Member Info for toneman

Jefferies intiates coverage of multiple companies in the hydrogen sector, with "buy" recommendations on ITM , Nel and Powercell , and "hold" on McPhy and Ceres

** It says existing industrial applications of hydrogen already provide a sizeable market, but further capital raises may be necessary

** It prefers "established players with partnerships" and companies working with polymer electrolyte membrane electrolysis technology (PEM)

** The broker estimates that hydrogen companies should generate positive EBITA only from 2025, with 2030 "a real inflection" point

** "Until renewable generation is plentiful, material developments in heating and transport are less likely", it says

Well Fortescue isn't hanging about. They announced another one of their massive opportunities at COP26, this time with Argentina.

https://www.reuters.com/business/sustainable-business/argentina-fortescue-unveil-84-bln-green-hydrogen-investment-plan-2021-11-01/

I remember one of Cooley's answers during a previous results day presentation was that you can't simply make hydrogen and sell it, you "must have a customer". It seems like Andrew Forrest disagrees and is going for the "build it and they will come" approach.

I agree. As long as ITM can get their hands on a fair share of the future demand, it's massively undervalued. A great deal of patience and good fortune required though.

Alpha-dog, I've posted the link before further down but you'll find that Plug Power has recently signed a big partnership with Fortescue so I don't think that one will be coming our way.

It's hard to argue against the point. Jo Bamford is working hard to get the transport infrastructure to work. With Ryse he's recognised that someone has to start moving hydrogen around. And stepping in to save and keep building hydrogen buses could turn out to be a stroke of genius. Shell with ITM could have stepped up more, but currently I don't think Shell has quite recognised the significance and importance. In the end you have to choose which market you're in. Bamford is clearly in transport and transportation. ITM is clearly in solutions for the industrial sector. I say good luck to Jo because the more acceptable that hydrogen becomes the bigger the whole market gets which ultimately benefits ITM.

Spot on tennents. That is exactly what Plug Power said at their symposium. They have a lot of fork lift customers and their biggest job is to absolutely guarantee them supply of hydrogen. Reliability is key to this becoming a success. And the more we hear about electric car charging not being reliable the more important reliable supply of hydrogen will be also.

I think it's worth repeating that simply buying an electrolyser does not make green hydrogen. The electricity to power it must come from renewables. The UK is decades away from having enough renewables to power our needs. Solar power is by far the cheapest renewable electricity, but is not best suited to the UK. It is very suited to Australia. So it makes perfect sense for that to be one of the first sources of green hydrogen as long as they can prove it can be transported economically. Transporting hydrogen is the primary business model for Ryse Hydrogen. Ryse is not the competitor for ITM here, instead it's Plug Power, and they seem to be very proactive in setting up partnerships. For the moment ITM seem happy with the partnerships they've set up. Our current model seems to be for companies to fill pipelines (Snam model) or build massive electrolysers for immediate on-site demand customers (Linde model). Time will tell whether they've chosen well.

They're going to use Plug Power electrolysers. It was in Plug's announcement and their symposium earlier this month.

https://www.ir.plugpower.com/Press-Releases/Press-Release-Details/2021/Plug-Power-to-Partner-with-Fortescue-Future-Industries-to-Manufacture-Electrolyzer-Technology-in-Australia/default.aspx

Cooley said in the AGM that they see significant orders coming, and far quicker than they had previously thought. That's the main reason for the sudden turn around in new factory timing.

They also said they have a lot of visitors booked in to Bessemer Park immediately following COP26... so presumably a bunch of international visitors.

During today's AGM there was a little further detail about the factory proposals. The next build was confirmed to be a 1.5GW UK-based factory to be in place during 2023. That increases UK production ability to 2.5GW. Then confirmation that the non-Uk factory will be 2.5GW to be in place in 2024, but still no confirmed country. What they said about country of choice is that it must be a country where Linde is incumbent. I haven't checked the global map to see if that restriction provides a guide. Any thoughts?

Wow. Have you seen Bloom Energy today. Up 33%. Extending their partnership with SK. It's not one of my stocks so I don't follow it closely enough to know what's really going on there.

If you consider theirs is 'guaranteed' then I'd have thought you'd be happy that yours is also 'guaranteed' having bought in at 26p. I feel like their investment is helping to build a solid foundation that supports my holding. Personally though I wouldn't consider it a guarantee that it won't fall back below 400p at some point.

jobunya, if you wait until the announcement is made you're already too late. That's always the way with stocks. That's why it's considered speculation and sometimes you're right and sometimes you're wrong.

I can understand why some people feel like they've missed out, but that presupposes that this share will a) stop being volatile and b) just rocket to 700p and not look back. Of course it could do one, both or neither of these. There are still a lot of nay-sayers and if COP26 doesn't deliver an obvious green hydrogen win you could easily see this share back under 400p. In that case, if it goes back under 400p you would have been equally annoyed to have been 'forced' to participate at 400p yesterday.

I am trusting the reality of the situation becomes apparent and that 5GW of factories is considerably bigger than a 1GW factory and should be generously reflected in the market cap in a few years. Perhaps there will be further dilution before then but I can't believe it will ever be enough to dilute the share value by 80% over that time.

If you're disappointed not to be included in the 400p fundraise, you should be also asking yourself why didn't you pick up more shares under 400p at the many opportunities over the past few months. ITM always said they would expand with more factories. Yesterday's announcement may have brought it forward by a few years, but really, what were you waiting for?

Bilbs, were you not a fan of Billy Connelly through the 70's and 80's?

Mervvv, perhaps you should clarify for Nova that the UT is actually both a buy AND a sell, rather than neither. Nova, the UT is an end-of-day auction process where the result achieves the highest quantity of shares exchanging hands, matching both sellers and buyers at exactly the same price. What is important is the price and the volume. In this case the price achieved was significantly higher than the close five minutes earlier. That means the auction was driven strongly by the buyers not the sellers. Effectively the market found enough sellers willing to release their shares at the inflated price to satisfy the demand for shares from the buyers. The £4m supports that the demand was very strong. It doesn't necessarily tell us anything about tomorrows trading, but for tonight at least the transaction was very positive. I hope that helps.

Amazing news. This decision has been brought forward anything from 2 to 5 years. Great confidence. Exactly what I was calling for a few months back when I accused ITM of not having the courage to stick their necks on the line. I don't see any reason to change my position that a fully loaded 1GW factory is worth £5Bn market cap. So this sets a clear target up to £25Bn market cap over the next decade.

I've been 'virtually' attending various parts of the Conservative Conference this week, mainly the fringe events on green stuff. I have a few observations to make. Firstly it seemed like nearly half of all fringe events linked themselves to something green - homes, hydrogen, the grid, etc. But on hydrogen specifically the government line does appear to be one of "let's get CCS going and then we can transition to green hydrogen when the costs have come down". Lord Callanan was one of the contributors with this viewpoint. Unfortunately he/they seem to have forgotten that to reach economies of scale you have to start buying even while the costs are high - no buying means no manufacture and no economies of scale. Perhaps they are banking on 'others' doing the early buying and then they can start much later, but they can't do that and have this country be leaders in it at the same time.

My final thought is that many businesses are holding off their purchasing decisions until after COP26 to see if their planned project will qualify for a hand-out. Once businesses can answer that, one way or the other, then I think we will see some orders in the hydrogen space.

Misterfluff, congratulations on taking a profit from your investment. Certainly worth keeping an eye open for a re-entry point. As part of your research I hope you already take the time to absorb the trading statements and results presentations. Having watched last week's interim results presentation I'm even more optimistic about CWR potential. If you haven't seen it you can watch it here...
https://www.youtube.com/watch?v=sWoQoNFwz1E

It seemed to me that Phil was bursting to tell us about their discussions with Weichai, but not allowed. So I'm hopeful that could be something significant and able to be announced within 6 months (maybe even COP26). Also the opportunity for shipping seems like it could be big for Ceres as their fuel cells can run on alternative fuels, not just hydrogen. That allows ships to start using the technology straight away and run on something like methane whilst the volume and infrastructure is put in place to switch seamlessly to ammonia.