August 29th, 2022 | 13:01 CEST
BYD, Altech Advanced Materials, Varta - Is hydrogen displacing e-mobility?
Table of contents:
"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
BYD - Broadly positioned
BYD's big asset is its experience in battery development. That is how the Company made it big. Its blade batteries are currently considered the leader. Tesla may also use batteries from BYD battery production in the future, as the head of BYD research revealed in an interview. With a market share of 14%, the Group is already one of the three largest producers of e-car batteries. Even large car manufacturers such as Toyota are already using the Blade batteries. But the Chinese Group has another advantage. It also produces its own chips, making it much more independent.
As a result, the Company overtook the industry leader Tesla. New record sales figures are reported almost every month. In July, a total of 162,530 vehicles were sold. Compared to the previous year, sales more than tripled. That is also due to the range of electric vehicles on offer. From small cars to buses, everything is available. The Company is now looking to expand further and wants to gain a foothold in Germany, Thailand and Cambodia. The Group is therefore continuing to invest in increasing production capacity, most recently around EUR 4 billion in a mining and battery project in Yichun.
However, rumors recently emerged that the major BYD investor Warren Buffet might have ended his investment. The reason given was a BYD position in the Hong Kong stock exchange system, which is similar in size to that of the investment legend. The fact is that the share has been under pressure since July 7, despite the record figures. That there is profit-taking after a more than 100% rally is not unusual, however. The share is currently trading at EUR 33.60 and has thus initially defended the support level of EUR 32.78. If this breaks, the next support level is at EUR 29.50.
Altech Advanced Materials - Financing secured
Altech Advanced Materials (AAM) wants to optimize batteries for electric vehicles by coating the anode material ultra-thin. This technology will prevent the formation of a boundary layer, which in today's batteries results in a 15% loss of power on the first charge and continues with each subsequent charge. The advantages are longer battery life, better chargeability and greater safety, as the coating prevents the dreaded chain reactions in rechargeable batteries. While current batteries mainly use graphite as the anode material, the next generation will have graphite silicon anodes.
Silicon can store 10 times as much energy as graphite, but it also has disadvantages like volume expansion and a 40-50% loss in the first charge cycle. For this, AAM has also developed a ceramic coating technology, for which a patent is pending. The anode material will be marketed under the Silumina Anode brand. The pilot plant is to be built in a district of Spremberg called Schwarzen Pumpe. It will supply the first sample material to the automotive industry and battery manufacturers as early as the end of the year. On July 5, the Company concluded a strategic partnership with the Fraunhofer Institute for Ceramic Technologies and Systems. Together, they intend to accelerate the testing and qualification process for the Silumina anode material.
The profitability analysis presented, which assumes a production capacity of 10,000 tons of anode material, confirms a high level of economic viability. The supply of graphite and silicon is secured by the partners SGL Carbon and Ferroglobe. The prospects are excellent, especially as the market is expected to grow strongly in the coming years. Further detailed information can be found at researchanalyst.com. The Company needs money for financing. Corresponding capital measures were resolved at the Annual General Meeting on August 23 with approval of almost 100%. So the next steps can be taken. The Altech share has been running sideways between EUR 1.00 and 1.50 since September 2021. Currently, one pays EUR 1.20 for a share certificate.
Varta - Difficult general conditions
Varta is a German battery and accumulator manufacturer. The Company is a leader in button cells and supplies heavyweights like Apple. What the Company currently lacks is a true powerhouse for the electromobility sector. In 2021, the V4Drive cell was presented, but apart from Porsche testing the cell, there was no further news. With the appointment of Markus Hackstein to the Executive Board, the V4Drive (E-Mobility), Energy Storage Systems and Power Pack Solutions business units are to be better covered.
Unfortunately, this positive news was lost, as the Ellwanger-based company had to revise its annual forecast downwards. The management presented the final figures on August 11. Sales fell by around EUR 30 million to EUR 376.8 million in the first half of the year. Adjusted EBITDA almost halved, falling from EUR 112.3 million to EUR 68.9 million this year. The main problems are a lack of semiconductors and significantly increased costs for raw materials and energy. In addition, Varta's customers also ordered less due to their supply chain and corona difficulties. Even though the second half of the year is expected to be stronger, only consolidated sales of EUR 880 - 920 million and EBITDA between EUR 200 -225 million are planned.
CFO Armin Hessenberger said, "Delays in customer projects, the ongoing tight situation in raw material and energy prices, as well as high transportation costs have caused us to adjust our forecast for the year." The strength of the US dollar could have a positive effect, as this makes products cheaper for export. After the figures, Goldman Sachs maintained its buy recommendation with a price target of EUR 102. Warburg Research recommended selling, and Berenberg advised holding. The chart has recently formed a strong support zone between EUR 68.00 and 71.00. This support must hold if the EUR 82.70 is to be tested. Currently, one share costs EUR 71.98.
Much is going on in the area of research and development for e-mobility batteries, which is essential because, otherwise, hydrogen could roll up the field from behind. BYD is currently the leader in e-car batteries and covers the entire value chain. Altech Advanced Materials could be on the verge of a breakthrough, with the product becoming the game-changer for e-mobility. Varta has yet to earn its laurels in the field of e-mobility. The high costs are putting pressure on the Group. Progress is needed with the V4Drive cell to gain a foothold in the electric car market.
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.
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.