The Lemon Fool

Time for Hydrogen. (ITM, CWR, AFC, TPG, PRES, PHE, GTC)

Hi everyone. I stepped outside of my comfort zone and write a web page summarising the stocks with hydrogen angles that I could find. A snippet of each pasted below and my full web page on my wordpress.

https://miningbug.wordpress.com/2021/01 ... -26-01-21/

As with any hot sector it is worth investigating but please be mindful that these stocks can move up and down very quickly. I have refrained from making any specific picks for this reason but show a bunch of the companies making progress.

Today I am looking at the UK’s ‘hydrogen heroes’. It will come as no surprise that Hydrogen is a hot topic. Green, clean, renewable fuels are the future and covid-19 has taken us years forwards in the clean energy debate. That means the market opportunity has already been dragged forward and hydrogen companies with existing positions have suddenly become critical and sought after businesses. Here I summarise the UK market’s own stocks with a hydrogen angle.

Why hydrogen? Why now?

Clean energy. Back in 2003, President George W Bush called it the freedom fuel. Hydrogen has been a long time coming and now looks like a powerful weapon in the fight against climate change.

As summarised by Fatih Birol from the International Energy Agency “To reach 2050 net-zero goals, hydrogen needs to increase sevenfold from today. That would give hydrogen a 10%-15% share of total energy consumption.” Elisabeth Brinton, the executive VP or Shell New Energies says, “Turning hydrogen into a new global commodity will involve a total system transformation, Shell New Energies executive VP Elisabeth Brinton said.”

Activity is rife with deals and partnerships being struck regularly. Complex and isolated projects like heavy freight, buses and remote power generation will be areas where Hydrogen can excel, and I would argue more so than areas like cars where there is battery competition. Hundreds of billions of dollars are being poured into green energy projects including hydrogen by governments worldwide, which is now an enviable backdrop for players in this industry. Economies need to recover from the pandemic and governments are keen for a green recovery.

Valuations are much higher now for these hydrogen names than a couple of years ago. That introduces risk because the valuations are not backed up by profits. However, if I cared only about profits, you would never own a miner that was before production, and you’d never own a technology company that was investing heavily for growth. My motto to myself is that I don’t chase high prices, but I don’t discard them either. This is not a summary to invest right now in any of these names. I am canvassing over the options.

So here, goes. Here are some companies that could transformatively benefit. Some are well known, others are flying under the radar.

ITM power. 717p share price, £3,950m market valuation
Ceres Power. 1,588p share price, £2,735m market valuation
AFC Energy. 67.8p share price, £458m market valuation
TPgroup 6.6p share price, £52m market cap
Pressure Technologies. 98p share price, £30m market valuation
Powerhouse Energy. 8.7p share price. £340m market valuation
Getech. 25p share price. £9m market valuation

Do your own work on the name please, don't take everything I have written at face value

MiningBug

Sorry, but you do some good work on other resource aspects. However, the laws of physics make this generally an ill advised investment area. Some companies make it work with a good bit of public money to lubricate it.

We are I suppose going into silly money territory in the USA this might be ideal for a SPAC.

Miningbug wrote:Time for Hydrogen. (ITM, CWR, AFC, TPG, PRES, PHE, GTC)
MiningBug

Have a look over to the Hydrogen Matters board https://www.lemonfool.co.uk/viewtopic.php?f=16&t=24190
I think you will find that not everyone shares your enthusiasm for hydrogen

csearle wrote:

Miningbug wrote:Time for Hydrogen. (ITM, CWR, AFC, TPG, PRES, PHE, GTC)

Moderator Message:
We have a site rule that does not allow promotion of third-party sites (especially one's own I might add).

Posting of links to 3rd party sites is acceptable where it is entirely relevant to the discussion. However, any links promoting a 3rd party site are not allowed

So as I think this is your first such link it may not have been deliberate promotion. Please let this be the last link to your own site here. Thanks - Chris

Got it. Will leave links off next time and post the full content

scotia wrote:

Miningbug wrote:Time for Hydrogen. (ITM, CWR, AFC, TPG, PRES, PHE, GTC)
MiningBug

Have a look over to the Hydrogen Matters board https://www.lemonfool.co.uk/viewtopic.php?f=16&t=24190
I think you will find that not everyone shares your enthusiasm for hydrogen

I think you and John raise valid points, and I am especially keen to point out that there is a lot of hype in some of the big names, which I why I rather stood on the sidelines rather than was overly positive on any of them. Some of the smaller picks and shovels names I actually quite like more than the names that still need to demonstrate profits and cash flows in the future.

Wishing you a relaxing weekend

MiningBug

I bought ITM years ago when I found out that Peter Hargreaves had put in millions. Kept a while sold at a modest profit obviously a big mistake.
I could see the potential, but the management kept spending all the money on research, so there was little turnover or profit.

Now this is the reason that Hydrogen is going to be very big. It is the only energy product that can use the existing pipe grid. It will probably start off with a natural gas/Hydrogen mix and may be end up just Hydrogen. The beauty is that the gas can be switch on again. The boiler makers have conversion kits and after about 2026 all boilers will be duel fuel. Just some information I picked up on my energy journey.

taken2often wrote:I bought ITM years ago when I found out that Peter Hargreaves had put in millions. Kept a while sold at a modest profit obviously a big mistake.
I could see the potential, but the management kept spending all the money on research, so there was little turnover or profit.

Now this is the reason that Hydrogen is going to be very big. It is the only energy product that can use the existing pipe grid. It will probably start off with a natural gas/Hydrogen mix and may be end up just Hydrogen. The beauty is that the gas can be switch on again. The boiler makers have conversion kits and after about 2026 all boilers will be duel fuel. Just some information I picked up on my energy journey.

I ran with CWR (Ceres) from autumn 2020 to january 2021. Made a big profit.

But I've had a rethink re. hydrogen. I don't think fuel cells (in vehicles, which was CWRs thing) will ever be viable long term. Too dangerous.

But do see H2 as being a potential fuel for shipping. Lots of wind farms are near the coast. Can envisage electrolysis plants nearby with little need to transport volatile H2 any distance. But could be used to refill ship fuel tanks, possibly.

So I have recently added a small position in ITM.

Since this thread was started a new fund has come into being, launched by former Shell and Exxon executives - HydrogenOne Capital Growth (HGEN). Early investors have done alright so far, it's currently trading on a 21% premium. I'm considering a small punt. Anyone else looked at this?

Fluke wrote:Since this thread was started a new fund has come into being, launched by former Shell and Exxon executives - HydrogenOne Capital Growth (HGEN). Early investors have done alright so far, it's currently trading on a 21% premium. I'm considering a small punt. Anyone else looked at this?

Nope, not at any premium. I am not buying, but if I were interested in hydrogen shares it would be one of the dominant industrial gases groups who are world leaders in hydrogen generation and marketing.

I bought 15,000 shares HydrogenOne. Before the open at £1.00. Since then the number of stories about Hydrogen production keep rolling in from all over the world. Not to keen on buying one producer, rather have an IT. Although there is some legitimate concerns about Hydrogen you need to look at the big picture.

It can be mixed with gas. This can be piped all round the country. Used as a liquid and injected into engines, great for the big equipment that has to run 24/7. Can be used in a fuel cell to create electricity.So no refuel delays. No battery disposal problems. No need for the impossible road side charging. Can soak up any renewable energy excess.

Another great idea is ROOF. Managed to get some of this on day one, but had to pay a premium to fill my needs.

Bob

taken2often wrote:this is the reason that Hydrogen is going to be very big. It is the only energy product that can use the existing pipe grid. It will probably start off with a natural gas/Hydrogen mix and may be end up just Hydrogen. The beauty is that the gas can be switch on again. The boiler makers have conversion kits and after about 2026 all boilers will be duel fuel.

I think you're probably looking in the wrong place, it looks like heating is going to be a relatively minor use for hydrogen for at least the next decade. If you look at the UK Hydrogen Strategy (link in the main hydrogen thread here), there's not going to be a decision on whether to blend some into mains gas until 2023 and the decision to go 100% in 2026, but it won't actually happen for years after that. And I'm not sure there's going to be much hydrogen available for heating, given that there's other places like the chemical industry where most of the available hydrogen is likely to end up as they don't have alternatives, see eg Michael Liebreich's hydrogen ladder :

You are right but the mixing of Hydrogen and Gas is just a Sop to the Greens of this world. They believe any old crap handed out if it fits their narrative. We need to be punished for our consumption. The World is coming to an end Soon.

Anyway I wont be alive to see their world. In fact it could make dying a quite attractive alternative. Well at least I will then be doing my bit for the enviroment. One last burst of gas and my consumption will end.

Bob

taken2often wrote:One last burst of gas and my consumption will end.

Bob

Cut back on the lentils