3 days ago
Zero emission trucks fuel PH2 valuation
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Pure Hydrogen's zero-emissions vehicle strategy valued at 28c per share by MST Access, a significant premium to its current share price
Company expanding in Australia and overseas through distribution deal with Mexico's GreenH2 LATAM
Key catalysts include more vehicle orders, debt funding and the spin-out of its Australian gas assets
Special Report: Pure Hydrogen's continued progress in delivering its zero-emission (ZE) vehicle rollout strategy in Australia and the US has fuelled an MST Access valuation of 28c per share, well above the current price of 8.4c.
The broker research firm noted that during the third quarter of FY2025, the company recorded $2.2m in customer receipts as vehicle deliveries accelerated.
Work is progressing towards vehicle delivery and certification in the US, which has unmet demand stemming from the demise of rivals Hyzon and Nikola.
Pure Hydrogen Corporation (ASX:PH2) has also signed an agreement with GreenH2 LATAM as the preferred supplier of hydrogen equipment to two projects in Mexico and Columbia, marking significant progress in its strategy to grow its footprint in the international hydrogen market.
Increasing market acceptance is also evident as electric and hydrogen truck trials ramp up with suppliers Scania and Hyundai announcing zero-emission options for Australian logistics fleets such as TOLL.
MST adds the key catalysts that could propel PH2's share price towards its valuation include:
Announcing more orders for vehicles and services;
Establishing debt to fund working capital associated with those orders; and
A timetable for and then completion of the spin-out of its gas assets.
Taurus prime mover. Pic: Pure Hydrogen
Here and now solutions
MST notes that PH2 is providing real "here and now" transport solutions for medium to heavy vehicles which help its customers achieve net zero goals based around hydrogen fuel cell vehicles (HFCVs) and their supporting infrastructure as well as niche battery electric vehicle (BEV) solutions.
It points out that while BEVs dominate passenger fleets, it has unique challenges for certain heavy vehicle applications.
These challenges, which relate to issues such as recharge time, infrastructure and power delivery, can be addressed by HFCVs.
Validation for this strategy has been provided by product sales and trials with local councils and major corporations such as Pepsi and JJ Richards.
International opportunities are also promising with sales in Asia, distribution MOUs in the US and strong interest in Europe.
MST expects that part of the company's Q3 cash inflow reflects upfront deposits from recent orders, including two HFC prime movers for TOLL Transport and one concrete mixer agitator truck for Heidelberg Materials Australia.
It adds that final customer payments and associated revenue from the delivery of one HFC garbage truck to Solo Resource Recovery in February, two EV80 buses and single vehicle chargers to VITA in March will be reflected in PH2's H2 FY2025 numbers.
Looking further ahead, it expects the company's agreement with GreenH2 LATAM to deliver a $44m order within the next six months – likely in Q1 FY2026 – along with an upfront deposit.
MST expects that more than half of this revenue will be recognised in FY2026.
It also expects three more vehicles to be delivered between now and June 2025, bringing total vehicle deliveries in FY2025 to five.
In Asia-Pacific, the broker forecasts that four trucks and six buses will be delivered in H1 FY2026 with a further 10 trucks and seven buses in H2 FY2026.
It adds that while it doesn't assume that any vehicles will be delivered to the US by FY2025 given the current 12-month timeframe between order and delivery, it is forecasting that a garbage truck and a prime mover will be delivered in Q1 FY2026 with a further three months to complete the US regulatory process.
'We expect significant flow of orders from the US following successfully achieving US certification,' MST senior analyst Andrew Johnston added.
Watch: PH2 accelerates clean transport drive
Other activity
During the March 2025 quarter, Turquoise Group – in which PH2 holds a 40% stake – started commercial sales of graphene powder, produced using its methane pyrolysis technology.
Since 2023, PH2 has had exclusive rights to acquire hydrogen produced by TG in Australia for 20 years and plans to leverage its technology once proven.
The company is also looking to spin-out its Australian gas assets into a new vehicle – Eastern Gas – via an initial public offering to raise $8-10m to develop those assets. This remains subject to ASX and board approval.
MST expects that the company will increase its ownership of HDrive International, which develops and builds the zero emissions vehicles, from 70% to 100% at minimal further investment under the current corporate structure and relationship with HDrive.
This article was developed in collaboration with Pure Hydrogen, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Originally published as Growth trajectory of Pure Hydrogen's zero emissions vehicle strategy fuels 28c valuation from MST Access
