Why Shares In AFC Energy plc Jumped Today

AFC Energy plc (LON: AFC) signs first agreement in potentially lucrative South Korean market.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 14 July, 2014 11:52 am BST

| More on: AFC

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Shares of AFC Energy increased by more than 10% in early trade, after the fuel cell technology company signed a Memorandum of Understanding (MOU) with South Korean hydrogen supplier Chang Shin to use its excess hydrogen for power generation.

The MOU, for multiple fuel cell systems with a capacity of up to 5MW, is AFC’s first commercial agreement in South Korea. AFC called South Korea “one of the world’s fastest growing markets” for fuel cell power generating systems.

The deal will be structured as an energy supply contract, under which it will install and operate its low-cost fuel cell systems at Chang Shin’s sites in return for long term fees. The two companies will work on finalising a definitive contract within six months of the MOU.

Chang Shin has an abundance of hydrogen available capable of generating in excess of 5MW of saleable clean energy.

Ian Williamson, the chief executive of AFC Energy, said: “We look forward to working with Chang Shin and expect to clinch further new business in this market in the near future.”

South Korea is one of AFC’s key target markets, where excess hydrogen is produced as a byproduct of its large chemicals industry. Industry and utilities are adopting fuel cells to reduce reliance on imported fossil fuels.