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Ballard Power Systems Inc. Message Board

  • kknauber kknauber Jul 16, 2001 11:57 PM Flag

    BLDP long term market analysis

    ok guys,
    just for fun i am going to do a quick and dirty analysis of the stock price, which is *really* hard to do for this stock.
    This is based on a *ton* of assumptions that we can all argue about.
    I want to guesstimate how many fuel cell auto engines these guys can cell 15 years from now, in a best case scenario. I am ignoring everything but auto engines. All calculations are in today's dollars. I ignore inflation cause it doesn't matter in these calculations.

    assumption 1: # of "brand new auto" customers in the world in 2015 = 500 million.
    assumption 2: new auto customer buys new car every 7 years
    This means 70 million new autos sold every year

    assumption 3: fuel cell engines have 10% market penetration in year 2015

    This means 7 million auto fuel cells are sold per year.

    assumption 4: BLDP has 70% of auto fuel cell market

    This means BLDP sells 5 million fuel cells per year.

    assumption 5: BLDP makes a 5% profit margin
    assumption 6: BLDP's portion of auto fuel cell system sells for $3000 in today's u.s. dollars. This is based on assumption that it must sell for $3000 or cheaper in order to compete with ICE.

    This means that BLDP makes $3000 * 5% = $150 u.s. dollars per engine.

    $150 per fc * 5 million fc's = profit margin of $750 million

    At this point, BLDP stock will grow about as fast as any other high cap stock, and enjoy a P.E. ratio of the average S&P company, which is a P.E. of 23.

    23 * $750 million = market cap of $17 billion.

    Current market cap of is $4 billion.

    If you compound $4 billion at 10% over 15 years, you end up with about $16 billion.

    So, based on these assumptions, if you stay invested in BLDP for the next 15 years, you will earn 10% on your investment each year (ignoring inflation of around 4% a year, that is). So if you add inflation in, you would be making 14% gain per year, a pretty damn good return on investment.

    Anyone care to argue these assumptions?
    Any stock analysts out there care to comment on the risk/reward of this investment :P ?

    -Keith

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    • I'm in BLDP for the ecomonic benefit of my two grandsons, ages 5 and 1, so I'm in it for the long haul.

      When the Chinese trade in their bicycles for Fuel Cell powered vehicles, My Grandsons will do very well. Thanks for the projections.

    • Ignoring bus/mass transportation, trains etc is a mistake. I believe mass transit use will come before fuel cell use in cars. The infrastructure will be easier to implement for mass transit. I think it is analagous to industrial power generation in the distributed power market, that is, businesses will be the first users of FC's (MCFC, SOFC) before the homeowner.

      Also, since there are really no business models to comare BLDP to, it really is hard to estimate what is going to happen. I think Ballard's ROI could be enormous and thaty your figures are very conservative.

 
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