MST Access: Accelerating vehicle orders validate Pure Hydrogen strategy

Pure Hydrogen’s growing order book for zero emissions vehicles validates its strategy to provide transport solutions based on heavy hydrogen fuel cell vehicles.

More orders for PH2’s zero emissions vehicles is a validation of its strategy. Pic: Getty Images

• Acceleration in orders for Pure Hydrogen’s vehicles validates its strategy to provide heavy HFCVs with supporting infrastructure

• MST Access values Pure Hydrogen at 31c per share on a DCF (Discounted Cash Flow) basis, based on the forecast growth of its vehicle sales pipeline

• MST Access expects company to receive 28 vehicle orders in FY2026

Special Report: MST Access believes accelerating orders for Pure Hydrogen’s zero emissions vehicles reflects demand for its solutions while providing early validation of its strategy.

It noted the company received orders for 24 vehicles in H1 FY2025, a big jump from just four in the previous 12 months.

While slippages in delivery time frames have pushed revenue into H2 FY2025 and H1 FY2026, MST said that having customers who paid deposits at the time of ordering vehicles reflected demand for Pure Hydrogen’s (ASX:PH2) solutions and meaningfully reduced the investment risk.

It validates the company’s strategy of providing real “here and now" transport solutions based around heavy hydrogen fuel cell vehicles with supporting infrastructure and niche battery electric vehicle solutions.

MST noted that while BEVs dominated passenger fleets, the technology faced unique challenges for certain heavy vehicle applications such as recharge times, infrastructure and power delivery that could be successfully addressed by HFCVs.

This is underscored by ongoing product sales and trials with local councils and major corporations like Pepsi and JJ Richards in the Australian market, alongside a robust international pipeline with sales in Asia, distribution MOUs in the US and strong interest in Europe.

Accounting for PH2’s order book for vehicle sales, the latest report by MST placed a valuation on Pure Hydrogen shares of 31c, marking a significant premium to the currently traded price of ~8c.

A similar version of the HFC truck to be supplied to Heidelberg Materials. Pic: Pure Hydrogen

Order book growth

The research firm said the 24 vehicles ordered in H1 FY2025 brought the total vehicles ordered but yet to be delivered to 30 as at December 31, 2024.

Since then, the undelivered order book has grown to 33 vehicles with the addition of two Taurus HFCV prime movers ordered by Toll Transport and the sale of a concrete agitator truck to Heidelberg Materials Australia.

This has increased receivables on the company’s balance sheet by $5.3m reflecting vehicle deliveries which have been invoiced but not yet paid (comprising $500,000 of the increase) and deposits received for orders placed.

MST said the $4.8m increase in receivables for which deposits had been received and the 30 vehicles ordered implied an average deposit of $160,000 for each vehicle although significant variation was expected due to vehicle cost and other factors.

“Based on an expected delivery time of 12 months, we expect that the full revenue associated with these 30 vehicles will be collected in the next 2 6-month periods,” it added.

PH2’s management has also expressed its expectations that delivery times will be reduced to nine months, which means that revenue from the latest orders could be collected in H1 FY2026.

Outlook

The company’s management expects revenue to improve in H2 FY25 and beyond as market acceptance of the vehicles and products grows in Australia and internationally, and as deliveries from earlier orders commence.

MST did note that the US environment was uncertain as while there was declining appetite to support EVs at the federal level, most states remained committed to an energy transition agenda, particularly in transport.

It added that with US tariffs on Chinese vehicles, PH2 was planning on locating vehicle assembly in Australia in order to meet US import requirements under the Australia-US Free Trade Agreement.

The research firm expects six of the 30 orders on the books as of December 31, 2024, to be delivered in H2 FY2025 with the remaining 24 delivered in H1 FY2026 along with the three vehicle orders received since then.

It also forecasts that PH2 will receive 28 vehicle sales in FY2026.

This article was developed in collaboration with Pure Hydrogen, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as MST Access: Accelerating vehicle orders validate Pure Hydrogen strategy