HYZN

Please note, on 7/15/21 Decarbonization Plus Acquisition Corporation (DCRB) merged with HYZON Motors Inc (HYZN) and assumed its company name. The content of this idea will make reference to the original SPAC.

​Publicly traded companies mentioned herein: Air Products and Chemicals Inc (APD), Ballard Power Systems Inc (BLDP), CF Industries Holdings Inc (CF), Coca-Cola Co/The (KO), Cummins Inc (CMI), Decarbonization Plus Acquisition Corp (DCRB), FuelCell Energy Inc (FCEL), Goldman Sachs Group Inc/The (GS), Heineken NV (HEIN SW), Nikola Corp (NKLA), Plug Power Inc (PLUG), TOTAL SE (TOT), Yara International ASA (YAR NO)

Highlights

The presenter is long shares of Decarbonization Plus Acquisition Corp (DCRB), which is merging with Hyzon Motors in a deal that will value Hyzon at $2.7B. Hyzon manufactures hydrogen fuel cells to power long-haul trucks. There is a belief that hydrogen can transform the world, as it burns cleanly and is being embraced in Europe as a solution to carbon emissions. This deal occurred in early February, received little attention, and is currently trading at a proforma implied market cap of just ~$3B. In contrast, there is a universe of stocks that trade at 30x sales in the out years which have received a “hydrogen halo” in the market (PLUG, BLDP, FCEL, and Hyzon’s closest comp NKLA). NKLA, which makes hydrogen fuel cell trucks, lacks current revenue and has faced accusations of fraud, is being valued at ~9B. In contrast, Hyzon already has several hundred units on the road with blue chip customers, a committed backlog for 2021, yet appears to have been overlooked with regard to the “hydrogen halo.” The presenter believes the market should value DCRB at $9B, if not higher, when comparing it to companies like NKLA. Hyzon’s business strategy is also more timely than other hydrogen stocks, as it is more applicable in the current early innings of hydrogen. As the market knowledge and understanding of the company grows, he believes this valuation gap will close.