HydrogenOne Capital Growth – Sky is the limit for HGEN

It appears that a disconnect has arisen between HydrogenOne Capital Growth (HGEN)’s NAV, current and (according to its managers) prospective track record, and its share price. The discount is now 44%, despite a flat NAV.

The recent spike in bond yields seems to have impacted on renewable energy funds. It may be that higher rates have increased concerns around the availability and cost of financing. In addition, there is added competition for investors’ capital from money market funds, which are now providing steady returns without the same credit and duration risks as renewables.

HGEN saw revenue growth of 170% year-on-year across its portfolio of green hydrogen investments, which the managers feel helps to vindicate the investment case. If their predictions for the potential of the green hydrogen industry hold true, HGEN should benefit. For the long-term investor, the current discount may provide an attractive entry point.