November 1st, 2021 | 12:30 CET
BASF, dynaCERT, Nikola - These shares will be exciting
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"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
dynaCERT - Breakthrough with delay
The topic, which dynaCERT has been researching and working on for 17 years and has gobbled up some EUR 50 million, fits right in today and may be a key to fulfilling the Paris climate agreement of December 12, 2015. The Canadians, who secured their Carbon Emission Reduction Technology, or CERT, with 5 patent families worldwide, focus on reducing emissions and improving fuel efficiency. The resulting HydraGEN product is used in internal combustion engines, primarily still in heavy vehicles. Here, the electrolysis unit produces water and oxygen, optimizing fuel combustion, resulting in both a reduction in fuel consumption and, more importantly, a drastic reduction in emissions of up to 19%.
There are other extreme advantages of the HydraGEN technology. While both politicians and automakers' lobbies are working towards the disappearance of fossil fuel vehicles in the medium term and accelerating the production of electric cars or hydrogen-powered units, dynaCERT's technology can be retrofitted in existing vehicles to reduce emissions immediately. The cost to the end-user is less than EUR 7,000, a sum that the fuel savings can amortize for any fleet operator within a year.
However, despite the outstanding technology and the achievement of several milestones, such as successfully passing the certification process of CO2 savings by Verra, the administrator of the world's largest greenhouse gas program, which will give dynCERT access to the multi-billion market of voluntary CO certificates, the stock has only known the way south in recent months and is currently trading close to the 2019 low at EUR 0.15. A significant reason for the underperformance is certainly to be found in the Corona pandemic, which resulted in a disruption of the supply chain and global distribution. The result was disappointing sales of just under EUR 300,000, too little for the ambitious management.
Yet the potential of the HydraGEN product line, with 100 million vehicles worldwide, is enormous. dynaCERT has prepared for the onslaught by building up a total of 47 qualified representatives and dealers operating in over 38 countries worldwide. The breakthrough should be a matter of time. Investor legend Eric Sprott takes a similar view. He invested a total of CAD 14,000,000 back in the spring of 2020 and has since held around 10% of the Company.
Nikola - Step by step
Nikola, the supplier of trucks with alternative drives, also fell far short of its targets. After the negative headlines about deceptions and fraud allegations against the founder and resigned ex-CEO Trevor Milton, the new management tries to pull the rudder back in the right direction by operationally positive headlines.
Following the joint production plant opening for battery electric and fuel cell trucks with IVECO in Ulm, Germany, order books are filling up, albeit slowly. Tri-Eagle Sales, a leading beverage wholesaler in Florida, has agreed to lease 10 Nikola Tre BEVs from Ring Power Corporation, a member of Nikola's sales and service network. Under this fleet leasing model, Ring Power will provide the sales, repairs, maintenance and power infrastructure necessary to operate the Nikola Tre BEV vehicles throughout the lease term.
From a chart perspective, the truck builder continues to work towards successfully completing its bottoming phase. A breakout above the line at USD 12.50 would generate a buy signal and price target up to around USD 20.00.
BASF - Diverse opinions
Analysts found no unanimous consensus after the publication of the third-quarter figures for chemical group BASF. At EUR 19.7 billion, revenues exceeded the figure for the prior-year quarter by EUR 5.9 billion. It was due to higher prices, particularly in the Chemicals, Surface Technologies and Materials divisions. EBIT before special items grew by 221% to EUR 1.865 billion, exceeding analysts' forecast expectations. By contrast, a profit of EUR 1.253 billion was just below consensus estimates.
While the experts at Deutsche Bank continue to see the share as a buy candidate with a price target of EUR 92, Goldman Sachs downgrades the Ludwigshafen-based Company to "neutral" and lowered the price target from EUR 80 to EUR 73. The Hamburg-based private bank Berenberg also lowered its targets from EUR 72 to EUR 70, with a "hold" rating.
The eyes of the world will be on Glasgow over the next two weeks. The climate conference will be about further steps to reduce emissions. dynaCERT is well ahead with its technology and should manage the roll-out in the next few months. Like BASF, Nikola is on the right track.
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