Shares of AFC Energy PLC (AIM:AFC, OTC:AFGYF) climbed 6% following the announcement of a strategic partnership with Illuming Power to enhance production capabilities of fuel cell plates and stacks for the former's S Series air-cooled platform.
This deal marks Illuming Power's first venture into such a collaboration, leveraging its extensive international network to produce and deliver these essential components for AFC's H-Power generator modules.
"This agreement is aligned with AFC Energy’s strategy to outsource key segments of its manufacturing requirements to third parties as the company scales to larger production volumes of its fuel cell generators. It expects this to allow it to benefit from materially lower unit component costs and overall system costs as volumes grow," said broker Peel Hunt reiterating its 'buy' advice and 125p price target.
In late morning trading the stock was up 1.25p at 20.85p.
Investment bank Liberum said the update consolidated an existing relationship based on two years of collaborative work supporting stack design and delivery.
"Illuming’s experience in stack build, both in prototype and commercial applications with thousands of stacks currently in operation across the global hydrogen market adds further validation of their credentials in supporting AFC’s fuel cell plates and stacks," Liberum added.
It is also forecasting the fuel cells specialist will see top-line compound annual growth of 81% from 2025-2030 and expects it to break even (at the EBIT level) in 2028. Liberum values the stock at 68p.