Nel ASA Surges on Samsung Deal – Is It Sustainable or Just a Short-Term Spike?

The Norwegian hydrogen specialist Nel ASA (LON:0E4Q) has entered into a strategic EPC (engineering, procurement and construction) cooperation agreement with the South Korean company SAMSUNG E&A Co., Ltd. This partnership enables SAMSUNG E&A to offer complete hydrogen plants using Nel’s electrolyser technology. In addition, SAMSUNG E&A has secured a 10 per cent stake in Nel’s newly issued shares through a direct placement, which corresponds to a 9.1 per cent ownership after the transaction. This makes SAMSUNG E&A Nel’s largest single shareholder.
 
The Nel ASA share has also performed really well since then. It has skyrocketed by around 50% at the stock exchange in Oslo. From the previous low of 1.962 NOK to the last high of 3.613 NOK, it has even risen by over 84%. And this, while in the US, concerns about a crash are growing from day to day.

The Stock at a Glance  

The stock has followed our forecast exactly. It has risen to the red box at 3.622 NOK. It is quite possible that it will rise further into the box to a maximum of 5.322 NOK. At the latest, however, we expect a final sell-off back into the purple box at 2.343 NOK to 0.5482 NOK at worst. Then the share has a realistic chance of a sustainable upward trend reversal.
 
Should the share now shoot straight out of the red box, then it has fully arrived in the uptrend. However, we doubt this. We consider hydrogen to be a trend topic that is not yet being applied enough. The most lucrative area will be shipping. However, this is not yet ripe for this topic.

Cooperation is Almost a Last-Ditch Rescue

Nel ASA, a global supplier of alkaline and PEM electrolysers, works with its customers both directly and through EPC partners. The new partnership with SAMSUNG E&A strengthens Nel’s global delivery capabilities and increases its competitiveness in the hydrogen technology market. And it urgently needs to, as Nel has recently been dogged by consistently poor results and a share price that has been in freefall for years.
 
SAMSUNG E&A, formerly Samsung Engineering (KS:028050), provides integrated solutions for the energy industry, including services such as feasibility studies, design, procurement, construction and commissioning. The company is particularly active in the fields of smart manufacturing, energy systems and infrastructure and is already involved in several major hydrogen projects worldwide.
 
In a separate agreement, Nel ASA will issue a total of 167,132,530 shares to SAMSUNG E&A at a price of NOK 2.1125 per share, for total proceeds of approximately NOK 353 million. SAMSUNG E&A has committed to hold these shares for at least two years. In addition, the board of directors of Nel ASA supports the nomination of a new board member from the ranks of SAMSUNG E&A for the 2025 Annual General Meeting.
 
It remains to be seen whether this pairing will benefit Nel ASA or Samsung (LON:0593xq) in the end.
 
Disclaimer/Risk warning:
The information provided here is for informational purposes only and does not constitute a recommendation to buy or sell. It should not be understood as an explicit or implicit assurance of a particular price development of the financial instruments mentioned or as a call to action. The purchase of securities involves risks that may lead to the total loss of the capital invested. The information provided does not replace expert investment advice tailored to individual needs. No liability or guarantee is assumed, either explicitly or implicitly, for the timeliness, accuracy, appropriateness or completeness of the information provided, nor for any financial losses. These are expressly not financial analyses, but journalistic texts. Readers who make investment decisions or carry out transactions based on the information provided here do so entirely at their own risk. The authors may hold securities of the companies/securities/shares discussed at the time of publication and therefore a conflict of interest may exist.