Metacon enters strategic collaboration with Siemens to support its factory project

On Tuesday, May 7th, Metacon announced that it has signed a Memorandum of Understanding (MoU) to partner with Siemens in manufacturing systems for green hydrogen production. In our view, the collaboration is a concrete step towards establishing the supply chain and capabilities for Metacon’s European Gigafactory, and Siemens seems like a strong partner for this purpose. While securing funding for the project remains a key short-term uncertainty, adding more credible partners (in addition to PERIC) to the project should support the company in its future funding negotiations. If successful, the Gigafactory should help Metacon reach a larger commercial scale and could be one key driver for the investment case, but we note that the project is still in its early stages.

Joint MoU helps Metacon keep its Gigafactory project on track

In early 2024, Metacon announced an exclusive license agreement with PERIC, granting Metacon the rights to produce its own electrolysis systems. These electrolyzers will be branded and marketed under Metacon's name but utilize PERIC’s technology. Initially, PERIC will supply key components, such as electrolysis modules (stacks), while Metacon will assemble the electrolyzers and make necessary adaptations to comply with European standards. With this exclusive license, Metacon aims to establish itself as a leading provider of large-scale hydrogen plants in Europe.

The recent MoU between Metacon and Siemens marks a concrete advancement in building the supply chain for Metacon's European factory. According to the announcement, Siemens will become a technology partner to Metacon and contribute with know-how, as well as a wide range of digital services during both the manufacturing and operational phases of hydrogen plants.

Gigafactory project plans start to take shape

In our opinion, the recently announced MoU is a concrete step in the right direction of the strategy towards becoming a company that manufactures and sells large industrial hydrogen systems. Furthermore, we believe that a credible partner like Siemens could potentially support future sales. However, while the recent MoU supports the foundations for our estimates it does not put immediate pressure on estimate changes. Our current estimates already assume that the project progresses and that Metacon will deliver their first own electrolyzers in 2025 with capacity increasing in 2026 and 2027.

While we view the collaboration with Siemens as a positive development the plans still need a funding solution before implementation. Metacon has previously indicated that it is exploring various financing options for the new factory, including national and EU support programs and other financing sources. We regard the terms of this funding as a key short-term driver for Metacon’s investment outlook.

In the larger context, Metacon’s investment story still relies on building a large-scale business that can reduce the share’s risk profile by improving visibility into growth and achieving positive cash flows. In concrete terms, this entails e.g., demonstrating sustained order intake and consistent conversion of orders into deliveries.