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Ballard Signs a $2.5M Deal, Extends Business with Synergy

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Clean energy product supplier Ballard Power Systems (BLDP - Free Report) announced that it has signed a definitive agreement, worth $2.5 million, with Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd. (‘Synergy’).

Details of Technology Solution Agreement

Per the technology solutions agreement, Synergy will have the exclusive right to manufacture and sell Ballard's 1.7 and 5 kilowatt direct hydrogen FCgen®-H2PM fuel cell backup power systems in China.

In addition, Synergy will make additional recurring payments to Ballard for each unit sold, subject to annual minimums. Per this deal, Ballard will also be the exclusive supplier of air-cooled fuel cell stacks to Synergy for use in the FCgen®-H2PM systems that it produces and sells.

Ballard’s Prior Business Ties with Synergy

Ballard’s current agreement with Synergy is an extension of a prior business relationship between the two. The deal includes licensing and equipment supply agreements for fuel cell power modules, parts kits and stacks for buses in China. In 2015, Ballard had signed an agreement with Synergy to support the deployment of 300 fuel cell buses in the cities of Foshan and Yunfu.

Recent News at Ballard

In May 2016, the company sold a certain portion of its methanol Telecom Backup Power business assets to Chung-Hsin Electric & Machinery Manufacturing Corporation, a major Taiwanese power equipment company, for $6.1 million.

In June, the company announced that its subsidiary, Protonex, has received a $5.8 million purchase order for the supply of Squad Power Manager (SPM-622) Special Operations Kits for end customer U.S. Special Operations Command.

Our View

Fuel cell technology has a huge untapped potential to provide clean energy solution and lower emission levels. However, this technology is yet to be accepted on a large scale to actually make a difference.

Zacks Rank

Ballard Power Systems currently has a Zacks Rank #2 (Buy). Other well-ranked stocks in the same space are OSI Systems, Inc. (OSIS - Free Report) , Maxwell Technologies, Inc. and RadiSys Corporation . OSI Systems sports a Zacks Rank #1 (Strong buy), while Maxwell Technologies, Inc. and RadiSys Corporation share the same Zacks rank as Ballard Power.

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