MIDAS Share Tips Update: Fuel cell firm Ceres Power ahead

Last Friday was a terrible day for families and businesses across the UK. Energy prices have risen and are likely to rise further in the coming months.

Ceres Power produces fuel cells that provide heat and energy, using about 30 percent less fuel than conventional gas and electricity sources.

This daring British business, including its headquarters in Harsham, West Sussex, has formed partnerships with some of the world’s largest companies, such as Bosch of Germany and Dusan of South Korea, so that they can work together, advance Ceres technology and use it.

Future: Ceres Power builds fuel cells that provide heat and energy, using about 30 percent less fuel than conventional gas and electricity sources

Midas recommended Ceres in 2019, when shares were £ 1.75. The stock has risen to £ 7.45 since then and much more to come.

Three years ago, Ceres was valued at £ 265 million and employed about 150 people. Today, the board has more than 500 highly skilled workers, the group is valued at approximately 1.5 billion and is expected to move from Aim to the core market later this year.

The company is a pioneer in fuel cell technology – creating individual cells that can be installed in homes, offices, large warehouses and even at sea. Currently powered by natural gas, these cells are highly efficient because they provide energy to the source without relying on the grid and they produce energy and heat.

Ceres chief executive Phil Caldwell is also developing a way to make ‘green’ hydrogen from his fuel cell. Made with wind and solar energy, it can transform the use of electricity for heavy industries and ships. Importantly, Ceres fuel cells can be powered by gas or hydrogen, so customers can install them now and the technology can turn green as it matures. Caldwell has deliberately adopted a partnership model, licensing its technology to deep-pocketed partners so that they can pay Ceres to build and operate fuel cells.

The cells are already being tested on buses in China and in offices in Japan. Bosch is building about 100 fuel cell power plants across Germany, Doosan is building a maritime system and is in talks with potential partners here and abroad.

Revenue rose 44 percent to .7 31.7 million in 2021, and analysts expect even greater growth this year and beyond, hitting £ 72 million by 2025. The group is at a loss today because Caldwell is investing heavily in future growth and ideas, such as new hydrogen cells. But in 2025, profits will start to rise, then continue to rise.

Midas verdict: The UK stock market can be wary of high-tech, loss-making businesses, often with good reason. However, getting Ceres deserves more confidence. Cleaner, the need for more efficient energy has never been greater and Ceres offers a proven way to do more with less fuel cell. Bosch’s presence as a partner and 17 percent shareholder further assures ৷

At 45 7.45, shares have risen sharply since 2019, but they reached a high of £ 13.40 last year, although the firm has grown stronger. Existing shareholders may want to sell some stocks and make a profit bank, but they should hold most of the holdings. New investors can also fancy a punt at current levels.

Traded: AIM Ticker: CWR Contact: ceres.tech or 01403 272463

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