The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
In their latest podcast video, starting at 22 minutes and 25 seconds, you'll discover everything about CHRONOS. To summarise, it's a 'game-changing' next-generation, high-capacity performance stack platform set to be unveiled in 2024.
https://www.youtube.com/watch?v=1pMMK2VuhUg&t=1347s&ab_channel=InvestorMeetCompany
In simpler terms, ITM Power could potentially turn a profit now if they scaled back on their investments in expansion and innovation. However, that would mean sacrificing their long-term growth and market potential. By choosing to invest heavily in R&D and product development, even at the expense of short-term profitability, ITM Power is positioning itself for significant growth and success in the future...
Increasing losses are due to heavy investment in expansion and innovation, ie the latest plug and play, and the forthcoming game-changing stack called Chronos. While revenue is on the rise, the company is spending more on research, development, and scaling up production, leading to larger losses. This investment phase is akin to what pioneering companies like Tesla experienced in their early days, where significant spending on growth and technology development temporarily outweighed revenue. In essence, ITM Power's current losses reflect a strategic choice to prioritise long-term growth and market leadership over short-term profitability. @dairentaylor
Are you assuming that Plug Power, FuelCell Energy, and Nel ASA aren't selling because their stock prices aren't moving? That's nonsense. The reasons stock prices aren't budging are broader: high bank interest rates, the war in Russia, and the aftermath of the last rapid rise. Growth stocks like ITM Power are naturally impacted by these factors. Once bank interest rates drop, we could see a re-rate back towards £1. It's frustrating, but the current market conditions don't reflect ITM's underlying business activities and strategic deals.
Have you been keeping up to date? ITM Power has been signing deals, such as the recent partnership with Hygen and a notable sale in Japan. They are also working on a Front-End Engineering Design (FEED) for a multi-100 MW project. Can you list other PEM electrolyser companies and their sales compared to ITM? It's not accurate to say ITM isn't selling. I agree the stock price isn't budging, but ITM is positioning itself well with these deals. Many companies are planning for rapid growth between 2025-2027, supported by government subsidies.
Did you read the article or just the headline. Linde have simply said the use of PEM's to create hydrogen won't be profitable for another 5-7 years. Why do you think government's are piling money in as subsidies. I think you are forgetting ITM aren't creating hydrogen, we are manufacturing PEMs which is certainly profitable here and now. I think the markets view is ITM will be profitable within the next 1.5-2 years, followed by yearly rapid expansion.
Despite the ongoing conflict in Ukraine, it's encouraging to witness the UK actively engaging in EU projects. With potential announcements of FIDs from ITM in the coming months, doubling the share price within a week isn't out of the question in my opinion. Exciting times ahead!
Financial Stability:
ITM: Boasts over £200 million in the bank, providing stability and room for growth.
AFC: Facing cashflow challenges, with reserves dwindling and a pending crisis.
Strategic Partnerships:
ITM: Secured partnerships with industry giants like Shell, RWE, and others, indicating strong market positioning.
AFC: Limited partnerships, with deals like Speedy Hire offering significantly lower returns.
Market Presence:
ITM: Operating out of substantial warehouse facilities, positioned for scalability and expansion.
AFC: Still operating out of smaller-scale facilities, lacking the infrastructure for significant growth.
Industry Impact:
ITM: A key player in the hydrogen industry, with potential to drive sector growth and innovation.
AFC: Relies on advancements in the hydrogen sector for its own success, making ITM's progress crucial.
Just a heads up: ITM is a leader in electrolysers, while AFC is still finding its footing in the fuel cell sector. While ITM did burn through 40 million, they have over 200 million in the bank, ensuring stability until projected profitability in 2027. On the flip side, AFC looks set to run out of cash by year-end, likely leading to a raise at current levels. It might be wise to consider removing your cash until the raise is complete. Best of luck to all involved.
RWE secured a Dutch grant yesterday for a 50MW electrolyser, costing approximately 124 million euros. They plan to reach a Final Investment Decision (FID) before the end of this year, aiming for full operation by 2027. Dennis celebrated this announcement on his LinkedIn, RNS update soon? The momentum is undeniably building.
Dennis did mention an upcoming product announcement, so there's certainly some anticipation building. Let's hope it's the game-changing innovation we've been waiting for, but even if it's the larger plug-and-play Neptune series, that would still be a significant development.
RWE secured a Dutch grant yesterday for a 50MW electrolyser, costing approximately 124 million euros. They plan to reach a Final Investment Decision (FID) before the end of this year, aiming for full operation by 2027. Dennis celebrated this announcement on his LinkedIn, RNS update soon? The momentum is undeniably building.
Dennis's assurance that the Hygen deal won't impact their capacity for other partners hints at imminent signings. With ITM set to announce a game-changing product this year, the impending Uniper deal gains significance. This product could potentially double the current factory capacity without expansion perhaps? Dennis's calm demeanour reflects confidence in managing the increasing workload effectively..
Keep an eye on Schulz's comments on linkdln, he engages with companies ITM seems to have relationships with well before official announcements or contract signings. Hygen was a prime example.
I've found hes made comments to employees of Uniper, hinting at future deals with ITM. UNIPER's substantial investment of 8 billion euros in green over the next 6 years, along with their partnership with Plug Power for a 100 MW project, presents a promising opportunity for ITM to secure a significant deal for UNIPER's gigawatt-scale plant expansion in their phase 2 plans, which is scheduled for 2025-27.
Unipers green hydrogen order plan: https://www.uniper.energy/about-uniper/business-structure/hydrogen
Partnerships are great, the proof will always be in the pudding (or in this case, the hydrogen). It’s one thing to host meetings and showcase potential; it’s another to deliver tangible results that impact the bottom line. So while I applaud the progress, I’m keenly awaiting the follow-through. Let’s hope AFC’s journey from ‘infancy to maturity’ translates into real growth and not just well-aged presentations. Cheers to seeing more green power and less greenwashing!
The estimated share price range of £2.00 to £3.00 is based on the significant boost this deal gives to ITM Power's annual revenues, almost doubling previous figures and greatly improving the company's financial outlook. This large, confirmed deal will likely elevate the market's view of ITM Power, showcasing its capability to handle major projects and signaling robust growth prospects. This new revenue stream not only enhances the company’s appeal to investors seeking growth in the renewable energy sector but also supports a higher valuation, potentially allowing the share price to double or even triple from its current level in the next 6 months.
So it will be interesting to hear more about this deal (dates/price - FID) but say revenue is projected at approximately £200 million spread evenly from 2024 to 2027, and assuming all other factors remain constant, the share price could potentially rise significantly. Based on the increase in annual revenue, a reasonable estimate might see the share price reaching upwards of £2.00 to £3.00, reflecting the company's expanded financial base and growth prospects.
Over the next 2-4 years, we're looking at significant growth with projects including 100+ MW for Shell, 200 MW for Hygen, and 200+ MW for RWE, alongside solo sales of Plug and Plays—things are certainly getting exciting
Estimated Revenue for ITM-Hygen Hydrogen Projects: £20M to £40M for Phase 1, Potentially Higher Due to Additional Costs of Plug and Play Electrolysers; £60M to £120M for Phase 2
Phase 1 (50 MW or 50,000 kW):
Lower estimate: $25 million ÷ 1.25 = £20 million
Higher estimate: $50 million ÷ 1.25 = £40 million
Phase 2 (150 MW or 150,000 kW):
Lower estimate: $75 million ÷ 1.25 = £60 million
Higher estimate: $150 million ÷ 1.25 = £120 million