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November 14th, 2023 | 07:00 CET

Business against climate change is booming - Allianz SE, Klimat X, Nio

  • insurance
  • Investments
  • Sustainability
  • renewableenergies
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Climate change is increasingly threatening our lives, with few areas worldwide considered safe. Sea levels are rising, and polar ice is melting. Many regions are experiencing severe storms and increased rainfall, while others face growing risks of heatwaves and droughts. Since the Paris Climate Agreement at the latest, countries have been stepping up their efforts to limit global warming to 1.5 degrees Celsius. This has created a market that experts predict will increase eightfold by the end of the decade.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: ALLIANZ SE NA O.N. | DE0008404005 , KLIMAT X DEVELOPMENTS INC | CA49863L1067 , NIO INC.A S.ADR DL-_00025 | US62914V1061

Table of contents:

    Allianz SE - Severe weather hurts business

    The consequences of global warming are unmistakable due to the sharp rise in extreme weather events. Europe's largest insurance company experienced these effects first-hand. Operating profit fell by 14.6% to EUR 3.5 billion** in the third quarter. Natural disasters - storms, hail and heavy rainfall caused considerable damage in Slovenia, Austria and Italy in particular - affected the combined ratio by 7.3 percentage points, the highest figure in the last decade.

    Only the higher investment result saved the Munich-based company's earnings and turned out better than expected by the analyst consensus. The adjusted net income for the period reached EUR 2.1 billion, slightly exceeding the anticipated EUR 2 billion. Compared to the same period last year, sales increased significantly by 4.5% to EUR 36.5 billion. Allianz continues to expect an operating profit for the year as a whole in the previous year's range of EUR 14.2 billion. In the months from January to the end of September, this figure amounted to EUR 11.00 billion.

    Following the publication of the figures, DZ Bank reiterated its Buy rating with a target price of EUR 260. As expected, the DAX-listed group presented a declining result. The Allianz share rose to a daily high of EUR 230 immediately after the announcement of the figures but gave up almost all of its gains in the course of trading.

    Klimat X - Unique in a booming market

    The transformation of the energy and transportation sector has already given rise to new industries such as renewable energies and electromobility. In addition, a new market has been created which, according to the Boston Consulting Group, is expected to grow eightfold by 2030: Emissions trading. There are only a few listed players through which investors can profit from this exponential growth market. One lighthouse is the Canadian company Klimat X, which offers a service for the increasing demand for emissions certificates from companies.

    The James Tansey-led Greentech does this by investing in the exploration, restoration and management of land and marine systems that can either be protected or restored to fully productive ecosystems. For example, Klimat X invests in the reforestation of mangroves and forests and currently operates projects in Sierra Leone, Ghana, Suriname and Mexico.

    To generate cash flow, the innovative company also operates combined agricultural projects such as the coconut water business in Guyana. In Suriname, the ground-breaking ceremony for a similar project was recently held.

    Klimat X took a significant step in the Company's history with its reforestation project in Sierra Leone. All conditions have been met to activate the second disbursement under an advance purchase agreement with a Fortune 500 company in the amount of USD 500,000. The project has an initial acreage of 5,000 hectares that can produce up to 1.9 million tons of validated and verified Verra credits over a 30-year period. The area can also be expanded by a further 20,000 ha.

    Klimat X has a market capitalization of just under CAD 10.00 million. It represents a long-term opportunity to participate in an extremely growing market.

    Nio - Expectations missed

    Electromobility is an elementary building block for the transport sector to achieve climate targets. In Germany alone, the goal of having up to 10 million electric vehicles on the country's roads by 2030 is to be achieved through subsidies. In addition, according to the political plan, around 1 million charging points are to be available in the same period. One of the best-known players is the Chinese electric car manufacturer Nio, which focuses primarily on the premium segment. Nio also stands out with its battery replacement technology, which is offered as a Battery-as-a-Service.

    However, business is stagnating, and sales figures are well below expectations. The sales forecast for the year as a whole was 250,000 units sold, but only 110,000 electric cars had been handed over to customers by the end of September. According to a report in the New York Times, the loss per unit was a staggering USD 35,000.

    Now, the management is pulling the ripcord. Of the approximately 27,000 employees, one in ten will lose their jobs. In addition, non-core business areas could be spun off. On the stock market, Nio shares reacted with heavy losses and a weekly drop of around 14%, with the car manufacturer trading close to its low for the year at USD 7.00. Indicators suggest that a further slide is only a matter of time.

    Experts believe that the number of storms and natural disasters will continue to increase due to climate change. Allianz had to report a decline in profits as a result. The electric car manufacturer Nio is in crisis and is laying off 10% of its workforce. Klimat X received its second payment from a Fortune 500 company.

    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.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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