Close menu




December 5th, 2023 | 07:00 CET

Blackrock Silver, BYD, Infineon - Silver: The new gold of the technology sector?

  • Mining
  • Silver
  • Electromobility
  • chips
Photo credits: pixabay.com

There is currently an attractive opportunity for investment in silver as it plays a key role in the growing e-mobility sector and chip manufacturing. The increasing production of electric vehicles is driving the demand for silver. Simultaneously, silver is becoming increasingly important due to its use in highly conductive pastes for the progressively sophisticated chip manufacturing industry. These developments could lead to a sustained increase in demand and make silver a potentially lucrative investment. Precious metal prices have already risen sharply.

time to read: 4 minutes | Author: Armin Schulz
ISIN: Blackrock Silver | CA09261Q1072 , BYD CO. LTD H YC 1 | CNE100000296 , INFINEON TECH.AG NA O.N. | DE0006231004

Table of contents:


    Blackrock Silver - Mineral resource increased by 135%

    Silver demand has now outstripped supply for 5 years. Such years are often followed by a price increase in silver, which may have already begun. This is good news for Blackrock Silver, a Canadian mining company specializing in the exploration of silver and gold. The Company's flagship project, Tonopah West, is located in the Tonopah Silver District in Nevada, one of the best-known silver districts in North America. The Company has completed more than 150,000 meters of exploration drilling since 2020 and established the project as one of the highest-grade undeveloped silver projects in the world. The exploration work has paid off. On November 10, the Company released an updated Mineral Resource Estimate (MRE).

    The resource estimate increased by 135% to 0.57 million ounces of gold and 47.74 million ounces of silver, corresponding to 100.04 million ounces of silver equivalent. The average grade of the inferred mineral resource is 508.5 g/t silver equivalent, an increase of 14% over the previous estimate. Discovery costs have been reduced to USD 0.29 per silver equivalent ounce. The updated MRE covers a strike length of approximately 3 km along the Tonopah West vein system. As the mineralization is still open on several sides, the project continues to offer great potential for expansion. This data was also submitted with the technical report to Sedar on November 8.

    A large lithium deposit with similar grades to neighboring American Lithium was also discovered on the Tonopah property, covering 7.2 sq km. A joint venture with Tearlach Resources is working on the preparation of a resource estimate. With the Silver Cloud project, also located in Nevada, Blackrock Silver owns another gold and silver project on which a further high-grade gold and silver discovery was made this year. According to an announcement on October 27, the Company was able to significantly reduce costs, such as the lease, enabling the project to be developed further. The share price has risen by 62% since the end of September and is currently trading at CAD 0.365.

    BYD - Price cuts cause share price to plummet

    An electric car contains an average of 93 g of silver, corresponding to around 3 ounces. By comparison, only 15-28 g are needed in a vehicle with a combustion engine. The demand for the precious metal will, therefore, increase significantly solely due to the automotive industry, which is focusing on electric drives. The largest market for electric cars is China, where BYD is the leading manufacturer. On November 24, the six millionth electric vehicle rolled off the production line. However, investors saw no reason to rejoice, and the share price plummeted due to price reductions announced by the Group. For the market, this means that the price war for electric cars is far from over.

    The price reductions were relatively moderate, ranging between EUR 650 and EUR 1,300. Analysts at Bernstein currently see a neck-and-neck race between Tesla and BYD. Analyst Toni Sacconaghi expects Tesla to achieve sales of USD 114 billion and EBITDA of USD 8.7 billion in the coming year. The Chinese competitor has sales of USD 112 billion and an EBITDA of USD 7.1 billion, with BYD growing significantly faster** and has only just begun its internationalization efforts. However, the market capitalization of the two companies is worlds apart.

    Tesla has a market capitalization of almost USD 760 billion, while BYD has only USD 110 billion. Either Tesla is far too expensive, or BYD is far too cheap. The truth is likely somewhere in the middle. Analysts currently have different opinions: while UBS sees further potential and has issued a target price of EUR 46.50, UOB analyst Kay Hian is very pessimistic and has set his target price at EUR 18.20. Recently, the share has repeatedly shown downward price gaps but seems to have stabilized around EUR 24.50 and currently stands at EUR 28.89.

    Infineon - Strong growth in the last year

    Infineon is a leading semiconductor manufacturer based in Germany. The Company has a broad product portfolio ranging from microcontrollers and sensors to automotive and power management ICs. Under Infineon's project leadership, the European research project Progressus has developed solutions for current power grids to make them more resilient to the fluctuations of renewable energies. The aim is to reduce the load on the electricity grid. In the pilot project, intelligent energy management in 16 buildings reduced electricity demand by an average of 80%.

    The Group has been back on track for some time and has benefited from the chip shortage. This can also be seen in the figures for the fourth quarter, which were presented on November 15. In the past quarter, the Company achieved sales of EUR 4.149 billion and a profit of EUR 1.044 billion, corresponding to a profit margin of 25.2%. A free cash flow of EUR 614 million was generated during this period. Sales of EUR 16.309 billion were achieved over the 2023 fiscal year, an increase of 15% compared to the previous year. Net profit for the year amounted to EUR 4.399 billion, up 30% on the previous year.

    Adjusted earnings per share rose by 35% to EUR 2.65. Free cash flow amounted to EUR 1.158 billion, while adjusted free cash flow reached EUR 1.638 billion. The Group expects continued strong demand for semiconductor products, particularly in the fields of electromobility and renewable energies. In November, there were 6 "Buy" recommendations for the share with price targets of between EUR 40.00 and EUR 47.50. Only JP Morgan issued a "Hold" recommendation. The share recently broke through the important 200 mark and is now trading at EUR 36.16.


    The silver deficit of recent years and rising demand from the automotive and renewable energy industries should lead to higher prices in the long term. Higher prices are particularly advantageous for silver companies such as Blackrock Silver. With over 100 million ounces of silver equivalent on the Tonopah property alone, plus the Bonanza Fund on Silver Cloud and the large lithium deposit, they have 3 hot irons in the fire. BYD slightly lowered prices and was brutally punished for it. Those who believe in electromobility may find a good long-term entry point here. For Infineon, things are going well, as evidenced by the chart. The Company is well positioned for growth markets.


    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.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Armin Schulz

    Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.

    About the author



    Related comments:

    Commented by André Will-Laudien on April 18th, 2024 | 07:15 CEST

    Attention Nvidia! The turnaround check for Nel ASA, Saturn Oil + Gas, Lufthansa and TUI

    • Mining
    • Oil
    • AI
    • Travel
    • renewableenergies

    It looks like a peak is forming in Artificial Intelligence. The most prominent share here is Nvidia. With a spectacular rally, the value has surged by over 100% in just 6 months. However, the share price is now stuttering, and there have been no new highs for days. The charts for TUI and Lufthansa also show an upward reversal. The latest wage negotiations have tightened the cost structure considerably. Also, a significant amount of revenue has been lost due to the numerous strikes. And now the Middle East crisis is flaring up, making the entire region a risk for holidaymakers. However, the rise in oil prices is giving oil companies a new lease of life. Here is a list of interesting investments.

    Read

    Commented by Juliane Zielonka on April 18th, 2024 | 07:00 CEST

    Volkswagen, Altech Advanced Materials, BYD - who can benefit from China's rise

    • Innovations
    • Technology
    • Electromobility
    • Batteries

    Chinese companies such as BYD benefit from state subsidies and domestic access to raw materials. BYD's subsidies have risen from EUR 220 million in just three years to EUR 2.1 billion. These sums are helping BYD dominate the Chinese electric vehicle market and increasingly penetrate the European market. Volkswagen cannot escape the pull of China either. As part of its "In China, for China" strategy, Volkswagen is expanding its cooperation network with Chinese partners. The aim is to reduce costs significantly in the development of EV technology. For companies like Altech Advanced Materials, close cooperation with Chinese market leaders such as BYD and Volkswagen offers the opportunity to commercialize innovative battery technologies that meet the needs of the changing market. One of these innovations, made in Germany by Altech Advanced Materials, increases the longevity of EV batteries by 30%. Here are the details.

    Read

    Commented by Armin Schulz on April 17th, 2024 | 06:45 CEST

    Barrick Gold, Globex Mining, BP - Commodities In the spotlight: Supercycle started?

    • Mining
    • Gold
    • Silver
    • Commodities
    • Oil
    • Gas

    Global demand for commodities is reaching new heights, partly driven by increasing geopolitical tensions. The exchange of attacks between Iran and Israel is a case in point. This conflict, deeply rooted in religious and political differences, continues to escalate and could have far-reaching consequences for international stability and commodity markets. With this latest escalation of the Middle East conflict, security aspects in the global competition for important resources such as gold, silver and copper are taking center stage. China is demonstrating its hunger for resources. However, the price of oil has also risen recently. There has long been talk of a commodity supercycle. Perhaps it has now finally begun. Where should one invest now?

    Read