MIDAS SHARE TIPS UPDATE: Is Ceres rollercoaster about to climb again?

The world’s attempt to transition to green energy has been a rollercoaster ride so far, and Ceres Power’s shareholders have experienced many of these thrills and spills in recent years.

Ceres develops fuel cells that can be installed almost anywhere and can turn hydrogen and oxygen into electricity. It has also developed technology to produce hydrogen from steam.

But while it holds patents for these technologies it doesn’t intend to manufacture them itself, relying instead on partnerships with other businesses to reap royalties when manufacturing gets going.

Brighter future: After steep declines analysts say Ceres will see rising revenues

We will need clean hydrogen to meet net zero targets, but the Ceres share price became inflated in 2020 due to over excitement about the technology, before coming down to earth when investors ran out of gas. At one point Ceres was worth £2.7billion. Today it is worth just ten per cent of that.

Midas has been a long-term fan of Ceres, despite a share price that has fluctuated wildly, believing that its technology has widespread applications.

However, in 2022, those who heeded Midas’ call to take some profits at 745p will be grateful to have done so, as the shares are currently at 140p. 

This week’s fullyear results were long-awaited after they were delayed by auditors, but in the end, they weren’t as grisly as a delay might have suggested. Revenue was up 13 per cent year on year while pre-tax losses widened from £51million to £53million since last year.

The losses were higher than many estimated, due to high operating costs.

There was good news – the recently signed deal with Delta in Taiwan should be worth around £20 million in sales this year – but also bad news, with delays to production within its Bosch partnership and the three-way joint venture project between Bosch, Weichai and Ceres in China ‘unlikely to be completed in its current form’.

Chief executive officer Philip Caldwell says that licensing revenues from new partners will offset near-term delays in fuel cells royalties and believes Ceres will double revenues in 2024 compared with 2023.

MIDAS VERDICT: Ceres is very much a ‘jam tomorrow’ stock. It is still loss-making, and a more lacklustre attitude towards green energy of late has hit sentiment. Barring a huge breakthrough, it is unlikely to recapture the dizzy stock market heights it reached in 2020. However, as the partnerships it has signed begin to bear fruit, it is likely the share price will come off its current lows. Ceres shareholders should hold.

Traded on: Main market Ticker: CWR Contact: ceres.tech or 01403 272463 

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