January 27th, 2022 | 11:41 CET
Aurubis, Nevada Copper, Daimler - Copper: Fueling the mobility and climate shift
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Aurubis - Europe's leading copper producer under full steam
The Hamburg-based Aurubis Group recently presented very positive quarterly figures. Operating earnings before taxes almost doubled compared to the same quarter of the previous year to a whopping EUR 152 million. Not only did Europe's leading copper producers benefit from the sharp increase in the price of copper compared to the previous year, but also the sale of sulfuric acid produced during copper production and sales of the industrial metals nickel, zinc, and tin could be expanded - with a simultaneous increase in the recycling rate.
For the metal tin, European market leadership in recycling was achieved. Aurubis has been the world market leader in copper recycling for some time. This brilliant development prompted the Group, which is otherwise known for its somewhat conservative estimates, to significantly increase its annual forecast: instead of EUR 320 million to EUR 380 million, operating earnings before taxes for fiscal year 2021/2022, which ends on September 30, should now be in a corridor of EUR 400 million to EUR 500 million.
The analysts at DZ Bank were enthusiastic about the outlook and raised their price target to EUR 116 combined with a buy recommendation. Although their colleagues at Baader and Warburg were somewhat more cautious, the share price rose above the EUR 100 threshold before the price consolidated at a high level after profit-taking.
Nevada Copper - Now things can move forward again
Canadian mining company Nevada Copper, which has one of the few copper mines ready for production in the territory of the United States, seems to be slowly entering calmer waters. After a series of delays, multiple changes of management personnel and a pressing debt problem, Randy Buffington, who has been at the helm as CEO since October, was able to announce an important success. The debt restructuring negotiated with major shareholder Pala Investments Ltd, which included an exercise of warrants to buy 15 million shares, was approved by an extraordinary general meeting with a majority of nearly 99%.
As a result, the Company's chances are increasing to achieve its ambitious targets for the first quarter of the new year. The acceleration of development rates is to continue. To achieve this, the Pumpkin Hollow underground mine, already partly in production and for which an annual production capacity of at least 77 million tons of copper has been forecast, will be expanded by a further adit (Sugar Cube). An open-pit mine will also be established directly nearby, which has already been approved.
Stability is provided to the Company by two new anchor investors, who joined the Company in the last financing round of around CAD 114 million: "Solway" and "Mercuria". Both have secured a larger piece of the pie with their investments of CAD 30 million each. The shares of the Company, which are valued at CAD 448 million, should now have found a bottom.
Daimler - In the fast lane despite falling sales figures
Many observers rub their eyes in amazement when they look at the chart of the Daimler share and try to reconcile it with the sales and registration statistics. Although the number of cars sold continues to shrink, the Swabian Company's stock has been on a steady upward trend since the hard Corona crash two years ago. Since March 2020, the share's value has quadrupled, and renowned analysts continue to give the stock a price potential of more than 30%.
There are two reasons for this: 1. the clear focus on the premium aspirations of the Mercedes-Benz brand and 2. the uncompromising strategy for the electrification of the vehicle fleet. While other manufacturers are trying to succeed in the mass market through sales growth, the Stuttgart-based company, under the leadership of Ola Källenius, has turned to its old strengths: Building and selling luxury cars with a luxury feel. In recent years the manufacturer had become less and less distinguishable from other German brands such as Audi, BMW or even VW, which also poached in the lower price segment, today the focus is on a young, dynamic and luxurious-looking brand image.
The recently announced discontinuation of the popular E-Class station wagon (Estate), for example, fits in with this. In addition, this luxury claim is consistently paired with the will for electrification. The result can be found, for example, in the popular, all-electric Mercedes EQS or the recently unveiled EQXX concept car. Consequently, Mercedes plans to completely phase out combustion technology within less than ten years.
All that glitters is not gold. Sometimes it is copper. And the future belongs to copper. Anyone who backs copper should benefit from the boom in the long term. No matter whether you start with the end product car - here the Daimler share with a single-digit P/E ratio offers itself - or want to profit from the increasingly important recycling of metals with Aurubis. At the top of the list of favorites are copper producers. Following important decisions, the reduced price level of the Nevada Copper share offers a good opportunity.
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.
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