viewCeres Power Holdings PLC

Ceres Power eyes expansion as fuel cell system gains traction


  • Unique and cost-effective technology
  • Blue-chip partners including Bosch, Nissan and Honda
  • Revenue-generating business 
double decker bus

Quick facts: Ceres Power Holdings PLC

Price: 345 GBX

Market: LSE
Market Cap: £576.41 m

What it does  

Ceres’ core SteelCell technology overcomes two problems traditionally associated with other solid oxide fuel cells: cost and lack of robustness. SteelCell can use a variety of fuels - natural gas, hydrogen, biofuel - that can be manufactured from widely available materials, making it the most cost-effective solution on the market. “This scalability is Ceres’s key competitive advantage, in our view,” broker Berenberg said recently.

Progress to date

It has an impressive roster of partners. Key among them are Chinese engines giant Weichai Power, German engineering firm Bosch, US engine maker Cummins and Japanese carmakers Nissan and Honda. 

Japanese boiler group Miura and Korean fuel cell specialist Doosan are also working on projects with Ceres.

For the full year to June, revenues jumped 142% to £15.3mln, the fourth year running Ceres has more than doubled its turnover. 

Losses dropped to £7.9mln from £11.9mln.

What the boss says: Phil Caldwell, chief executive 

"We now have license agreements in place with four of the world's largest engineering and power companies. 

“Bosch and Weichai have chosen not only to partner with us but have invested in significant equity stakes, aligning them to the future success of our business and ensuring that Ceres is well-capitalised to deliver against its strategy.

Inflexion points

  • In February, Ceres appointed former Vodafone Group plc (LON:VOD) executive, Warren Finegold as an independent non-executive director

  • In January, Bosch increased its stake in the company to around 18% from 4% following a share subscription, netting Ceres £38mln

  • In November, Ceres announced the development of its first zero-emission combined heat and power (CHP) system, designed exclusively for use with hydrogen fuel

  • In July, Ceres signed a collaboration agreement with South Korean conglomerate Doosan to develop a solid oxide fuel cell power system for the commercial building market

  •  In June, the firm launched the first fuel cell system using its technology into the Japanese market as part of a partnership with boiler maker Miura

What the brokers say  


In early March, Ceres had its target price hiked to 540p from 300p by analysts at Liberum as the broker said the company’s fuel cell technology could be a ‘game changer’ for electrolysis power generation.

The broker, which rates Ceres at ‘buy’, said the AIM-listed firm’s plans to develop an electrolysis cell capability “make a lot of sense” as it was an area where “durable, low cost and high efficiency cells offer key advantages”.

“Only two private companies, Sunfire (Germany) and Haldor Topsor (Baillie Gifford) are active currently and neither has Ceres Generation 3 technology which in fuel cells contributes to greater stack durability and strength and a lower materials bill. Currently [solid oxide electrolysers] are relatively high cost and have poor reliability so Ceres technology could be a game changer”, Peel Hunt said.

Analysts also highlighted that the firm had “strong commercial backing” for its fuel cell technology and predicted that it will “have over £100mln net cash by year end” thanks to investments from strategic investors including Chinese bus maker Weichai and German engineering giant Bosch.

“The fact that Ceres has two license partners now as major strategic investors does not guarantee commercial success but suggests strong commercial backing”, Liberum said.


Meanwhile, in February analysts at Berenberg said “we are confident the company is still only at the start of its multi-year journey” as it raised its target price for the shares to 470p from 290p.

Berenberg’s analysts made the chunky valuation upgrade after taking a closer look at Ceres' progress to date, while factoring in upcoming commercial landmarks.

They pointed out that Ceres is now the market leader in solid-oxide fuel cells. “While investment has been widespread across proton-exchange membrane fuel cell suppliers, global OEMs [manufacturers] are partnering solely with Ceres in the solid-oxide fuel cell space,” the analysts said.

In taking a closer look at the Ceres story, the Berenberg analysts estimate the company could feasibly increase its sales forty-fold – and likened it to another UK technology pioneer, ARM Holdings.

“Based on Ceres’s potential market penetration and royalty streams, we have modelled scenarios under which the company could generate £800mln of sales per annum in the next 15-20 years At scale, Ceres should generate 40-50% operating margins, akin to ARM Holding,” the analysts said.

Executive Interview

Blue Sky 

According to Ceres: "The UK Government is the first G20 country to legislate towards meeting a net-zero emissions target by 2050, and the EU is debating doing something similar.

"In Japan, there are now more than 300,000 ENE-Farm domestic energy units installed, heated and powered by fuel cells and, at next year's Tokyo Olympics, there will be a fleet of 100 fuel-cell-powered buses to transport spectators.

"The Korean Government has announced a target of 15GW of stationary fuel cell capacity by 2040, and to put 80,000 hydrogen fuel cell electric vehicles (FCEVs) on its roads within the next three years.

"China, with its targets to reduce emissions and to counter considerable issues over air pollution in their cities, also has an active programme for new electric vehicles, including buses."


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Deal with Doosan opens up huge Korean market for Ceres says CEO Caldwell

Fuel cell specialist Ceres Power PLC’s (LON:CWR) partnership with Doosan fulfils a key priority of breaking into the Korean market, chief executive Phil Caldwell told Proactive. The deal is the latest in a string of collaborations with household name engineers. Doosan is one the...

on 17/7/19

5 min read