Ceres Power Holdings (LON:CWR) has signed a Joint Development Licence Agreement with a leading global OEM for a multi-kW combined heat and power (CHP) product based on its Steel Cell technology. This is significant as it is the first deal where, subject to successful field trials, the partner has a planned intent to launch. It is also the first partnership targeting the commercial CHP market. The announcement underpins our estimates, which we leave unchanged.
Under the terms of the contract (announced 19 December), which covers a multi-year period, Ceres will receive stage payments during the joint development and field trial phases. On reaching the commercialisation phase, which is after our forecast period, Ceres will generate revenues from royalty payments and the supply of Steel Cell stacks. The agreement is the fourth partnership signed with a global OEM in a year (the others are with Cummins (NYSE:CMI), Honda and Nissan). It supports our estimates which show the level of customer engagement intensifying throughout the forecast period.
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