Tuesday, 16 June 2020

myFC - Portfolio Addition


This is a small technology company founded in 2005 and listed on the Swedish First Growth North Market (similar to our AIM) in 2014. The company has a strong commitment to a fossil-free world. Its focus is micro fuel cells. The technology is modular as well as versatile and can be adapted to a wide range of applications from small hand-held devices to larger applications such as ebikes, drones and larger mobility solutions such as cars and boats.

The company has recently undergone a major organisational restructuring and has refined its strategy to position itself as a systems supplier and will cease the development and sales of its consumer products such as the JAQ charger.

myFC is at the cutting edge of a completely new solution to electric mobility and seeks to address the hybrid relationship between fuel cells and battery. The focus from this year will be as a world leader in fuel cell technology for the automotive industry as it transitions towards zero emissions solutions to replace petrol and diesel.

Expansion

The company will need further cash to push forward with growth and further commercialisation of the technology. They are proposing a new share issue next month at 2 SEK per share to raise 52m SEK. This will include a major new European investor who will acquire 9.3m shares.

The EU has recently announced ambitious plans for a cleaner and greener Europe targeting net zero emissions by 2050. This additional funding will be used to further this ambition and secure the company's position as a global leader in the field of micro fuel cell technology.

The company have recently announced a joint collaboration with Qatar-based RahRah Technologies to evaluate the feasibility of integrating the fuel cell tech into their e-tuktuks and e-scooters. It will be interesting to see whether this leads to more profitable opportunities.

Conclusion

Some of my speculative acquisitions in the renewable hydrogen sphere have paid off handsomely over the past few months - AFC Energy, ITM Power, Ballard Power etc. - so I have used some of the proceeds from a partial sale of Proton Power to fund this addition to my portfolio. 

It is a small company which has gone through a period of restructuring in recent months, pays no dividend and has yet to deliver any profits so the purchase is again speculative. The market in which the company operates is likely to expand rapidly as global economies transition away from fossil fuels to renewable forms of energy but this does not necessarily mean myFC will be a beneficiary. I am spreading my net a little wider to diversify holdings in the niche sector and mitigate risk.

The shares were purchased earlier this week in my ISA with AJ Bell at the price of 1.82 SEK (equivalent to 16p per share).

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation... investing in smaller companies can be rewarding but is higher risk - always DYOR!

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