As the world gears up for the UN Climate Change Conference (COP 26) in Glasgow, UK, on November 1-12, 2021, all eyes will be on country’s emissions reductions commitments. It will also be a good time for those companies that are focused to help reduce emissions, such as dynaCERT Inc. (TSX: DYA | OTCQX: DYFSF | FRA: DMJ).
dynaCERT is focused on reducing emissions and improving fuel efficiency with their Carbon Emission Reduction Technology (CERT) used with internal combustion engines. Their flagship product is HydraGEN™, an electrolysis unit that produces hydrogen (H2) and oxygen (O2) gases to optimize the fuel burn, resulting in a 6-19% increase in fuel economy and dramatic reduction in emissions. dynaCERT has spent C$70 million and 17 years developing the HydraGEN™ technology.
HydraGEN™ emissions benefits
Source: Company presentation
dynaCERT gives a good business description stating:
“The Company is engaged in the design, engineering, manufacturing, testing, and distribution of a transportable hydrogen generator aftermarket product, currently in use in the heavy Class 6-8 tractor trailer industry, the smaller Class 2-5 trucks, stationary power generation, off-road construction machinery, and mining and targeted for use in refrigerated trailers and containers, and forestry industries, with potential for application in the ocean shipping and trans-continental rail industries.“
Despite the COVID-19 disruption, dynaCERT has signed up 7 new global dealers
Unfortunately, the last year or so has seen a severe disruption to dynaCERT’s business both in terms of the supply chain disruption and also the global sales distribution. During Q2 2021, dynaCERT shipped 74 HydraGENTM units to dealers and clients. For the second quarter to June 30, 2021, the Company recognized sales of C$414,503 (compared to C$19,805 a year ago) and for the six months ended June 30, 2021, the Company recognized sales of C$464,296. These figures are below expectations due to the COVID-19 impact.
On a brighter note, dynaCERT now has 47 qualified agents and dealers operating in over 38 countries worldwide. The dynaCERT HydraGEN™ line of products is ready to be presented to a market potential of more than 100 million vehicles. Despite the disruptions, dynaCERT has been able to sign up 7 new dealers – 6TAVADA LDA (Portugal), SSiE (Canada), ESAMETAL S.r.l. (Italy), SIMMAX Power Generation (Canada), Simply Green Ltd (Canada), GridFix, (Australia), and ACR Industrial Supplies (Colombia and Peru).
In addition, Alltrucks GmbH & Co. AG (Germany) has initiated promoting dynaCERT’s HydraGEN™ technology to 300 of Alltrucks partner establishments in Germany.
In Q1 2021, dynaCERT received purchase orders with advanced payment of 20 HG1B units for the North American continental trucking customers of KarbonKleen which is furthering its successful trials to its trucking and logistics clients. This is not part of the subscription program for 3,000 units.
The city of Woodstock has had a conventional public transit bus and a recycling packer truck installed with HydraGEN™ HG2R technology units. dynaCERT is also working with Provincial and Federal Governments, several municipalities and power utility providers across Ontario supplying quotes and extensive analyst reports for their fleets showing the potential fuel savings, as well as the emissions reductions and greenhouse gas reductions that could potentially be realized with the utilization of HydraGEN™ units.
Finally in the key North American market dynaCERT recently stated: “In Q2 2021, dynaCERT has received purchase orders of the Company’s newest 2021 models HG1 and HG2 units through several Dealers continuing to penetrate the North American logistics, trucking and consumer markets, including smaller commercial delivery/service vehicles.”
dynaCERT expertise in Hydrogen Clean Technology
In recent times dynaCERT has increasingly become known as an expert in Hydrogen Clean Technology. This was seen back in March 2021 when it was announced that dynaCERT had achieved Local and Global milestones and became part of the Ontario Hydrogen Strategy Coalition, effectively attending meetings of the Hydrogen Strategy Working Group.
Then in June dynaCERT announced that they had accepted a strategic collaboration to advise Galaxy Power, from time to time, on general innovative Hydrogen Clean Technology advancements throughout Canada.
dynaCERT investment highlights
Source: Company presentation
dynaCERT has been impacted by COVID-19 and as a result, the Company’s revenues have been lower than what was expected. On the positive side, the global number of dealers has increased, which better positions dynaCERT to capitalize when the market recovers. Also, we are rapidly approaching the COP 26 UN Climate Change Conference in November 2021 when all eyes will turn towards emissions reductions.
For investors, the stock price is less than half of where it was a year ago and trades on a market cap of C$108 million. Given the enormous demand to reduce vehicle emissions and boost fuel efficiency then dynaCERT should recover soon.