July 30th, 2021 | 13:28 CEST
Aixtron, Defense Metals, Nordex - Strong growth
The global economic recovery and rising investment in more climate-friendly energy infrastructure are driving higher commodity prices amid supply chain disruptions. Shortages of industrial metals, which are urgently needed for climate change, are likely to materialize further in the coming years. The swelling trade conflict between the USA and China will exacerbate this significantly. There is a threat of massive bottlenecks in production and sharply rising prices for the respective materials.
time to read: 3 minutes
|
Author:
Stefan Feulner
ISIN:
AIXTRON SE NA O.N. | DE000A0WMPJ6 , DEFENSE METALS CORP. | CA2446331035 , NORDEX SE O.N. | DE000A0D6554
Table of contents:
Author
Stefan Feulner
The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
Tag cloud
Shares cloud
Defense Metals - Rare producer outside China
Lithium, nickel and copper are essential for producing renewable energy and batteries to power electric motors. In addition, rare earth metals, which are 17 chemical elements in the 3rd subgroup of the periodic table, play an essential role in the production of magnets for wind turbines and electric cars. In 2019, the United States imported 80% of its rare earth minerals from China, and the European Union sourced nearly 98% from the Middle Kingdom.
With the swelling trade war with China, Western industrialized nations now feel compelled to lessen their dependence. A bill to improve US competitiveness, which includes provisions to strengthen supply chains for critical minerals, was recently passed by the US Senate. Production and processing are to be significantly ramped up in cooperation with Western partners, such as Canada, to increase sustainable global supplies.
However, time is of the essence. It takes up to 10 years for a new rare earth metal project to reach production. Thus, existing deposits are in greater demand than ever. Along with Molycorp Mining's reopening of the Mountain Pass mine in California and Lynas' rare earth mine at Mt. Weld in Australia, Defense Metals' Wicheeda Rare Earth Project, covering approximately 1,708 hectares in the state of British Columbia, is considered one of the most promising ventures.
Due to the first-class infrastructure, Defense Metals can calculate drilling costs far below the industry average. According to management, mineral resources there are 4.9 million tons at an average grade of 3.02% LREO (light rare earth metals) and inferred mineral resources of 12.1 million tons at an average grade of 2.90% LREO. An additional 12 million tons are suspected in the area. Defense Metals recently secured CAD 5.0 million in the capital markets to carry out the core drilling program between 2km and 5km. Site selection and construction of the drilling platforms is expected to commence within the next few days. The purpose is to expand the area and further delineate the existing resources to prepare a feasibility study during the second half of the year.
Defense Metals' stock corrected in the wake of the capital increase already completed and is currently trading at CAD 0.16, about 50% below its high for the year. Due to the lack of rare earth metals, the share is speculative but promising in the long term.
Aixtron - Enormous demand
As expected, the Herzogenrath-based electrical engineering company, which produces equipment for compound semiconductors and nanomaterials, delivered strong half-year results. According to Aixtron CEO Felix Grawert, customer demand was very high in all relevant end markets. In particular, Aixtron's equipment for gallium nitride power electronics, for the manufacture of components for 5G network expansion and high-speed optical data transmission, is in demand. As a result, order intake increased from EUR 138 million to now EUR 263 million. Sales grew from EUR 97 million to EUR 117 million. Aixtron also more than doubled its earnings before interest and taxes to EUR 4.9 million.
Management continues to expect very dynamic revenue growth for the second half of the year, leading to forecasts of order intake between EUR 440 million and EUR 480 million and a profit margin before interest and taxes between 20% and 22%. The stock rose more than 7% to EUR 22.60 following the release of the strong figures. At EUR 23.57, a new all-time high beckons. In the long term, we continue to see rising prices.
Nordex - Analysts remain relaxed
Despite positive analyst opinions, wind turbine producer Nordex cannot free itself from the low level for the year at around EUR 16.0. Bank of America sees the stock as a potential doubling candidate within the next 12 months and assigns a price target of EUR 31. According to the experts, the Hamburg-based Company is exceptionally well-positioned in the high-growth 4-5 MW turbine segment. In addition, Nordex has a strong order intake with high demand for the Delta 4000 turbine model, which is why the US investment bank expects sales to increase by 20% year-on-year.
Jeffries also sees Nordex stock as a buy candidate and leaves the price target at EUR 25. The reason is the better capitalization of the Company after the capital increase, which puts the Hamburg company in a better position. From a chart perspective, a buy signal would be generated if the share price sustainably exceeded the broad resistance level of EUR 17.
The future belongs to renewable energies. Thus, the order backlog at wind turbine manufacturer Nordex should remain at a high level. Nordex will benefit in the long term from the improved capitalization due to the completed capital increase. Defense Metals should benefit from the scarcity of rare earth metals outside China.
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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.
Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.
The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.