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Ceres Power surges as it inks £8mln agreement with South Korean conglomerate Doosan

Doosan is one of the world’s largest fuel cell developers, having secured over £676mln in orders last year

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South Korea is a core market for Ceres due to its leading position in the fuel cell industry

Ceres Power Holdings PLC (LON:CWR) shares surged on Monday after it signed a collaboration agreement with South Korean conglomerate Doosan that will earn it £8mln over two years.

The fuel cell developer said the agreement was for the two firms to develop a solid oxide fuel cell power system for the commercial building market, with Ceres providing licencing, technology transfer and engineering services to Doosan.

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

South Korea has been a core target market for Ceres due to its leading position in the fuel cell industry, with the company saying the Asian country had a “supportive regulatory regime” and a number of government initiatives to promote increased use of renewable energy and hydrogen technology.

Doosan, meanwhile, is one of the world’s largest fuel cell developers, having secured over £676mln in orders last year.

Ceres added that the two firms would also explore an expansion of their collaboration to access more opportunities in both the South Korean and international markets, as well as the potential to include manufacturing capabilities.

Phil Caldwell, chief executive of Ceres, said Doosan was an “ideal partner” for the company to enter into the South Korean market and had clearly established themselves as a “leader” in the sector.

The agreement with Doosan follows previous deals with state-backed Chinese firm Weichai Power and German electricals firm Bosche.

In a note, analysts at ‘house’ broker Liberum said the deal provided “further validation” that Ceres’ technology was technically ready while also broadening its market reach.

Liberum current rates Ceres at a ‘buy’ with a 300p target price.

In early trading, Ceres shares were 6.5% higher at 186.8p.

Quick facts: Ceres Power Holdings PLC

Price: 238 GBX

LSE:CWR
Market: LSE
Market Cap: £366.22 m
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