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Why This Hydrogen Co. Is a Buy
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Recently, Jericho Energy Ventures Inc., through its portfolio company H2U, achieved the successful demonstration of its first commercially viable proton exchange membrane (PEM) electrolyzer for hydrogen production, noted a recent report by Atrium Research.

Jericho Energy Ventures Inc. (JEV:TSX.V; JROOF:OTC PINK: JLM:FRA) made an announcement regarding its portfolio company, H2U. The company proudly revealed the successful demonstration of its first proton exchange membrane (PEM) electrolyzer for commercial hydrogen production, notable for its lack of iridium usage, reported Nicholas Cortellucci in an Atrium Research note.

Cortellucci commented that this achievement represents a major breakthrough for H2U, bringing them closer to resolving one of the most pressing challenges in the green hydrogen sector today.

Using its own 200kW containerized electrolyzer system, H2U successfully completed an in-house demonstration of its iridium-free electrolyzer. This milestone allowed them to gather additional data points, further reinforcing the durability and performance of their novel non-iridium catalysts on a commercial scale.

Building on this achievement, Cortellucci noted that H2U has plans to develop and construct its first external proof-of-concept units, which are scheduled for shipment by the end of 2023. 

"Currently, all commercially available PEM electrolyzers rely on iridium catalysts, which poses scarcity and supply-chain threats to the growing electrolyzer industry," Cortellucci said.

Cortellucci highlighted a finding from The International Energy Agency's Global Hydrogen Review. According to the report, in a net zero emissions scenario where proton exchange membranes (PEMs) supply all electrolyzer production in 2030, the demand for iridium would experience a staggering 9-fold increase, reaching 63 Kt. In light of this projection, H2U has embarked on a mission to address the pressing issues of production costs and supply chain limitations, ultimately paving the way for greater accessibility and cost-effectiveness of green hydrogen.

"We remind readers that JEV has invested a total of US$1.5M into H2U preferred shares, equating to 6.5% pro-forma ownership, and holds a board seat. H2U’s technology is based on ten years of research and development and US$122M in funding from the U.S.," Cortellucci said.

Structure and Predictions

In his research, Cortellucci said, "We continue to value JEV’s minority investments at cost due to their low visibility; however, given today’s release and the plan to ship proof-of-concept units by yearend, we foresee an opportunity to increase our valuation of H2U." He also shared current rating and target price information as well as current market data on the company. 

Rating: Buy

Price: CA$0.26

Target Price: CA$0.40

Return to Target: 54%

The company carries an enterprise value of US$50 million and a debt of US$3.3 million.

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Important Disclosures:

  1. Jericho Energy Ventures Inc. is a billboard sponsor of Streetwise Reports and pays a monthly SWR sponsorship fee between US$3,000 and US$5,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Jericho Energy Ventures Inc.
  3. Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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Disclosures for Atrium Research Corp., Jericho Energy Ventures Inc., June 27, 2023

Analyst Certification Each authoring analyst of Atrium Research on this report certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent, and objective views about any and all of the designated securities discussed (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the research, (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer, and (iv) the analyst does not own common shares, options, or warrants in the company under coverage.

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This report contains "forward looking" statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Such statements involve a number of risks and uncertainties such as competition, technology shifts, market demand and the company’s (and management’s) ability to correctly forecast financial estimates; please see the company’s MD&A “Risk Factors” Section for a more complete discussion of company specific risks for the company discussed in this report. ARC is receiving a cash compensation from Jericho Energy Ventures Inc. for 12-months of research coverage.

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