28. October 2021 | 13:20 CET
BASF, Memiontec, JinkoSolar: Rich returns with green shares
Chemistry is everything. It is not just since the bestseller "Chemistry for Breakfast" by scientist and YouTuber Mai Thi Nguyen-Kim that people have known how comprehensively chemistry can explain our world. There is also a lot of chemistry involved in future technology, such as filter systems for water or solar panels. We present three stocks and assess their values. We start with one of the best-known chemical stocks, followed by smaller shares with no less interesting business models.
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ISIN: BASF SE NA O.N. | DE000BASF111 , Memiontec Holdings Limited | SGXE56008290 , JINKOSOLAR ADR/4 DL-00002 | US47759T1007
BASF: Rising forecasts, dull share price
BASF started the year somewhat conservatively and kept spectacular forecasts under wraps. But the market did not trust the conservative people at BASF and sent the share significantly upward as early as last fall. By the end of the first quarter of 2021, the share had posted a return of almost 50% - and rightly so, as it turned out in retrospect. For the third time in a row, the chemical giant from Ludwigshafen raised its forecast. In 2021, BASF now expects sales of between EUR 76 billion and EUR 78 billion, with profit before special items expected to be between EUR 7.5 billion and EUR 8 billion.
BASF also continues to expect good business in basic chemicals and also plastics. Elsewhere, the Company is warning of the consequences of supply bottlenecks. These concerns are also likely to paralyze the share price at present. Despite the triple forecast increase and a now handsome dividend of around 5%, the share price is not getting off the ground. BASF has a low valuation but is still not picking up speed. The catalysts are missing here. But then the share could become an excellent stock in the long term.
Memiontec: Clean water for Asia - the insider tip
The share of Memiontec has already jumped this year. The specialist for water treatment in Asia offers complete solutions for water management. In addition to clean water, this also involves wastewater. Specifically, Memiontec operates in Singapore, China and Indonesia, covering three exciting markets. Population growth in Asia and the trend towards urbanization are placing increasing demands on drinking water. Due to Memiontec's more than 20 years of experience in the field of water treatment and also in cooperation with local authorities, the Company can benefit from the major trends in Asia.
Specifically, Memiontec earns money on the one hand from the sale of purified water and, on the other hand, through service and operating services related to water infrastructure. Since water supply contracts are usually very long-term - terms of up to 25 years are not uncommon but rather the rule - Memiontec secures regular earnings. The Memiontec share is, therefore, an exciting infrastructure investment in Asia. After the rise of the share in the summer, the value has been very stable so far. This relative strength could prepare the ground for further increases. Although Memiontec is a niche investment, the outlook in Asia around solutions for water management is promising.
JinkoSolar: Energy shortage as share price driver
JinkoSolar's solutions are also considered promising. The Company is a global leader in solar modules and scores both with its modules' performance and durability. In this position, investors also like to buy JinkoSolar. Recently, the share was the plaything of two developments in China: First, the value suffered a little from the China fear, which was rampant around interventions of the central government and also because of the difficulties of the real estate company China Evergrande. But then the energy shortage dominated the front pages: Chinese industrial companies sometimes even have to stop the assembly lines, which does not exactly help the stuttering supply chains. In response, China is looking to expand renewable energy. This news brought the share of JinkoSolar the liberation blow - on a one-month view, the value climbed by about 28%.
In the long term, however, the latest development is at best a flash in the pan - only at prices above the EUR 52.50 mark in German trading will the stock enter friendly waters again for the long term. However, the share is a good choice when it comes to investing in renewable energy. As a world-class manufacturer, JinkoSolar should be one of the big beneficiaries of climate change.
While the JinkoSolar share has already gained around 600% over three years, Memiontec has not yet experienced such a spectacular development. However, the rise in the summer of this year should have attracted the attention of investors. If the value continues to consolidate at this level, the share could soon provide renewed impetus. However, the share remains speculative. BASF, on the other hand, is a safe bet, although it currently lacks the momentum for a further increase.