Valuation of Nel Hydrogen ASA
Master thesis
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http://hdl.handle.net/11250/2560594Utgivelsesdato
2018Metadata
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- Master Thesis [4487]
Sammendrag
With today’s problem of Global Emission and rise in Greenhouse gas, they way how
economy depends on conventional sources of energy must change. To solve this problem
several governments and NGOs are shifting focus on green and renewable technology. One
of several clean energy companies, Nel Hydrogen ASA is a Norwegian company
manufacturing technology, plants, service and solution focused on production of Hydrogen
using renewable source of energy.
Aim of this this study is to fairly value Nel Hydrogen equity using three stage DCF-model
through weighted average cost of capital. Several assumptions are made based on its
historical performance and thorough analysis of fuel cell industry and markets. Its market
positioning is in strong position due to its long expertise and control of value chain. It is a
fast-growing company with high growth ambition and fulfilling it by two major acquisition
in 2015 and 2017.
Estimation of its future free cashflows and Net Present value shows that Nel Hydrogen
equity is not fairly priced in the market. DCF three stage model price its share at Kr 10,06
whereas market price is Kr 2.99. Relative valuation using EV/Revenue multiple supports the
DCF estimates. But sensitivity analysis reveals that the company is highly sensitive to
growth rate and discount rate. Study concludes that one should invest in Nel hydrogen to get
good return in the future.