Hydrogen as a billion dollar market
Stock market development of hydrogen stocks weak in 2021
JPMorgan bullish for the long term
The prospect of a growth market has also drawn the attention of many investors to plants in the hydrogen segment. Investors are not only looking for returns, which they no longer find in many investments in classic forms of energy. The climate protection aspect is now also an important point for many investors, on the basis of which they make their investment decisions.
2021: Business is great – stocks are a flop
For the experts at the US investment bank JPMorgan, these are reasons to be confident about hydrogen plants. “The targeted policy momentum has not slowed,” the bank said in a note to Capital.com, with the policy framework “slowly but surely creating the conditions for the emergence of a low-carbon hydrogen market,” the analysts said, looking at the Efforts in many countries to advance hydrogen initiatives.
Despite this, stocks such as Plug Power and the Norwegian group NEL ASA lost a lot of ground on the stock exchange last year. Experts also attribute this to the above-average development in 2020; a year later, the hydrogen high-flyers on the stock market are down to earth again. The leap of faith that hydrogen shares received from investors in 2020 has been used up, and it is now also clear that the progress of the industry depends on subsidies and technological advances. Successful scaling is also elementary in order to advance the business of the company.
Regardless of the weak stock market development, many industry representatives recorded quite presentable growth in 2021. NEL increased its revenues significantly from NOK 148 million to NOK 229.3 million in the third quarter, and the order book increased over the period. How important subsidies are, however, became apparent when looking at the development of profits: the operating loss rose from NOK 42.1 to 113 million.
A similar picture emerged at Plug Power. The company extended its third-quarter loss to $106.67 million from $65.2 million, while revenue jumped to $143.9 million from $107 million.
JPMorgan Confident Long-Term
However, the sometimes enormous growth of companies in the hydrogen sector was not reflected on the stock market. From an investor perspective, investing in hydrogen in 2021 was not a good bet, as JPMorgan acknowledges in a note to investors: “The hydrogen hype of 2020 is clearly behind us. 2021 was a tough year for alternative energy, including H2-focused stocks. Although this is the While not completely negating the benefits of the 2020 rally, several stocks in the market have significantly underperformed.”
Irrespective of this, the experts still consider shares from the segment to be attractive: “However, we remain of the opinion that hydrogen remains a long-term investment opportunity,” said JPMorgan in its announcement.
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