taking its own sweet time setting up market regulations. It is a murky green light. Sure, there have been plenty of speeches. Yet, there is a decided lack of enthusiastic momentum. Even then, as the national hydrogen strategy was announced in early June.
Projected first-quarter returns were between USD 140 million and USD 160 million. In the end, Bloom Energy took in USD 156.7 million. However, if I interpret the numbers right, another USD 40 million was shifted to the second quarter. From projects that have not been billed yet, I do believe. The company’s bottom line posts a USD 9.8 million loss, according to GAAP, far less than the predicted USD 15 million to USD 25 million.
FuelCell Energy recently announced that, since launching business, it had produced over 10 million megawatts of clean electricity, saving over 1.5 million tons of carbon dioxide. Its basis for success is the SureSource platform. The company is now gradually fulfilling orders worth more than USD 1.3 billion. New bookings season the pot, as they are expected to lead to high margins.
Long anticipated, Nikola Motors [Nasdaq: NKLA] finally goes public. In order to get a foot in the door early, the truck maker used a reverse merger. Investors acquired a public shell company, a special type of investment vehicle.
An unexpectedly profitable three months propelled Tesla’s stock to over USD 850 before it plunged to USD 670 when the electric carmaker’s chief executive, Elon Musk, sent out a tweet complaining about the high price. Not much later, though, the stock rallied again, racing toward USD 1,000 after sister company SpaceX, which is also headed by Musk, announced it successfully sent one of its rockets into orbit.
Ballard [Nasdaq: BLDP] and Weichai, Ballard partner and major shareholder, announced they are building an LCS factory in China. Past tense, it has probably already been built. Production should begin this year.
In my view, Plug Power [Nasdaq: PLUG] is definitely on the right track: Building and expanding liquid hydrogen production facilities while planning to acquire United Hydrogen. The latter’s 6.5-ton annual capacity should be raised to 10 tons, thus meeting 25 percent of Plug’s in-house demand, meaning eventually the profit margin can come from consumables. Plug is also negotiating with an electrolyzer manufacturer that could or should be absorbed. That all looks very good to me. In a few years’ time, Plug intends to cover more than 50 percent of its own production with green hydrogen.
Cashing in around the USD 5 mark, as I recommended, may have been a bit premature, seeing that the price rose as high as USD 6, but was ultimately a prudent move. At present, Plug Power’s stock again trades around USD 3. You may wonder what happened in the meantime. Simply put, expectations were too high. The net loss per share amounted to USD 0.06 in the fourth quarter of 2019. Revenue rose to USD 91.7 million, compared to USD 59.8 million generated in the prior-year quarter, which means there is some good news.
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.
How quickly things can change. Just a few months ago, FuelCell Energy [Nasdaq: FCEL] risked bankruptcy due to questionable financial practices. With the help of a highly committed and successful consulting firm, the business then righted the ship. At one point, its price soared from around USD 0.13 to an intraday high of over USD 4.00 as it saw its market cap jump from USD 40 million to USD 500 million. The latest stock crash then put an end to it all and the stock took a nosedive, finishing below USD 1.00. It will certainly take some time before the price averages out to reflect business growth.