Japan's Iwatani shares hit all-time high on hydrogen strategy
07/06/2023 11:05
By Katya Golubkova
June 7 (Reuters) - Shares in Iwatani 8088.T , Japan's
top hydrogen supplier, hit a record high on Wednesday after the
previous day's government pledge to provide trillions of yen to
help the sector increase supply of the gas to help achieve
carbon neutrality.
Hydrogen has been touted as a clean alternative to fossil
fuels, and major industries including energy, autos, steel and
chemicals are exploring how to switch to hydrogen to reduce
carbon emissions.
Japan plans to invest 15 trillion yen ($107 billion) over 15
years to supply the country with hydrogen, with supply rising to
12 million tonnes a year by 2040 and to 20 million tonnes by
2050 from 2 million tonnes now, the government said on Tuesday.
On Wednesday, Iwatani's shares hit an all-time high of 7,800
yen per share before closing at 7,658 yen, or 7.1% higher, also
a historic high, Refinitiv Eikon data showed, versus Japan's
Nikkei share average index .N225 which was 1.82% down.
"We'd expect Iwatani to benefit from Japan's revised
hydrogen roadmap; using subsidies to lower the price of hydrogen
to match costs of fossil fuels," Jefferies analysts said in a
note on Wednesday.
They raised Iwatani's target price by 19% to 9,500 yen per
share from 8,000 yen previously and reiterated their buy rating.
The supply chain plan unveiled by the government should
start yielding commercial production by around 2030, Jefferies
said, and increased supplies should lower the hydrogen price
from 100 yen per cubic meter now to 30 yen in 2030 and 20 yen in
2050.
"The government will consider subsidising the difference so
that the selling price can be kept to the same level as existing
fuels such as liquefied natural gas and coal," the note said.
Iwatani did not immediately reply to a Reuters request for a
comment.
($1 = 139.4800 yen)
(Reporting by Katya Golubkova; editing by Barbara Lewis)
((ekaterina.golubkova@thomsonreuters.com;))