In the case of Imperial College spin-out Ceres, the investment case continues to be clouded by uncertainty over when it will sign joint venture deals in China.
The lack of an update on this front kept shares under pressure today, even though the roll-out of partnerships with Bosch of Germany and Doosan in Korea helped half-year revenues to rise 17% to £11.3 million.
With an asset-light licensing model, the company’s electrochemical technologies are used to develop fuel cells for power generation, electrolysis for the creation of green hydrogen and for energy storage.
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The former AIM stock reiterated its full-year guidance and reported a sector-leading gross margin of 61%, up from 49% the year before. Investment in future projects increased by 19% to £30.6 million.
Shares fell 4.4p to 325p but analysts at Investec Securities and Berenberg are excited by prospects after highlighting share price targets of 1,035p and 1,025p respectively.
Investec said Ceres had important milestones ahead, with Doosan and Bosch expected to hit first production next year and the company’s second-generation design of fuel cell stacks poised to enhance the offering to existing and future partners.
Ceres is also ramping up its electrolysis operations, which Investec believes could be a “game changer” with the potential to become the largest part of the business later in the decade.
Berenberg added: “We retain our buy rating and continue to believe in the huge potential of Ceres’s differentiated technology and capital-light licence and royalty business model.”
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Global volatility and the need for energy independence boosted shares above 700p last year, although valuations across the sector have been held back by rising costs and interest rates.
ATOME shares peaked above 150p last year as Europe’s race to reduce reliance on Russian gas heightened interest in the green hydrogen and ammonia production company.
Its projects in Paraguay and Iceland are ideally suited to produce green hydrogen given the continuous supply of green electricity, while higher fertiliser prices have shown the appeal of green ammonia as a suitable alternative feedstock.
Shares were unchanged at 93p today as a wider loss for the six months of $2.9 million (£2.4 million) was offset by operational progress, led by its flagship Villeta project in Paraguay.
Phase one of Villeta is on track to achieve a final investment decision by the end of the year, with construction activities commencing immediately afterwards. ATOME said the project will be the largest green fertiliser production facility in the world when it comes on stream at the end of 2025 and has the capability of serving domestic and South American as well as European and Asian markets.
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