Ballard Power Systems (NASDAQ: $BLDP) Is Advancing Proton Fuel Industry

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Ballard Power Systems (NASDAQ: $BLDP) gets back up from the COVID-19 problems and moves to expand its production and client portfolio across the US and China.

Ballard Power Systems (NASDAQ: $BLDP) is primarily focused on the design, development, manufacture, sale, and service of proton exchange membrane fuel cell products. The company was founded in 1979 in Canada, went public in 1993, and currently has 10 international subsidiaries. $BLDP offers a variety of products, such as:

    • heavy-duty modules,
    • hydrogen fuel cell stacks,
    • backup power systems,
    • portable power, and
    • material handling products.

Ballard Power is already powering busses, railroads, and shipping. Not only are they building these large fuel cells for the industry but also providing engineering and technology transfer services, securing recurring revenue.

They also sell their licensed intellectual property portfolio and their premium knowledge on the fuel cell application. They possess about 2000 patents or applications.

Ballard Power has successfully been able to supply fuel cells to vehicles that have traveled more than 30 million km and provided over 400MW of fuel cell products.

During their Q2 conference call, they announced a production backlog of $155.5 million. This backlog was down $13.9 million from the end of Q1. Orders delivered in Q2 were up $13.9 million and the remaining backlog should be delivered during the next twelve-month period.

The company has experienced top-line growth but seen a loss in their bottom line due to their increased expenses in research and product development.

The company’s stock was trading at $16.02 as of 12th November 2020 and had seen highs of $21.61 during July 2020 and saw its yearly low of $5.1 in October 2019. The company’s EPS over the last twelve months was -$.18.

EPS fell -11.76% over the same period, but revenue grew 29.88%.

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Geographical and political environments are propelling Ballard Power’s growth


EU and China have favorable environments for the hydrogen business. Germany plans to spend €9 billion on green hydrogen and 5 GW of electrolyzers by 2030. Electrolyzers use electricity to separate hydrogen and oxygen from water and provide a very pure form of hydrogen which can then be used in fuel cells.

In China, Ballard now powers 3,200 FCEVs (Fuel Cell Electric Vehicles). They have goals to expand this significantly including trucks by 2030.

Another development is the signature of an MoU (Memo of Understanding) between 15 US states which states that 30% of medium heavy-duty (MHD) trucks will be zero-emission by 2030 and all by 2050.

In California Ballard, Power already powers 37 FCEBs (Fuel Cell Electric Busses) with an average mileage of 2 million kms.

Ballard’s China unit Weichai-Ballard JV has begun building LCS-based modules. Essentially, these are large fuel cells that function as backup power.

In September the company announced a partnership with Audi to build its high-performance fuel cells for vehicle propulsion. These will be used in light, medium, and heavy-duty vehicles.

Despite the supply chain disruptions due to COVID-19, Ballard Power (NASDAQ: $BLDP) has managed to restore its supply chain and land a few key partnerships.

Similar to Telsa – and probably any new automotive company – their current main barrier to overcome the ramp-up of the production and deliver on the outstanding orders.

With big orders and important partnerships comes great responsibility.

Ballard Power has all the premises environment, favorable policies, capital, and market timing aligned. Now all they need to do is execute and execute well.

The company certainly has a very positive outlook.📈

 

William Ward Jr.
William Ward Jr.

Bill holds a MS in Finance with a Capital Markets concentration and has invested in both equity markets and forex for the last decade. In the past, Bill has worked in the airline industry as a Station Manager. Working in middle management for small airlines helped him develop a deep understanding of the economics and operational environment of the airline industry. Bill also worked as a manager in the clothing industry setting up and managing Mill Outlet retail stores across the US, where he developed a strong understanding of the retail business. In the mid-80s Bill was an entrepreneur running two video retail stores for ten years while attending University. He later worked for Gateway Computers as a PC technician and thereafter opening his own PC Business. Through these experiences, Bill is able to leverage his deep knowledge and provide unique investing insights. When he is not working, Bill dabbles at golf, spends time with his yellow lab Killian, and gives back to his community by helping solve municipal issues.

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