April 19th, 2022 | 12:46 CEST
BioNTech, Almonty Industries, Steinhoff - Which share will be the first to have its lid fly off?
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
BioNTech - Product pipeline filled
With the speculation about a possible Corona endemic, the BioNTech share went into a dive. In the spring, the newspapers ran headlines about vaccine fatigue, and since then, the stock has been trending sideways. But is this justified? After all, the Mainz-based Company is likely to have many ongoing purchase agreements this year, which will continue to bring money into the Company's coffers. One should also not forget the bulging product pipeline of the biotech company. The Corona vaccine has opened the door to other mRNA application areas. One of these is cancer. The Company can easily advance the development of other pharmaceuticals with the profits from the vaccine. Will the Company make the next big splash?
In addition to the cancer drugs mentioned above, the Company is also conducting research into HIV, malaria, tuberculosis and influenza. The next blockbuster will be born if a breakthrough is achieved in one of these areas. But the Company is also working on a vaccine against the Omicron variant in anticipation of next fall and is trying to arm itself against new possible Corona variants. At the same time, the Company wants to achieve full conditional approval in Europe so that it can continue to market the active ingredient in the future. At the moment, the chance of being able to sell the vaccine in China is increasing, as Shanghai is suffering from the zero-COVID strategy. Here, the Asian partner Fosun is challenged to open the door to the Middle Kingdom.
The coronavirus will not disappear but will continue to accompany us like the flu. The potential for a successful future for the Company is there, and with a price/earnings ratio of around 4, the stock is no longer expensive either. Currently, the share is at the upper end of the sideways channel at EUR 162.85. Closing prices above EUR 170.00 would break the downward trend and initiate a test of EUR 190.00. If the breakout does not succeed, a test of the support area between EUR 111.00 and 120.00 is likely.
Almonty Industries - Additional nano tungsten oxide processing plant?
Almonty Industries is a tungsten producer focused on acquiring distressed operations and is commissioning the largest tungsten mine outside of China. The Sangdong mine in South Korea will provide the Company with between 7-10% of global tungsten supply in the future. Global demand will rise steadily between 3-7% in the coming years, outstripping supply and pushing prices higher. Last year alone, prices rose by more than 40%. But despite all this positive outlook, the stock has been running sideways since July last year. So the question is when the lid will fly off here.
The Sangdong mine is said to have a potential life of 90 years, with the lowest production costs in the world and the highest tungsten oxide content. Production is expected to begin this year. Most recently, the Company came up with two other positive announcements. In order to strengthen the supply chains in South Korea, a Memorandum of Understanding was signed jointly with the South Korean government and Hannae For T, a rare metal reprocessing specialist. Two days later, a letter of intent for an additional USD 50 million in financing for a nano tungsten oxide processing plant with KfW IPEX-Bank was announced. The plant could supply the South Korean battery anode manufacturing industry.
In addition, the Sangdong property hosts another major molybdenum deposit, which can also be economically developed. In addition, there is the producing Panasqueira mine in Portugal and two projects in Spain. One of these projects can be brought into production in the near term. The Sangdong project is fully financed, so no problems are expected from this side. As soon as the Sangdong mine starts production, the sideways phase of the Almonty share should be over. Since July, the share has traded between EUR 0.60 and EUR 0.75. If you want to invest in a rare metal like tungsten, you cannot avoid the Almonty share. Further information can be found on reasearchanalyst.com.
Steinhoff - Discontinuation of Corona measures as an opportunity
In 2021, Steinhoff focused on whether the Group would manage to reach a settlement with its creditors. After many legal maneuvers and delays, an agreement was reached. Many shareholders believed that the share would rise significantly after this news, but that was only the case for a short time. In the meantime, the share price has returned to roughly where it was before the settlement. The question is whether the Group will succeed in further reducing its liabilities. If it succeeds without diluting the existing shareholders, the way would be clear for higher prices.
Since Steinhoff generates most of its sales in over-the-counter retail, the elimination of the Corona measures could increase the willingness to buy. Especially since inflation makes everything more expensive, people prefer to spend their money now rather than later when it is likely worth even less. In addition, Steinhoff's products tend to be in the low-price range, which attracts more customers with less money. In Eastern Europe, Steinhoff's subsidiary Pepco has a strong presence. With the refugees from Ukraine, millions of new customers could be added.
But also at the US investment, Mattress Firm, things are looking much better after a cost reduction program. In the fourth quarter, the investment contributed EUR 987 million in sales to Group earnings. This increases the chances of Mattress being floated on the stock market. Such a move would certainly add value to the Group's balance sheet. The share is currently trading at EUR 0.19, between support at EUR 0.16 and resistance at EUR 0.244. However, it is important to note that the debt of around EUR 9.7 billion weighs on the share, and without a reduction, further doom threatens.
At the moment, BioNTech looks the most promising, as profits are already bubbling and prospects are good. Second place goes to Almonty, which is developing the world's largest tungsten mine outside China, making it a big player in the critical commodity. Steinhoff is still fighting for its future and remains risky.
Conflict of interest
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