Hydrogenone Capital Growth Share Discussion Threads

[adobbing] 14/11/2023 12:35

Also listened and noted that major investors in the companies they have invested in, have invested and are still investing at higher prices than HGEN.

[pj84] 14/11/2023 11:54

Just listened to the 3rd quarter update.

The timing of exits from current investments are out of their control but they are hopeful of some activity in the first few months of 2024 which sounded positive.

One interesting fact they mentioned with regard to the low share price, which continues to be driven my market sentiment on the renewables sector particularly in the current high interest rate environment, is that they can see that there institutional investors are stable and taking a longer term view and that it is the retail shareholders who are currently trading and influencing the share price.

Despite the discount everything seems to be progressing well.

[amt] 14/11/2023 07:33

NAV 101p share price 45p

[pj84] 26/10/2023 16:35

The whole hydrogen sector is suffering at the moment. Lets hope that todays initial fall of 10% which has been met with a flurry of buyers pushing the fall to the low single digits is a sign we are near the bottom.

[pottsypotts] 11/10/2023 16:07

Not a holder of these ( yet) quick question for holdersWhy only a slight rise which on face value seems really positive news

[pj84] 24/9/2023 13:04

The above article is about the potential decarbonisation of the Port of Milford Haven and is a general article of the potential investment in hydrogen amongst other solutions continuing to become a reality in the future energy mix.

The article is very long and the following are some key excerpts from it.
“In one form or another, the Welsh port is a conduit for more than a quarter of Britain’s energy supplies.”

…

“RWE operates the Pembroke Power Station on the south side of the waterway. The facility is currently one of the largest and most efficient gas power stations in Europe. But within the next two years, bosses will have to make key decisions about its future.

“If you just carried on with business-as-usual, then effectively you would have to close on December 31, 2034,” says Roland Long, site manager of Pembroke Power Station. “So you ask yourself, what are the options?”

RWE is considering turning the power station green by capturing direct emissions from its gas-fired units and storing them. The emissions would have to be converted into liquified CO2 and then transported elsewhere – probably to be piped into emptied oil and gas reservoirs underneath the North Sea.

At the same time, the German company is exploring the development of two “green” hydrogen production plants where electrolysers would convert water into hydrogen and oxygen using renewable electricity.

It is also looking at the possibility of an on-site battery storage plant. And land has been set aside for a separate, “blue” hydrogen facility where natural gas would be combined with steam to produce hydrogen.

All options are on the table.”

……

“Sarah Williams, director of asset strategy at gas network operator Wales & West Utilities, says her company is currently exploring plans for an 80-mile steel pipeline called HyLine Cymru.

But the project cannot go ahead without guarantees that there will be both production of hydrogen locally and - most crucially - willing customers.

“This would be a major project to support industry,” Williams says. “But there’s clearly no point in building a pipeline if we can’t confirm the hydrogen is going to be available to go through it or if there are no customers who are going to use it.”

Some of the demand is expected to come from transport. South Wales Transport is currently trialling buses that use hydrogen fuel cells, for example.

However, a string of big industrial users must sign up for the sums to stack up.”

……

“Combined plans could inject £6bn into local economy.

Even if Port Talbot won’t be using hydrogen for its electric arc furnaces, Sawyer argues the recycled steel the plant will produce should be suitable for making the wind turbines.

“I actually see the steel announcement at Port Talbot as fantastic, because that was always going to be the long pole in the tent.””

[pj84] 22/9/2023 15:00

The ADVFN trade data is always a best guess but today it shows nearly all the trades as sales but I have topped up my holding paying 55.1305p per share and it looks like the vast majority of the trades at 55p plus are buys.

[1c3479z] 20/9/2023 19:12

webinar hint that they're in realisation mode on some of their investments in the next 3 yr and that realisations can come at any time. So, wonder if they've got any sale deals in the early pipeline?

[pj84] 20/9/2023 18:32

Meant to add I always like management teams who believe they can better use any cash by investing it in the business rather than using it for buybacks.

[pj84] 20/9/2023 17:29

hTTs://citywire.com/investment-trust-insider/news/hydrogenone-we-re-now-in-exits-territory/a2426206?re=112969&ea=1341638&utm_source=BulkEmail_Investment+Trust+Insider+Daily&utm_medium=BulkEmail_Investment+Trust+Insider+Daily&;utm_campaign=BulkEmail_Investment+Trust+Insider+Daily

"HydrogenOne: ‘We’re now in exits territory’

The managers of the heavily derated trust are excited about larger investors moving into the hydrogen sector as positive portfolio news fails to narrow the entrenched 45% discount.

BY
JAMIE COLVIN

The managers of HydrogenOne Capital Growth (HGEN) are hopeful they will exit several holdings in the upcoming year, which will rerate the shares that languish at a 45% discount to the June net asset value (NAV).

JJ Traynor and Richard Hulf told Citywire they had completed the investment phase, having invested £111m across hydrogen production, supply chain and storage technologies since launching the fund in July 2021, including £8m over the period, and were now moving into the harvesting phase.

They pointed to strengthening fundamentals in the clean hydrogen sector, with £13bn invested in green hydrogen specifically year to date, a 380% increase on 2022, through company flotations.

Consolidation is therefore likely to be next meaning Hulf and Traynor have begun the process of appointing investment banking advisers to several private companies in the portfolio in preparation for any potential bids.

‘The news flow over next year will be about exits, offtake agreements being signed on projects, keys being turned, hydrogen starting to flow and much bigger investors coming into the market and joining them,’ said Hulf (pictured below left with Traynor). ‘That’s what you’ll see – a slight change in complexion for the fund.’

Richard Hulf and JJ Traynor - HydrogenOne
Positive portfolio news has failed to budge the shares in the longer term, with the current 54p share price well below the 2021 launch price.


Interim results, which showed NAV increased 3.5% to £130m over the six months to the end of June despite increased discount rates of 13.7%, only drove the shares up 2.5%.

The portfolio, of which 91% are private companies, delivered £52m in total revenue over the 12 months to the end of June, a 170% year-on-year increase, while the valuation of the private portfolio is at least 30% lower than comparable listed companies.

The trust’s investments span the UK, Netherlands, Germany and Scandinavia, with several quoted companies listed in the US, Canada, France and South Korea.

The pair have not deployed all of the £126m raised at the trust’s launch, retaining an uncommitted cash position of £9m, which they intend to use for further follow-on investments, rather than share buybacks.

‘We have the facility, but it’s not on the table today,’ Traynor said. ‘We’ve been good at deploying into successful businesses and can’t see that buybacks are a good use of capital.’


The trust’s largest position is leading German industrial electrolyser producer Sunfire, which makes up 20% of assets following HGEN £1.8m follow-on investment over the period.

In August, the company received a purchase order for a 100-megawatt pressurized alkaline electrolyser in a supply agreement with a leading European refinery, which marked a key milestone.

Sunfire also received €169m in funding under the EU’s important projects of common European interest (IPCEI) scheme to establish the first industrial series production of its solid oxide and pressurised alkaline electrolysis technologies."

Just listened to today's investor meet presentation which I would strongly recommend not just for this trust but also some well informed commentary for any investors in the hydrogen sector.

Has reaffirmed my belief in how undervalued Hydrogenone is at the moment.

[weyweyumfozo] 24/8/2023 18:08

Sunfire secures 100MW electrolyser order for European refinery



HGEN's Sunfire holding is 20% of HGEN's NAV.

[pj84] 07/8/2023 19:55

I have now listened to the presentation and as above Richard Hulf was keen to point out the real disconnect at the moment between the reality of the NAV and the current share price which reflects the market's current risk off approach.

I thought the following at 18 minutes 42 was particularly enlightening in trying to point out that the fund isn't a venture capital fund investing in startup businesses: -

"... the key thing we look for in the companies we invest in, they've got to have scalability, they've got to have cashflows and revenues and they've got to have materiality. So investors shouldn't doubt, this is an industrial fund, investing into industrial scale businesses, there are no small scale start up businesses, this is not venture capital, this is scale up and growth investment into the real global hydrogen sector..."

[pj84] 07/8/2023 18:28

Hoping to catch up with today's investormeet presentation later but just quickly read the following update



HydrogenOne jumps 12% after second-quarter uplift to valuations

HydrogenOne Capital Growth narrows its wide discount after eking out a small rise in NAV as gains in its unquoted portfolio offset the impact of rising interest rates.

BY JAMIE COLVIN

Shares in HydrogenOne Capital Growth (HGEN) jumped 12% to 55p today as the investment trust continued this year’s volatile run after impressing sceptical investors with a small second-quarter rise in net asset value (NAV) accompanied by a surge in revenues from its 10 loss-making companies.

Speaking to shareholders, co-manager Richard Hulf said there was a complete disconnect between the NAV, which rose 0.7% to 100.7p in the three months to 30 June, and the shares, which closed at a yawning 51% discount on Friday, which is among the widest valuation gaps in the renewable infrastructure sector.

Launched two years ago, HydrogenOne shares peaked at 120p in November 2021 before more than halving to their current level as investors questioned the valuation of its unquoted assets as inflation and interest rates rose rapidly.

Nevertheless, the latest update showed good valuation uplifts to its private equity positions in green hydrogen companies in the UK and Europe, even though an increase in its discount valuation rate from 12.8% to 13.7% weighed on the NAV and offset most of the gains.

Total revenues of £52m over 12 months marked a 170% increase year on year leaving the closed-end fund with cash of £8.9m and £3m in listed hydrogen companies that could be sold if necessary after making £2.6m of follow-on investments in Cranfield Aerospace Solutions and Thierbach (a development project for the construction of an industrial scale green hydrogen producer in Germany).

Despite earlier reassurances to investors that there was nothing amiss with the portfolio, HGEN shares have tumbled 38% this year. Hulf blamed macroeconomics for depressing sentiment rather than trust-specific news.

‘Company revenues are growing, businesses are doing well, new projects are starting up and governments are increasingly putting money in,’ said Hulf (pictured below left, with co-manager JJ Traynor). ‘Hydrogen has had many false starts, but is now going ahead. We’ll show that through the interim results next month.’

Richard Hulf and JJ Traynor - HydrogenOne
He implied that the trust conservatively values its assets, with last month’s flotation of the green hydrogen firm Thyssenkrupp Nucera, which has been valued at €3bn, having a direct read across with HGEN’s largest holding, Sunfire, a leading German industrial electrolyser producer in which the fund has 20% invested.

In terms of the trust’s pipeline, Hulf said they were looking into US green hydrogen projects that benefited from the Inflation Reduction Act. However, investments there would have to wait until the trust regained a premium over NAV in order to raise more capital through a share issue.

Hulf emphasised that as a growth fund, they did not have the cash available to buy back stock, but would ‘think about it’ with the proceeds of any exits. He added that that could be as soon as next year when some of their investments would meet the minimum threshold of two times return on invested capital.

Liberum analyst Joe Pepper said valuing private market hydrogen companies was difficult given the nascent, loss-making nature of the portfolio, but continued to view the share price as overly discounting the challenges. He added that HGEN’s share price was highly volatile and underperforming listed hydrogen peers in the US.

[weyweyumfozo] 04/8/2023 08:55

From the last RNS:

....."Q2 2023 NAV and portfolio update are expected to be published on Monday, 7 August 2023.

Richard Hulf, Principal of the Company's Investment Adviser, HydrogenOne Capital LLP, will provide a live presentation relating to the Q2 Update via the Investor Meet Company platform on Monday, 7 August 2023 at 9am BST.".....

-----------------------------------------------------------------------------------

Hopefully there will be a decent bounce in the share price next week.

[weyweyumfozo] 27/7/2023 10:24

It's from six weeks ago, but a decent interview:

"Richard Hulf, Managing Partner at the HydrogenOne Capital Group investment trust, spoke to London South East and explained that his Hydrogen Fund gives investors a chance to invest in growth assets which retail investors wouldn’t normally have access to."



Richard Huff states that "Shares are undervalued, and are worth well over £1." The share price was 75p on 15 June 2023, the date of the interview.

[jonwig] 26/7/2023 14:38

Drop back in share price - almost certainly down to people objecting to hydrogen being added to gas in their boilers. Two trials have been stopped in the UK.

The amount of committed investment in EVs is so high, it won't be abandoned lightly. Most of the portfolio is unquoted. Private equity normally revalues two or four times a year.

[I sold on the basis of the failure in the first paragraph.]

[weyweyumfozo] 26/7/2023 14:16

I was hoping to jump from petrol engined to hydrogen powered with my next new car, and completely miss out electric. This should make long drives across Europe with quick fill ups possible in a few years time:

"The European Council has today (July 25) adopted legislation that will see hundreds of hydrogen refuelling stations deployed across the continent......

.......AFIR dictates that hydrogen refuelling stations serving both light- and heavy-duty vehicles must be deployed in all urban nodes and every 200km along the core TransEuropean Transport Network (TEN-T) by 2030.".....

..."“Once you have the initial obligation for the 665 stations, privately financed stations will follow because it will be a profitable business,” he said."...



The share price doubled from April to June this year, possibly on sentiment after an overdone fall. I assume NAV is still around 100p. Why the drop back down to 51p - sentiment again?? We must be due another leg up.

Also, does anyone know why NAV is now quarterly rather than daily? I can understand that it is a money saving measure, but wouldn't monthly be better?