BYD, 123fahrschule, RWE – Pure growth

BYD – Sudden setback

For a long time, the Chinese market leader BYD was able to withstand obstacles such as punitive tariffs from the EU and the US. BYD shares made a strong statement on Wednesday of last week with an all-time high of USD 54.55. However, on Friday, investors fell into a state of shock and the share price plummeted by over 5.5%. What had happened?

Market observers cited an EU investigation into illegal subsidies from China for a new electric vehicle factory by BYD in Hungary as one of the reasons. According to the Financial Times, there are suspicions that BYD benefited from China's support for the plant in Szeged, which is scheduled to start production later this year. However, the volume involved was not mentioned.

If the allegations are confirmed, the amount of funds improperly received could be crucial. The European Commission could take harsh measures in response. These could include requiring BYD to divest itself of certain assets, reduce capacity, or repay the funds improperly received. In addition, the Company could be fined.

Caution is advised from a chart perspective in any case. After the all-time high was sold off, the chart now threatens a stronger correction due to overbought conditions, with the closing of the upward gaps at USD 47.35 and USD 39.77. On the other hand, a breakout above the all-time high would be a procyclical buy signal. This does not seem impossible, as BYD released its annual figures yesterday after the editorial deadline.

123fahrschule with 177% potential

The disruptive driving school chain, with a focus on e-learning, which has focused on the digital expansion of classic driver education in the German driving school market, continues to be geared for growth. The market volume is huge at EUR 3 billion, with more than 1 million driving tests taken in Germany every year.

With more than 60 locations, 123fahrschule SE is already the industry leader in the B segment and plans to expand further to up to 200 locations in the next few years while always keeping an eye on improving cash flow and profitability. For further expansion, a convertible bond with a volume of EUR 3.4 million was successfully placed with existing shareholders and institutional investors last month.

Preliminary figures for the full year 2024 showed revenues of EUR 22.8 million, a growth of 10% over the same period last year. EBITDA turned positive with an increase of EUR 0.4 million. In 2023, this key figure was still negative at EUR -0.9 million. For 2025, CEO Boris Polenske expects revenues in the range of EUR 28 and 30 million. In turn, the EBITDA should be between EUR 1.5 and 2.0 million.

In order to further advance the future development of 123fahrschule SE, the Cologne-based company brought Dr. Andreas Günther, an experienced strategist, on board. In the past, CEO Polenske's new board colleague was managing director at the CHECK24 group and subsequently at JUMiNGO, in addition to his role at Bain & Company.

Analysts firm NuWays acknowledged the positive development by reiterating the target price of EUR 7.20 and the "Buy" investment rating. Compared to the current price of EUR 2.60, this results in a price potential of 177%.

RWE – Hedge fund applies pressure

It is not only Donald Trump who is putting pressure on the energy giant RWE. The US president, who does not think much of the expansion of new energies, issued a decree to cut investment in green energy by around EUR 10 billion. As a result, the construction of an offshore wind project in New York was canceled.

Demands are now also coming from investors, specifically from the billion-dollar hedge fund Elliott, which has acquired a stake of around 5% in RWE. The activist fund, led by the well-known investor Paul Singer, is calling for an increase in its share buyback program. Already in the fall, several media outlets reported that Elliott had invested in RWE. As a result, the utility then launched a buyback program with a volume of EUR 1.5 billion.

The publication boosted RWE shares and lifted the value by more than 2% to EUR 32.90. From a chart perspective, the world's second-largest developer of offshore wind farms was able to break the downward trend that had been established since May 2023. The next distinct hurdle is the horizontal resistance at EUR 34.

After reaching a historic high, the Chinese market leader in electric vehicles, BYD, saw profit taking set in. The hedge fund Elliott is calling on RWE to increase its share buyback program. Due to the positive business development, analysts at 123fahrschule see multiplication potential.