HydrogenOne Capital Growth (HGEN) has published its first quarter 2025 NAV and portfolio update, while its manager has published its latest “Hydrogen Handbook” – its annual hydrogen sector review.

In its quarterly update, HGEN has reported a net asset value per share of 89.28p as at 31 March 2025, broadly unchanged from 90.39p at the end of December 2024, but down 13.8% year-on-year. Total net assets stood at £115.0m. Despite modest negative revaluations across some holdings and ongoing fund expenses, gains from currency movements and an improved discount rate helped to cushion NAV. Notably, the weighted average discount rate applied to the portfolio fell to 12.5% from 12.8% at year-end, boosting NAV by 0.2p per share.

Private portfolio sees strong revenue growth

HydrogenOne’s private portfolio companies generated aggregate revenues of £92m over the 12 months to 31 March 2025, marking a 21% increase from the prior year, with momentum driven by supply chain demand.

Several key developments were highlighted across the portfolio:

• Sunfire (28% of NAV) secured €200m in guarantee-backed financing and delivered a 10MW electrolyser for the Basque Hydrogen project in Spain.
• Elcogen (17%) was awarded a Frost & Sullivan leadership award and named one of TIME’s top green tech companies.
• HiiROC (19%) continued its UK industrial testing of thermal plasma electrolysis.
• Cranfield Aerospace (13%) progressed hydrogen-electric engine development and signed a five-year simulator supply deal.
• Strohm (12%) won a landmark 33km pipeline contract from Saudi Aramco and launched a new digital design tool.
• Bramble Energy (9%) hit a milestone in fuel cell volumetric power density and launched a new project with Taiwanese partners.

The portfolio remains fully invested in private companies in the UK and Europe. HydrogenOne also reported cash reserves of £2.3m as at 31 March 2025, down from £3.1m at the end of December.

Sector outlook improves despite macro headwinds

As noted above, HydrogenOne Capital LLP has published its latest “Hydrogen Handbook”, providing a comprehensive review of the global hydrogen market and its trajectory. The 2025 edition reflects both the resilience and rapid evolution of the clean hydrogen sector, despite macroeconomic and policy challenges that have clouded investor sentiment over the past 12 months.

The report estimates that 3 million tonnes per annum (mtpa) of green hydrogen capacity is now under construction, representing a 15-fold increase in global supply between 2024 and 2027. This surge in development is backed by more than US$60 billion in committed capital, demonstrating that institutional, corporate, and governmental support for hydrogen infrastructure remains robust even in a tougher funding environment.

According to the adviser, the sector’s long-term structural drivers remain firmly intact – anchored by the decarbonisation of industrial emissions, energy security, and the need for flexible, storable clean energy sources. The global hydrogen economy is forecast to play a central role in replacing grey hydrogen (currently a US$175bn/year industry responsible for double the UK’s annual GHG emissions) and enabling decarbonisation in sectors such as heavy transport, shipping, aviation, steelmaking, and chemical production.

In particular, the Handbook highlights growing momentum in industrial gas supply, stationary power, e-fuels, and hydrogen-powered mobility applications, including buses and forklifts. These segments are now seeing increased final investment decision (FID) activity and early-stage commercial rollouts, a sign that use-cases are maturing beyond R&D and pilots.

The report also acknowledges near-term headwinds, including:

• Geopolitical uncertainty stemming from US policy reversals on energy transition incentives and regulatory inconsistencies in Europe and the UK;
• Rising capital costs due to higher interest rates, supply chain disruptions, and inflationary pressures; and
• Volatility in investor appetite, particularly in listed hydrogen stocks.

Nonetheless, HydrogenOne’s adviser remains optimistic. While the energy transition narrative has been buffeted by macroeconomic concerns, the Handbook argues that strategic clarity and capital are continuing to coalesce around clean hydrogen as a critical pillar of future energy systems. Dr JJ Traynor, from the adviser, commented: “In our 2025 review of the industry, we have more than doubled our projections for clean hydrogen supply by 2027, despite the headwinds and sentiment around the sector. We hope our investors find the 2025 Hydrogen Handbook a useful reference document for this growing, strategic sector.”

The full report is available on the company’s website.

Strategic review underway

HydrogenOne reiterated that the board and investment adviser are actively reviewing strategic options to enhance shareholder value, with confidential discussions ongoing with third parties.

[QD comment MR: HydrogenOne’s first quarter update offers reassurance on portfolio traction despite macro and funding pressures. The stable NAV reflects resilience across its clean hydrogen holdings, while the revenue growth and sector momentum outlined in the Hydrogen Handbook suggest long-term potential. Against this backdrop, HGEN’s c 75% discount looks overdone and given the importance of the sector in decarbonisation and the structural growth opportunity it offers, it would be disappointing to see the fund disappear from the investment companies sector. The outcome of the strategic review will be closely watched. Hopefully investors will be able to look through the short-term market noise to the longer-term opportunity.]