The Powerhouse Energy Group PLC (LON: PHE) share price surged 8.05% after its partner, Hydrogen Utopia International (HUI), revealed that it had signed a letter of intent with Mitsubishi Heavy Industries to bring PHE’s DMG technology to Japan.
Investors cheered the agreement, which could lead to the installation of Powerhouse’s proprietary DMG® technology at Japanese sites in the future if a real deal is signed between the HUI and Mitsubishi.
However, PHE shares had given up most of their gains at writing since a binding agreement is yet to be signed, which means the deal could fall through with time.
Still, if a real deal materialises, Powerhouse Energy could profit significantly given that the firm is entitled to a £500,000 annual license fee from each commissioned project based on its deal with HUI.
Today’s announcement marks a small win for PHE, given the rising competition within the waste-gasification industry.
Aleksandra Binkowska, HUI’s CEO, commented: “Mitsubishi Heavy Industries has led the development of environmentally friendly technology in Japan for the last 40 years, helping to move towards a carbon-neutral world. We are privileged and honoured to have entered into this agreement with Mitsubishi, which we are very hopeful will lead to a roll-out of HUI facilities across Japan.”
Today’s announcement is a positive milestone for PHE whose shares fell over 51% in the past year and are down 8.41% since the year started. However, the firm could still end the year on a positive note if it secures more deals and commissions multiple projects this year.
PHE shares may look attractive to long-term investors in the waste-gasification industry given last year’s significant decline. However, there are no guarantees that the shares will end the year higher.
*This is not investment advice. Always do your due diligence before making investment decisions.
Powerhouse Energy share price.
Powerhouse Energy shares surged 8.05% to trade at 4.16p, rising from Monday’s closing price of 3.85p.
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