Successful HydrogenPro (HYPRO-ME) IPO
Stock Analysis
We continue our hydrogen research project with HydrogenPro, another Norwegian electrolysis company which was taken public in October 2020.
HydrogenPro’s business model looks very promising. The company, which was founded in 2013, offers modular and scalable electrolyzer systems for the production of renewable green hydrogen. HYPRO-ME focuses strongly on industrial applications. Therefore, HydrogenPro is able to cover all capacity requirements with basically one single concept. This standardized approach has the potential to give the company significant cost advantages against competitors, who do not follow the same strategy.
The company went public on October 14th, 2020 and during the first month of trading, the stock price has risen by 14%. The young organization already achieves a market cap of 210 MUSD, which is remarkable in relation to the annual revenue of 2,78 MUSD in 2019. High valuations tend to be common in the high-risk-small cap segment. HYPRO-ME at this stage is surely nothing more than a bet, as are so many other publicly quoted hydrogen companies. But unlike other hydrogen stocks, HYPRO-ME is backed by some important investors.
Industrial giant MITSUBISHI HEAVY INDUSTRIES (MHVYF), for instance, is among the investors, who believe in the company’s business model. Other investors include the nordic investment companies Klaveness Marine, DNB Asset Management, and Sissener AS. The latter was awarded the global UCITS Hedge awards in 2018 & 2020 for its Sissener Canopus fund, which is awarded annually by the Hedge Fund Journal. Further notable is also the investment of the Austrian ERSTE GROUP (EBS.VI).
Doesn’t it really sound promising so far? The bad news is, that the business Model of HydrogenPro is not new. Industrial giants THYSSENKRUPP (TKA) & SIEMENS (SIE) offer similar modular solutions. HydrogenPro claims to achieve a higher system efficiency compared to its large industrial competitors. The new process is developed in a joint R&D project with Elplatek and the Danish Technological Institute. Furthermore, the company claims to be able to offer “electrolyzer plants with twice the capacity of traditional electrolyzers’’. According to our research, key personnel of the engineering team gained valuable experience at NEL (NEL.OL) a few years back, which in our view boosts the credibility of HYPRO-ME’s USP.
HydrogenPro recently teamed up with the french startup H2V, which aims to become a leader in the production of Green Hydrogen in France. 5x100 MW alkaline electrolyzer plants are planned to be constructed in the city of Dunkirk. Once the order for the first 100 MW unit is confirmed, HydrogenPro considers establishing a local manufacturing plant as well as the EU headquarters in France.
The future development of HYPRO-ME will be interesting to follow. Especially in Northern Europe, a lot of cleantech companies have filed for IPOs recently. It seems more than likely, that the nordic countries will become the main European cleantech hub. Innovative entrepreneurs are strongly backed by the public sector and seem to have good access to funding in order to fuel their growth.
As already seen during the rise of wind & solar, the cost degression of technology is the critical determining factor for global adoption. The UK announced its 10 point plan for a green industrial revolution this week and was following the footsteps of many other countries who have clearly committed to transforming their industries. The public and private backing for H2 is undoubtedly given, but HydrogenPro remains a risky bet among the publicly traded H2 technology companies.
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