Upcoming AWS Coverage on A. O. Smith Post-Earnings Results
LONDON, UK / ACCESSWIRE / February 17, 2017 / Active Wall St. blog coverage looks at the headline from Ballard Power Systems Inc. (NASDAQ: BLDP) as the Company on February 16, 2017, that it has entered into a definitive agreement with Broad-Ocean Motor Co., Ltd, regarding technology transfer, licensing and supply arrangements. Under terms of the deal, Broad-Ocean will manufacture fuel cell modules in three strategic regions in China, including Shanghai. The deal is concerns the assembly and sale of FCvelocity® 30-kilowatt (kW) and 85kW fuel cell engines in China. The deal will be executed with an estimated value of approximately $25 million in revenue to Ballard over the initial five-year term, which includes $12 million in Technology Solutions Revenue. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of Ballard Power Systems' competitors within the Industrial Electrical Equipment space, A. O. Smith Corp. (NYSE: AOS), reported on February 02, 2017, its Q4 2016 financial results. AWS will be initiating a research report on A. O. Smith in the coming days.
Ballard views this agreement as an opportunity to bank on the large-scale urbanization and ever increasing demand for effective mass transportation which is yet again, environmentally viable. This partnership with Broad-Ocean is viewed as the central piece of China strategy where the Company plans to establish a comprehensive local fuel cell supply chain and build related ecosystems. Broad-Ocean plans to engage with local governments as well as bus and commercial vehicles OEMs across each of the three assembly operation locations.
The payments concerning the agreement will be made to Ballard at closing and as per certain commissioning milestones, initial supply agreements, and recurring royalty payments. Each fuel-cell engine manufactured by Broad-Ocean will use FCvelocity-9SSL fuel cell stacks. These fuel stacks came into light when Ballard inked a landmark deal for local production of fuel cell stacks in China. The agreement had a contemplated minimum value to Ballard of about $168 million over 5 years. Under terms of the agreement, Ballard and Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd, would establish a Fcvelocity-9SSL fuel cell stack production operation in the City of Yunfu, in Guangdong Province.
The Two Companies
Prior to this agreement with Broad-Ocean, Ballard collaborated previously with Broad-Ocean to announce a $28.3 million equity investment in Ballard on July 26, 2016. The agreement was viewed as a step to integrate Ballard fuel cell modules with Broad-Ocean EV drive systems to deliver turnkey fuel cell engines to consumers. Additionally, the $28.3 million investment was a step to enhance market development activities and product development for hydrogen fuel cell vehicles, including the commercial ones. This agreement signed on February 16, 2017, can be figured as an extension to the growth prospects, the Companies have hit on.
On January 24, 2017, Ballard landed on a deal with Zhuhai Yinlong Energy Group for 10 FCveloCity®-MD 30-kilowatt fuel cell engines. The Company plans to deliver the engine within the FY17 and integrate into Yinlong buses that will be deployed in Beijing. This agreement was anticipated as a unique growth opportunity into Chinese mass transportation market. Prior to the announcement, Ballard established on January 24, 2017, that it is the first fuel cell Company to power buses for more than 10 million cumulative kilometers of revenue service.
The transaction is subject to customary closing conditions and is expected to close by the end of Q2 FY17.
At the closing bell, on Thursday, February 16, 2017, Ballard Power Systems' stock climbed 4.06%, ending the trading session at $2.05. A total volume of 1.65 million shares were traded at the end of the day, which was higher than the 3-month average volume of 640.95 thousand shares. The Company's share price has gained 52.99% in the past twelve months and 24.24% on YTD basis. The stock currently has a market cap of $345.90 million.
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