After thyssenkrupp, Ballard Power's share price is now exploding! Is First Phosphate next?

First Phosphate: Revenues could significantly exceed investments

Something big is currently happening at First Phosphate. Last week, the Canadian phosphate company provided a detailed update on developments in 2024 and an outlook for 2025. The issue of possible US tariffs was also addressed. The message: This plays a minor role in the development of First Phosphate. The Company's goal is to build the production and purification of phosphate for the production of active cathode material for the lithium iron phosphate (LFP) battery industry. The plan is to vertically integrate directly from the mine into the supply chains of major North American LFP battery manufacturers. To this end, First Phosphate is developing the Bégin-Lamarche project in Saguenay-Lac-St-Jean, Quebec, Canada. This project consists of rare anorthosite igneous phosphate rock, which generally contains high-purity phosphate material.

The Company is finalizing its internal pre-feasibility analysis and is preparing to launch its formal feasibility study. Currently, the capital costs (CAPEX) for the construction of the mine are estimated at USD 459 million. The investment should pay off. The annual pre-tax income from the mining operation is expected to reach up to USD 362 million (internal rate of return 37.1%) – over a period of 23 years. In December, long-term agreements were already concluded with a customer that would not be affected by the current situation regarding US trade tariffs.

In December 2024, First Phosphate also signed license and technical service contracts in connection with a plant for the production of phosphoric acid with a capacity of 190,000 tons per year. Here, too, the CAPEX estimates and internal pre-feasibility study are convincing: With the estimated investment costs of USD 175 million for the construction of the plant, the produced apatite concentrates could generate annual revenues of CAD 284 million. Here, too, there are firm offtake agreements in place that are not to be affected by the US tariffs.

Then, there is the planned iron phosphate plant in La Baie (Quebec), First Saguenay. The feasibility study has been fully completed by Ultion Technologies Inc. Subject to financing, the production of an iron phosphate feedstock is expected to begin in 2026 and expand to a capacity of 11,882 tons per year by 2028. Here, the financing costs are estimated at USD 76 million, and the annual revenues are projected to reach up to USD 53 million. Overall, the update shows that First Phosphate could recoup its investment costs across the entire value chain within a few years. Therefore, the decline in the share price – also traded on the Frankfurt Stock Exchange – from CAD 0.40 to CAD 0.27 seems to offer an exciting entry opportunity. This also appears to be the view of the management. Since the beginning of the year, the management team has bought shares worth over CAD 320,000.

Ballard Power: Major order causes share price to jump

Ballard Power Systems has received a major order from Egypt. The agreement with Manufacturing Commercial Vehicles (MCV) calls for the delivery of fuel cell engines with a total output of around 5 MW. The 50 engines are expected to be delivered between 2025 and 2026 and will initially support projects in the European Union. MCV is an internationally active commercial vehicle manufacturer based in Egypt. Ballard and MCV have been working together since 2022. The first fuel cell engines were delivered in 2023.

"In 2024, we received 1,600 orders for bus engines from 7 OEMs, and this agreement continues the momentum into 2025," said Oben Uluc, Ballard's Vice President for Europe Sales & Marketing. "As the fuel cell bus market continues to mature, we look forward to using Ballard fuel cell engines to decarbonize public transit worldwide." Ballard manufactures zero-emission fuel cells for buses, trucks, trains, ships, and stationary applications.

On Tuesday, Ballard Power's shares jumped by more than 13% on the news. Nevertheless, they have lost over 30% of their value in the current year alone.

thyssenkrupp: Armaments fantasy drives stock

The winners in the current year include the thyssenkrupp stock. The security of the long-established company, which has been hit hard, has roughly doubled in the current year and is now trading again at around EUR 8. This is the highest level since 2022.

The rally was triggered by the euphoria surrounding armaments stocks. Thyssenkrupp, for example, has announced plans to spin off its naval division TKMS. The IPO of TKMS is expected to take place before the end of 2025. "We are also preparing an extraordinary general meeting for this purpose," thyssenkrupp board member Miguel López told the "Westdeutschen Allgemeinen Zeitung". However, the parent company wants to retain a majority stake in TKMS. TKMS, with its main shipyard in Kiel, focuses on the construction of submarines, but in the future, it also wants to increasingly build ships for the navy.

Lopez continued: "An IPO is not only an important step for us, but also strategically relevant for the Federal Republic of Germany with a view to possible cooperation in the European defense sector."

Analysts remain cautious with their target prices. Baader Bank recently confirmed its "Buy" recommendation and raised its target price from the original EUR 5.40 to EUR 8, which is in line with the current level. Analysts welcome the unbundling of the industrial group. They expect news on the steel division in the further course of the year.

First Phosphate is working on something big. The previous estimates of investments and revenues are convincing. The fact that the US trade tariffs are not noticeably burdening the expansion plans should provide some relief. The price decline of the past few weeks seems to be exaggerated. For Ballard Power, the new major order is unlikely to herald a genuine turnaround, as the fuel cell specialist has disappointed too often in recent years. Thyssenkrupp's stock has been one of the positive surprises of the still-young year. However, the price seems to have run hot.