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January 3rd, 2024 | 07:20 CET

100% share price increase in a few days! Plug Power, BYD and Defense Metals shares

  • Mining
  • RareEarths
  • Electromobility
Photo credits: Tesla Inc.

Within just a few days, the Defense Metals share price more than doubled shortly before Christmas. Even if the price level of the developer of a rare earths project in Canada could not be fully maintained, the share is entering 2024 with new momentum. Important data is due soon. If these are also positive, the current valuation of around CAD 50 million could be a real bargain. Plug Power is not a bargain despite the massive drop in the share price. The hydrogen specialist needs to grow and accelerate its path to break even. The e-commerce giant Amazon should help with this. BYD can only dream of doing big business in the US so far. The market is closed to Chinese e-car manufacturers. Is it justified?

time to read: 4 minutes | Author: Fabian Lorenz
ISIN: PLUG POWER INC. DL-_01 | US72919P2020 , BYD CO. LTD H YC 1 | CNE100000296 , DEFENSE METALS CORP. | CA2446331035

Table of contents:


    Terry Lynch, CEO, Power Nickel
    "[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel

    Full interview

     

    Defense Metals: Doubler gives a foretaste of 2024

    The Defense Metals share ended 2023 with a lot of momentum. Shortly before Christmas, the share doubled within a few days to over EUR 0.17. Although the level could not be fully maintained, and the Defense Metals share ended the year at EUR 0.155 on the Frankfurt Stock Exchange, it shows the potential momentum. This means that 2024 should be at least as successful in operational terms and hopefully better in terms of the share price. The Canadians are making great strides in the development of their Wicheeda rare earths project, which, at around CAD 50 million, is anything but highly valued. The project is located in the Canadian province of British Columbia and is therefore of strategic importance to Western industrialized countries.

    Considering the existing resource estimate and the continuous progress in development, the valuation should not remain at this level for much longer. Currently, over 6.4 million tons of measured mineral resources with an average total rare earth oxide (TREO1) grade of 2.86% are reported for Wicheeda. The Indicated and Inferred Mineral Resources are 27.8 million tons with an average TREO of 1.84%.

    The field is set for an operationally and price-wise successful year 2024: Between Christmas and New Year's Eve 2023, Defense Metals announced that the collection of all geotechnical field data for the preliminary feasibility study (PFS) of the rare earth project had been completed. CEO Craig Taylor: "*We are very pleased to have completed our 2023 Phase 3 geotechnical program. I would like to thank the APEX and SRK teams for the safe and professional execution of this work. These multi-phase programs were initiated in early summer, and *we now have all the geotechnical field data in place to complete our PFS study, which we expect to complete in the second quarter of 2024."** Infrastructure geotechnical programs implemented in 2023 included 16 sonic drill holes for a total of 225.5 meters, 20 test trenches for a total of 76.8 meters and 6 diamond drill holes for 1,182 meters. From these, 2,700 kg metallurgical samples and 250 kg samples for kinetic leaching tests were submitted for analysis.

    Amazon relies on plug power

    After a disastrous year, there was some positive news for Plug Power just before New Year's Eve. The hydrogen specialist is making progress in its collaboration with Amazon. Plug Power has completed and commissioned an electrolyser with a capacity of one megawatt at one of the e-commerce giant's fulfillment centers in the US state of Colorado. This electrolyser system from Plug Power is the first at Amazon and will supply hydrogen to the fuel cells of up to 400 forklifts in the fulfillment facility. In the future, Plug Power will also take over the maintenance of the electrolyser and the hydrogen storage system. This will intensify the cooperation between the two companies. Plug Power has already replaced forklift batteries with 17,000 hydrogen fuel cells in more than 80 Amazon fulfillment centers in North America.

    The news is not enough to cause a sustained reversal in the share price trend. The hydrogen pioneer's problems are too far-reaching for that. The US company must take significant steps towards profitability this year and close the financing gap by the time it reaches break-even.

    BYD: Soon in the USA?

    Market leadership in the electric vehicle segment has turned into a duel in 2023. Tesla and BYD are fighting for the crown. The Chinese are increasingly catching up and may have already overtaken Elon Musk's company. At least Wang Chuanfu has expressed his optimism, according to a report by the news service "Bloomberg". The founder and CEO of BYD expects his company to have knocked Tesla off the e-car throne by the fourth quarter of 2023. The coming weeks will show whether this is true.

    Tesla bull Ross Gerber and Tesla bear Gordon Johnson discussed the prospects in the e-car market and the rivalry between the two companies in the "Last Call" program on the US television channel CNBC. Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, believes that BYD and Tesla are not a threat to each other. Rather, they have common enemies with companies from the combustion engine world, such as Ford, Volkswagen and BMW. He would, therefore, have no problem with BYD being admitted to the US car market. Gerber does not believe that US consumers would buy Chinese e-cars.

    GLJ Research CEO Johnson disagreed with this. Due to the unreliability and lack of safety, more and more buyers are already turning away from Tesla anyway. However, this is not the only reason why he is against Chinese e-car manufacturers such as BYD being licensed in the USA. He argues they would have access to cheap labor and energy in China. Therefore, there would be no fair, competitive conditions. Incidentally, the competitive conditions are also currently being analyzed by the EU. A corresponding anti-subsidy investigation into the import of electric cars from China was initiated last fall.


    The stock market year 2024 promises to be another exciting one. Will BYD knock Tesla off its electric throne, and can the Chinese company's shares finally take off? Or will oversupply and the price war in the domestic market put the brakes on BYD's growth? Plug Power is condemned to growth. And the Group must also reduce its losses. Otherwise, the current valuation of almost USD 3 billion cannot be justified. On the other hand, the valuation of Defense Metals seems to have plenty of room for improvement. The share price should rise at the latest with a positive preliminary feasibility study in the second quarter. Often, this happens even before the official release. Interested investors should not miss the opportunity to enter or at least consider buying an initial position early on.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author



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