Ballard Power Systems (TSX: BLDP)(NASDAQ: BLDP) engages in the design and service of proton exchange membrane fuel cell products globally. The company offers heavy duty modules, fuel cell stacks, backup power systems, and material handling products.
Ballard Power provides technology solutions comprising engineering and technology transfer services, and sells intellectual property portfolio for various fuel cell applications. The company’s products are applied to transit bus, rail, material handling, truck, marine, and infrastructure applications. Ballard Power was founded in 1979 and is headquartered in Burnaby, Canada.
Currently, Ballard Power is loss-making with a negative price to earnings ratio, price to book ratio of 16.01, and market capitalization of 8.14 billion. The company does not pay a dividend and uses debt sparingly, as is evidenced by a debt to equity ratio of just 0.03. It operates with an operating margin of (29.52)% and a return on equity of (12.92)%.
The company’s primary business model is the design, development, manufacture, sale and service of fuel cell products for a variety of applications. Ballard Power is focused on power products, portable power and backup power.
A fuel cell is an environmentally clean electrochemical device that combines hydrogen fuel with oxygen (from the air) to produce electricity. Ballard’s fuel cell products feature high fuel efficiency and compact size that facilitates a quick response to changes in electrical demand and modular design.
Ballard Power utilizes proprietary technology in key areas of fuel cell stack design, operation, production processes and system integration. The company builds value for shareholders by developing zero-emission fuel cell technology products and services to exceed the needs of industrial customers.
Recently, the company has focused on building and commercializing proton exchange membrane (PEM) fuel cell business for a variety of mobility and stationary power applications. This has immense future potential for the company. In power product sales, the company focuses on meeting the power needs of customers using PEM fuel cell products. Through technology solutions, the company focuses on enabling customers to solve technical and business challenges by adopting fuel cell technology.
Since 2015, Ballard Power has increased efforts on growing business in China. China represents a huge opportunity for zero and low emission motive solutions. The company has developed a local fuel cell supply chain to address the new energy bus and commercial vehicle markets in China. This strategy aligns with current and expected local content requirements for government subsidies supporting the adoption of fuel cell electric vehicles.
Ballard Power has adopted a business model to mitigate market adoption risk and capital investment by forming partnerships with well positioned local companies. The company has been pursuing technology transfer and licensing opportunities with Chinese partners to localize the manufacture of Ballard-designed fuel cell modules and fuel cell stacks for heavy-duty motive applications in China.
Ballard Power’s business model is also structured to protect the company’s core intellectual property. The company conducts research and development of high value technology component in Canada rather than outsource it. The company is making significant investments in next-generation products and advanced manufacturing technologies. This should greatly benefit long-term shareholders.
