Top 4 Hydrogen Stocks in ASX 2024 – Emerging Market in Australia

As the world shifts towards cleaner energy sources, hydrogen has emerged as a promising fuel option due to its high energy density and zero carbon emissions. The Australian Securities Exchange (ASX) is home to a number of companies that are involved in hydrogen production and infrastructure development. In this article, we’ll take a closer look at the top hydrogen stocks in ASX.

Hydrogen stocks in asx
Top Hydrogen Stocks ASX

Best Hydrogen Stocks in ASX

1. Fortescue Future Industries (FFI)

Fortescue Future Industries is a subsidiary of mining giant Fortescue Metals Group, and is focused on developing green energy projects, including hydrogen. The company is planning to build a green hydrogen production facility in Western Australia, which will be powered by wind and solar energy. FFI has a market capitalization of approximately $7 billion.

2. Hazer Group (HZR)

Hazer Group is developing a low-emission hydrogen production technology that uses iron ore as a catalyst. The company is currently building a demonstration plant in Western Australia, and plans to scale up production in the coming years. HZR has a market capitalization of approximately $130 million.

3. Australian Gas Infrastructure Group (AGL)

Australian Gas Infrastructure Group is a leading energy infrastructure company that is involved in the distribution of natural gas, as well as the development of hydrogen infrastructure. The company is planning to build a hydrogen refueling station in Adelaide, and has also invested in a number of other hydrogen projects. AGL has a market capitalization of approximately $7 billion.

4. Australian Renewable Energy Agency (ARE.AX)

Australian Renewable Energy Agency is a government-owned corporation that invests in and supports renewable energy projects in Australia. The company is expected to play a significant role in the development and expansion of hydrogen infrastructure in Australia.

Fundamental Analysis

All four of these companies are involved in the development of hydrogen infrastructure, and are positioned to benefit from the growing demand for hydrogen as a fuel source. FFI is backed by the resources of Fortescue Metals Group, giving it a strong financial position. HZR’s proprietary technology gives it a unique competitive advantage, while AGL’s existing energy infrastructure gives it a strong foothold in the market.

1. Fortescue Future Industries (FFI)

In terms of financial performance, Future Fuel’s revenue increased by 126% in the first half of FY2022, compared to the same period in the previous year. The company has a positive net profit margin of 10.32%, indicating strong profitability. However, Future Fuel’s earnings per share (EPS) have been negative in the past three years, which is a concern for investors.

2. Hazer Group (HZR)

  • Hazer’s revenue for the fiscal year 2022 was AUD 1.12 million, which is significantly higher than the previous year’s revenue of AUD 0.08 million.
  • Hazer is not yet profitable, and its net loss for the fiscal year 2022 was AUD 3.97 million.
  • The company has a strong cash position with AUD 27.5 million in cash and no debt as of December 31, 2022.
  • Hazer is expected to benefit from the growing demand for clean energy and the increasing adoption of hydrogen as an alternative fuel source.

3. Australian Gas Infrastructure Group (AGL)

In terms of financial performance, AGL Energy’s revenue increased by 4.7% in the first half of FY2022, compared to the same period in the previous year. The company has a positive net profit margin of 4.92%, indicating strong profitability. AGL’s EPS has been negative in the past year, which may be a concern for some investors.

4. Australian Renewable Energy Agency (ARE.AX)

  • The company’s market cap as of April 7, 2023, is AUD 1.21 billion.
  • ARE has not reported any revenue for the fiscal year 2022.
  • The company’s net profit for the fiscal year 2022 was AUD 0.3 million.
  • ARE has a strong balance sheet with AUD 2.77 billion in assets and AUD 0.87 billion in liabilities as of June 30, 2022.

Market Capitalization of ASX Hydrogen Stocks

Fortescue Future Industries (FFI)

Approximately $7 billion

Hazer Group (HZR)

Approximately $130 million

Australian Gas Infrastructure Group (AGL)

Approximately $7 billion

Australian Renewable Energy Agency (ARE.AX)

Approximately $1.21 billion.

Also Read: Up Bank Vs UBank Australia

Will Hygroden stocks grow in coming years in Australia?

Hydrogen stocks are expected to grow in Australia due to the increasing focus on clean energy and reducing greenhouse gas emissions. The Australian government has announced various initiatives and investments to promote the hydrogen industry in the country.

In addition, Australia has abundant natural resources like renewable energy sources and natural gas, which can be used to produce hydrogen. This, coupled with growing demand for clean energy, makes hydrogen stocks a promising investment opportunity in Australia.

Facts to consider before investing

  1. The Australian government has announced a National Hydrogen Strategy, which aims to position the country as a leading global producer and exporter of hydrogen by 2030. As part of this strategy, the government has committed AUD 370 million in funding to support hydrogen-related projects.
  2. The Australian Renewable Energy Agency (ARENA) is supporting several hydrogen projects in the country, including the development of a hydrogen refuelling station network and the establishment of a renewable hydrogen certification scheme.
  3. Major companies in Australia are also investing in hydrogen. For example, Fortescue Metals Group is planning to build a 250 MW green hydrogen plant in Western Australia, while Origin Energy is investing in a 300 MW electrolysis plant.

Frequently Asked Questions (FAQs)

Q: Are hydrogen stocks a safe investment?

A: Like any investment, hydrogen stocks come with risks. However, the growth potential of the hydrogen sector in Australia is supported by the country’s commitment to the National Hydrogen Strategy, as well as major investments by government and private sector players.

The International Energy Agency (IEA) has also identified hydrogen as a key enabler of the transition to a low-carbon energy system, with global demand for hydrogen expected to grow rapidly in the coming years.

What are the major challenges facing the hydrogen industry in Australia?

The hydrogen industry in Australia faces several challenges, such as high production costs, lack of infrastructure, and a small market. Hydrogen production using renewable energy sources is currently more expensive than conventional methods, which makes it less competitive. Additionally, the lack of infrastructure, such as pipelines, storage facilities, and refueling stations, makes it difficult to transport and distribute hydrogen. The small market for hydrogen in Australia also limits the growth potential for the industry.

How do hydrogen stocks compare to other renewable energy ASX stocks in terms of potential returns?

When compared to other renewable energy stocks, hydrogen stocks have the potential for significant returns due to the growing interest in green energy solutions and the potential for hydrogen to become a key component of Australia’s energy mix. However, it is important to note that hydrogen stocks are not the only option for investors interested in renewable energy. Other stocks in the renewable energy sector, such as wind and solar, also have strong growth potential.

Ultimately, the potential returns of hydrogen stocks will depend on a variety of factors, such as government support, advancements in technology, and the development of infrastructure. Investors should carefully consider these factors and do their own research before making any investment in these hydrogen stocks in ASX. Visit ThinkMoneyTrader for more financial bytes like this.

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