Ballard Surges on Deal to Build Fuel Cell Factory in Chinaby
Guangdong Nation Synergy contract worth at least $168 million
Fuel cells will power electric buses in Chinese cities
Ballard Power Systems Inc., a Canadian provider of fuel cell systems, surged the most in more than 17 months after signing an agreement to build a factory in southern China with a local partner, worth at least $168 million over five years.
Ballard climbed 45 percent to $2.01 at the close in New York, the most since February 2015.
China’s Guangdong Nation Synergy Hydrogen Power Technology Co. agreed to invest in a factory in the city of Yunfu that will manufacture fell-cell stacks using Ballard’s technology, the Burnaby, British Columbia-based company said in a statement Monday. Ballard will own 10 percent of a joint venture the companies are forming, with the rest owned by its Chinese partner.
The deal shows growing interest in fuel cells, which produce electricity through a chemical reaction and have low carbon emissions. Synergy plans to use the fuel cell stacks for low-pollution buses in highly populated cities in China, the world’s biggest producer of greenhouse gases.
“This deal is transformational in terms of positioning fuel cells as a compelling solution for clean energy buses and commercial vehicles in China’s high-population cities where air quality is a top priority,” Synergy Chairman Frank Ma said in the statement.
Ballard will get $18.4 million in revenue for training and commissioning the fuel cell assembly, mostly when the factory is commissioned next year, and $150 million in sales of products through a take-or-pay contract that ends in 2021.