Hydrogen Short-List

The post “McPhy Equips High Profile Renewable Hydrogen Project” on September 10, 2021, may not have impressed all investors.  As a foreign operator and quoted in the U.S. only on the Over-the-Counter platform, McPhy does take a little extra work and may involve higher transaction fees.  Fortunately, for the investors there are alternatives to grab some of the hydrogen fuel action. 

There are more hydrogen technology developers.  Several are listed in the U.S. and thus are fully reporting companies with plenty of information in English and the well-understood reporting format mandated by U.S. regulators.

A cruise through the tables below reveals a disappointing reality about hydrogen.  None of the developers have been able to make a profit on hydrogen.  Granted Linde Plc (LIN:  NYSE) does report strong cash flow generation, but this success sits on a well-established business model selling industrial gases.  While Linde does not report its hydrogen-related results separately, most likely any profits from hydrogen sales are for conventional industrial uses and not for its transportation fuel projects.

Despite being tantalizingly available everywhere, hydrogen is a slippery element to capture and craft into a usable form.  Conventional reforming methods rely on natural gas feedstock, which really does not make the end result much more environmentally friendly.  Considerable work has gone into perfecting biogas as a feedstock, but others have worked on making electrolysis of water a more affordable alternative.   To keep hydrogen under control for transportation, it must be stored in high-pressure vessels.  The sensitive containers can be hazardous to handlers if hydrogen gas escapes or combusts.

It appears hydrogen fuel developers have come up with fixes for the most vexing characteristics of hydrogen.  That has helped win over customers and gain a foothold in the market.  The next step is to gain scale and create efficiencies in production, distribution and customer acquisition.  Only then can investors expect to see the onset of profits. 

At this point the primary investment risk is in determining which developers can capture market share.  Investors have a choice of selecting a company that entering the hydrogen fuel market as an expansion of an existing successful business.  Linde or SFC Energy AG (F3G:  DE) are alternatives.  Besides McPhy as featured in the September 10^th post, the tables below provide the names and stock symbols of newcomers who are bringing new hydrogen technology to the market.

 

The next post features another newcomer that shows strong potential in capture market share and gaining the scale needed for profits.     

 

SELECTED HYDROGEN FUEL AND EQUIPMENT COMPANIES
Company	SYM	Operations	Market Cap*
AFC Energy Plc	AFC.LN	Alkaline fuel cell systems, water electrolyzers	$513.8 M
Bloom Energy	BE	Solid-oxide fuel cells, including hydrogen	$3.2 B
Ballard Power Systems	BLDP	Proton exchange membrane fuel cells	$4.7 B
Ceres Power Holdings	CWR.LN	Solid-oxide fuel cells, including hydrogen	$3.0 B
Doosan	336260.KS	Power generation fuel cells, including hydrogen	$2.8 B
Fuel Cell Energy	FCEL	Fuel cell power plant operation, hydrogen distribution	$2.2 B
ITM Power, Plc	ITM.LN	Hydrogen energy storage, distribution systems	$3.0 B
Linde Plc	LIN	Industrial gas supplies, including hydrogen	$154.8 B
Nel ASA	NEL.NO	Hydrogen production, storage, transport systems	$2.2 B
Plug Power	PLUG	Hydrogen fuel cell turn-key solutions	$14.5 B
SFC Energy AG	F3C.GR	Fuel cell power plant systems and components	$473.5 M
*Foreign currency values converted to US dollars as of 9/20/21

 

 

SYM	Price*	Market Cap*	Price/Bk Val	Price/Sales	Price/EPS	Price/CFO
AFC.LN	$71.00	$513.8 M	6.0	2.3	neg	neg
BE	$18.60	$3.2 B	na	3.6	neg	neg
BLDP	$14.50	$4.7 B	3.4	45.0	neg	neg
CWR.LN	$1,550.00	$3.0 B	18.3	97.9	neg	neg
336260.KS	$42.50	$2.8 B	6.5	5.7	643.8	neg
FCEL	$6.25	$2.2 B	3.6	27.7	neg	neg
ITM.LN	$535.00	$3.0 B	10.9	465.9	neg	neg
LIN	$310.00	$154.8 B	3.5	5.6	49.7	19.4
NEL.NO	$1.50	$2.2 B	3.2	29.8	neg	neg
PLUG	$25.25	$14.5 B	3.2	na	neg	neg
F3C.GR	$32.50	$473.5 M	8.2	7.1	neg	463.8
*Foreign currency values converted to US dollars as of 9/20/21

 

 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.