Which ASX 200 stock is breaking into battery tech with $50 million?

The move continues its run into renewables.

| More on:
A golfer celebrates a good shot at the tee, indicating success.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As the S&P/ASX 200 Index (ASX: XJO) drifts almost 1% lower over the last month of trade, one ASX 200 stock is separating itself from the pack in FY25.

HMC Capital Ltd (ASX: HMC), an alternative asset manager traditionally known for its holdings in real estate and finance, has announced a strategic acquisition today.

While the announcement isn't market-sensitive, it builds on the momentum the ASX 200 stock established in FY24. As discussed in my recent analysis, HMC Capital was one of the top-performing Australian real estate investment trusts (REITs) last financial year.

Here's a closer look at the upcoming transaction's details.

ASX 200 stock pivoting to energy

HMC announced on Monday it has committed to an investment of up to $50 million over three years into StorEnergy Pty Ltd, a battery storage company.

The move extends the ASX 200 stock's recent entry into the renewable energy market. Traditionally, the company – which manages more than $12.5 billion of client assets – has expertise in real estate assets. As such, this is quite the leap sideways.

However, as part of its Energy Transition platform, HMC aims to "assemble a 15GW development portfolio across the energy value chain…"

This includes renewable energies such as wind, solar, battery, and bio-fuels, it says.

According to the ASX 200 stock, StorEnergy develops and operates "utility-scale battery energy storage systems (BESS)".

It currently holds a 1.4GW development portfolio valued at approximately $2 billion. These projects are reportedly near existing grid infrastructure, which HMC thinks could be an advantage.

The investment includes an initial tranche of an unspecified amount, with additional commitments planned over the next three years depending on various milestones.

Following the investment, the ASX 200 stock will own a majority stake in StorEnergy. It is expected to close by early July 2024.

What did management say?

Looking ahead, HMC says it is preparing a campaign to raise a potential $2 billion for its Energy Transition Platform.

Regarding this current investment, HMC's head of Energy Transition, Angela Karl, expressed optimism about the partnership with StorEnerg. Karl highlighted synergies and the asset's "potential to be scaled significantly" as part of HMC's growth plans.

CEO and managing director David Di Pilla highlighted the strategic significance of the investment, noting:

Our investment in StorEnergy represents an exciting step in the establishment of HMC Capital's Energy Transition platform, something we have both the ambition and capability to develop into the National Champion for Australia's decarbonisation.

HMC share price snapshot

HMC has started the new year in the green. The ASX 200 stock is up 0.48% at $7.29 at the time of writing and has lifted more than 50% in the past 12 months.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on REITs

forklift holding boxes next to upward trending arrow signifying share price lift
REITs

How a $10,000 investment in this ASX 200 stock ballooned to $17,460 in FY24!

Let's review what happened with this property stock last financial year.

Read more »

REIT written with images circling it and a man touching it.
REITs

Why Macquarie says go overweight on ASX REITs now!

Real Estate could be the sector to watch, the broker says.

Read more »

Graphics of houses with a person typing on a laptop.
REITs

Here are the best ASX REITS of FY24 (a $66 billion company grew the most)

These names outperformed the broader market in FY24.

Read more »

A business woman flexes her muscles overlooking a city scape below.
REITs

2 top ASX REITs to buy before yields fall alongside interest rates

I like owning REITs that have good yields and are growing rental income.

Read more »

a man with hands in pockets and a serious look on his face stares out of an office window onto a landscape of highrise office buildings in an urban landscape
REITs

The best Australian REITs to invest in this month

Analysts think these property companies are top buys.

Read more »

Real estate agent and client exploring property.
Real Estate Shares

Are ASX real estate shares building towards a better FY25?

Here’s the outlook for the ASX real estate sector.

Read more »

a man sits on a ridge high above a large city full of high rise buildings as though he is thinking, contemplating the vista below.
Dividend Investing

9 popular ASX REITs with ex-dividend dates next week

Investors are in line for some massive dividend payments from these REITs.

Read more »

A man and a woman stand on an external balcony in a dense city environment filled with high rise buildings and commercial properties. The man is pointing up at a high rise building and the woman is looking on.
REITs

Are ASX REITs a good investment right now?

Is it time to dive into property?

Read more »