06.06.2023, Author: Stefan Feulner

Stock news: First Hydrogen - Fully on track — Forecasts clearly exceeded

  • Transport
  • Hydrogen
  • climate neutrality
  • Fuel Cells

Things continue to go like clockwork at hydrogen innovator First Hydrogen. The Vancouver and London-based company reported better-than-expected test results for its hydrogen fuel cell-powered light-duty vehicles under real-world road conditions. The range of 500 km was exceeded. The Company is also making rapid progress in establishing a complete value chain with the production and distribution of green hydrogen. Despite its excellent business performance, the stock of First Hydrogen has experienced a decline in line with the overall industry trend, which may present an attractive entry opportunity from a long-term perspective.

Time to read: 5 minutes

Efficiency inspires

After the first test drives under real road conditions, Rivus, a British fleet management provider with around 500 customers under contract and responsible for managing over 120,000 light commercial vehicles (LCVs) and trucks annually, praised the "smooth running and pleasant handling". As part of the British "Aggregated Hydrogen Freight Consortium" AHFC, the latter was the first partner to test the 1st generation prototypes equipped with a "best-of strategy". So far, 6,000 km have been covered in urban and extra-urban areas and on highways. In the process, vehicles have achieved ranges of over 500 km. The fuel consumption of First Hydrogen's LCV is below 2 kg/100 km in many driving scenarios and even below 1.5 kg/100 km in urban traffic.

The light commercial vehicle prototype convinced partner Rivus during the first test drives under real-world conditions. Source: First Hydrogen Corp.

LCV ahead of BEV

So far, it is not yet clear which technology will prevail in the climate-neutral transportation sector in the future. However, the first tests of hydrogen-powered "Light Commercial Vehicles" show a clear picture. For example, Rivus' test drivers were able to clearly analyze that the company's LCVs achieve longer ranges and can be refueled much faster than battery electric vehicles, which will help fleets using this class of vehicles achieve zero emissions goals. Another plus for First Hydrogen's NEVs, according to Rivus, was the automatic transmission, which is "easier to operate than in gasoline or diesel vans" because no gear changes are required, and the vehicle runs much more quietly.

Testing lasts a total of 4 weeks, with the prototype going through various operating cycles at Rivus. During these, the van drives through planned routes, in different terrain and at different speeds, in an unloaded state, with different payloads, and with and without the use of heating, air conditioning and other additional functions. Here, the partner uses First Hydrogen's onboard telematics to make direct performance comparisons between similar battery electric vehicles and internal combustion engine vans that have gone through the same operating cycles based on the volumes of data collected.

A total of 16 major fleet operators from industries such as food, delivery, utilities and healthcare are testing First Hydrogen's innovative light-duty vehicles and are expected to be potential customers if results remain outstanding.

First Hydrogen Automotive CEO Steve Gill was also optimistic: "We are excited about the initial road tests, as they have shown that the vehicle meets performance requirements and exceeds our initial expectations for real-world driving. The low fuel consumption means our vehicle can achieve a significantly longer range on a single fuel tank. This means time savings for drivers through fewer refueling stops and lowers overall operating costs, making our LCVs more attractive to fleet operators and potential customers."

Value chain in view

In addition to its ambitious goal of becoming the leading designer and manufacturer of zero-emission, long-range hydrogen-powered vehicles in the UK, EU and North America, the young company is going one step further and plans to cover the entire value chain in the hydrogen sector. A partnership was established last year with German company FEV Consulting GmbH, which is developing a prototype for a customized refueling system for the hydrogen mobility market. In addition, the production and distribution of green hydrogen is to be launched in Europe, in addition to the UK and North America, in order to be able to offer its customers an all-round carefree package with the "Hydrogen-as-a-Service" model.

In the City of Shawinigan, Quebec, First Hydrogen has reached an agreement for the purchase of two properties ideally suited for the development of a green hydrogen ecosystem. The developed plan calls for Canadians to produce up to 35 MW of green hydrogen per year using advanced electrolysis technology. It will be distributed within the Montreal-Quebec City corridor for use with First Hydrogen's light-duty vehicles and to support other hydrogen-powered vehicles. In addition, the Company is planning a production facility of the hydrogen-fueled commercial vehicles designed for annual production of 25,000 units. The feasibility study is expected to be completed in mid-2024.

Correction over?

In the wake of the general market correction in the hydrogen sector, First Hydrogen's stock was unable to escape despite the Company's strong performance, falling around 55% from its low since the beginning of the year. The share price thus fell below the prominent support zone, the high from 2021, at CAD 2.41. However, the share price was able to regain this support zone. With high volume, it went up to around CAD 3.10. Since then, the paper has oscillated in a narrow channel between CAD 2.67 and CAD 3.10. A breakout above this level would release short-term upside potential to at least the CAD 3.50 range. The share is receiving tailwind from the indicators. Thus, the trend-following indicator MACD generated a fresh buy signal. The relative strength indicator RSI also turned upward and is now in neutral territory.

After a strong correction since the beginning of the year, the First Hydrogen share was able to defend important support levels. Source: Refinitiv Eikon, as of 06/05/2023

Interim conclusion

Despite the consistently positive development steps taken by First Hydrogen in recent weeks, the Company's stock lost significant ground in the wake of the general market correction in the hydrogen sector. The initial results of test runs under the "Aggregated Hydrogen Freight Consortium" turned out better than even the Company expected. In addition, the advantages of hydrogen-powered light-duty vehicles over battery-electric vehicles were clearly identified. If the tests with the other 15 major fleet operators progress positively, they should be considered potential customers in the future.

With the acquisition of two properties in Quebec, First Hydrogen also took a decisive step toward establishing a complete value chain. With a market capitalization of CAD 138.78 million, the Canadians are still moderately valued compared to peer group companies in terms of future prospects. First Hydrogen will present at the virtual IIF 1st Hydrogen Day on June 15, 2023.

The update is based on the initial report 07/2022

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