Getting involved in the hydrogen business on the ASX – Hazer (ASX: HZR)

There are not many ways to get involved in the hydrogen business on the ASX, however, one that springs to mind is Hazer (ASX: HZR). Plenty of talk at the moment on hydrogen and alternative renewables, especially after Elon Musk and Tesla (NASDAQ: TSLA) held their battery day. Nikola was in the hydrogen business. HZR has been going sideways for some time now.

• HZR has a low emission path to create hydrogen and synthetic graphite.
• It has a unique process to convert methane feedstock into the two key components.
• It has now a commercial demonstration project in WA. It uses biogas and will produce 100tpa at 99,99% purity of Hydrogen from 2m Nm3/year feedstock.
• It has also received Federal government funding of $9.41m to help with the Capex budget of $17M Equity placement at 42c which was upsized on strong demand.
• Target commencement of hydrogen production mid-2021.
• Market cap of $58m with cash around $17.2m. Also has a bunch of options (25.6m) at various prices from 40c to 120c.
• Mineral Resources (MIN) is a large shareholder.

The timeline is as follows: Now given the Morrison government push into hydrogen and clean energy sources, it could well shine some light on HZR. This from the company on the offtake potential: Hazer will continue discussions with BOC regarding potential short-term customer requirements but will move to self consume the hydrogen for power generation as the base case for operations. Not much in the way of broker coverage. Euroz did a report over 12 months ago with a PT of 85c. The broker highlighted the offtake agreement as the single biggest catalyst to the share price. It remains so. I have written a conclusion and recommendation for our members in my newsletter section called Henry's Take. I also write daily stock of the day and provide other ideas through a Small Cap Portfolio. You can access this and the rest of the Marcus Today content for free with a 14-day trial - CLICK HERE to get started.