Fuel cell producer Ballard Power Systems Inc. BLDP revealed that it has signed a Long-Term Sales Agreement ("LTSA") with Poland-based Solaris Bus & Coach to supply fuel cell modules for use in the latter’s fuel cell buses in Europe. Per the contract, Ballard Power will equip the Solaris Trollino low-floor trolley bus with the 85-kilowatt FCveloCity-HD fuel cell module.
The initial order under the LTSA requires Ballard Power to supply 10 FCveloCity-HD fuel cell modules, with deliveries scheduled to begin in 2017.
Rising Demand for Fuel Cell Buses
Global demand for fuel cell buses has been on the rise of late as they represent a highly flexible and environment-friendly mass transportation solution. In addition, these buses are capable of operating on routes with no overhead or catenary wiring. Unlike battery electric bus routes, fuel cell buses do not require catenary wires or on-route recharging.
Solaris a major manufacturer of fuel cell buses and going ahead, Ballard Power expects to receive more orders from the company, which has operations in more than 30 countries including Latvia. The first batch of the fuel cell-powered buses will be delivered to Latvia.
Besides Europe, Asia, and in particular China, is becoming a big market for Ballard Power. In Sep 2016, the company announced the utilization of its fuel cell modules in the first batch of 12 buses, which have started operating in the District of Sanshui, in the City of Foshan, China.
Ballard’s Expansion in China
Given China’s population, there is always high demand for mass transportation solutions. Thus, these eco-friendly fuel cell buses will be able cater to a significant portion of the population, while ensuring lower emission levels.
China is projected to be a big market for fuel cell buses backed by government’s persistent focus on reducing pollution generated by factories, utilities as well as vehicles. This translates into lucrative opportunities for fuel cell module manufacturers.
Through its efforts to expand in China, Ballard Power finalized a manufacturing license and joint venture transaction worth a minimum of $170 million with a five-year term, inked a strategic alliance framework agreement with Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd. and entered into a memorandum of understanding with Broad-Ocean.
Ballard Power has significantly outperformed the Zacks Categorized Electric-Miscellaneous Component industry. The company’s current rate of return is 46.9%, compared to the industry average of 0.3% over the last 12 months.
The company has received numerous orders since the beginning of 2016 backed by its knowledge and expertise in fuel cell stack development, fuel processing, and systems integration. Ballard Power’s fuel cells provide optimum performance at low costs, thanks to the company’s investments in excess of $1 billion over the past three decades in the development of fuel cell technology.
Zacks Rank & Key Picks
Ballard Power currently has a Zacks Rank #2 (Buy). Other favorably placed stocks in the same space include TTM Technologies, Inc. TTMI, KEMET Corporation KEM and Rogers Corporation ROG, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TTM Technologies surpassed the Zacks Earnings Estimate by 12.5% in the preceding quarter. Moreover, its 2016 estimates improved 15.4% in the last 60 days to $1.20.
KEMET Corporation surpassed the Zacks Earnings Estimate by 175.0% in the last reported quarter. Further, its fiscal 2017 estimates moved up by 45% in the last 60 days to 29 cents.
Rogers Corporation surpassed the Zacks Earnings Estimate by 26.5% in the prior quarter. Also, its 2016 estimates moved up by 11.9% in the last 60 days to $3.65.
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