Japan’s Iwatani shares hit all-time high on hydrogen strategy.
Shares in Iwatani (8088.T), Japan’s top hydrogen supplier, hit a record high after the previous day’s government pledge to provide trillions of yen to help the sector increase supply of the gas to help achieve carbon neutrality.
Hydrogen has been touted as a clean alternative to fossil fuels, and major industries including energy, autos, steel and chemicals are exploring how to switch to hydrogen to reduce carbon emissions.
Japan plans to invest 15 trillion yen ($107 billion) over 15 years to supply the country with hydrogen, with supply rising to 12 million tonnes a year by 2040 and to 20 million tonnes by 2050 from 2 million tonnes now, the government said on Tuesday.
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On Wednesday, Iwatani’s shares hit an all-time high of 7,800 yen per share before closing at 7,658 yen, or 7.1% higher, also a historic high, Refinitiv Eikon data showed, versus Japan’s Nikkei share average index (.N225) which was 1.82% down.
Jefferies analysts said in a note on Wednesday:
We’d expect Iwatani to benefit from Japan’s revised hydrogen roadmap; using subsidies to lower the price of hydrogen to match costs of fossil fuels.
hey raised Iwatani’s target price by 19% to 9,500 yen per share from 8,000 yen previously and reiterated their buy rating.
The supply chain plan unveiled by the government should start yielding commercial production by around 2030, Jefferies said, and increased supplies should lower the hydrogen price from 100 yen per cubic meter now to 30 yen in 2030 and 20 yen in 2050.
“The government will consider subsidising the difference so that the selling price can be kept to the same level as existing fuels such as liquefied natural gas and coal,” the note said.
Iwatani did not immediately reply to a Reuters request for a comment.
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Japan’s Iwatani shares hit all-time high on hydrogen strategy, June 7, 2023
