Close menu




December 21st, 2021 | 10:14 CET

BYD, Defense Metals, Nordex: Opportunities in a weak environment

  • RareEarths
Photo credits: pixabay.com

New technology requires new raw materials. The evolution of modern batteries for e-mobility alone shows how different the raw material requirements are depending on the technology used. First, cobalt was the battery metal; now, tungsten and silicon are increasingly important. Rare earths have also always been in demand for future technologies. These are used in displays and many other applications and have long since achieved the status of critical metals. We present three companies that are active in the field of rare earths.

time to read: 3 minutes | Author: Nico Popp
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , DEFENSE METALS CORP. | CA2446331035 , NORDEX SE O.N. | DE000A0D6554

Table of contents:


    BYD: This neck blow has hit home

    BYD is a leading manufacturer of e-cars. The Chinese started with their own batteries and installed them in e-scooters and other vehicles around ten years ago. In the meantime, the business has advanced, and BYD offers its own vehicles, which are particularly well received on the Chinese market. As a Chinese company, BYD has always benefited from access to raw materials. BYD is also very broadly positioned today and, in addition to its production of batteries, also offers its own chips. Given the global shortage of semiconductors, these are good prerequisites for gaining market share in difficult times.

    But what is the current situation of the share? The global turmoil on the markets has also put BYD under pressure. Over five days, the share price fell by around 8.6%. The upward trend in the one-year chart currently looks at least endangered. How can investors deal with this? Given the positive environment for BYD, the stock should also become attractive again in the medium term. One risk, however, is the recently announced ban in the US on subsidies for companies related to China. In the future, these companies will no longer be promoted under the "Buy American" label, even if they operate plants in the US. For BYD, this is a blow. It will be interesting to see how such tensions end.

    Defense Metals with feasibility study: Rare earths outside China

    If the tensions between the US and China are increasingly played out on the international markets, Defense Metals should benefit in several ways. The reason: the Company operates one of the few promising rare earth projects in North America. In late November, the Company released a preliminary feasibility study that, among other things, projects an internal rate of return (IRR) of 16%, a capacity of 1.8 million tons of rock annually, and a mine life of 19 years. Defense Metals' Luisa Moreno emphasizes that the Project has three key ingredients to be successful: promising geology, a proven processing operation, and good infrastructure within a secure legal framework.

    A few months ago, Defense CEO Craig Taylor already spoke about the advantages of his Company being located in Canada: "If we want to enjoy high-tech components, electric vehicles and clean, sustainable energy, secure supply chains are essential. With China's growing economy and commitment to domestic production of electric vehicles, the country will become an importer of rare earths rather than an exporter in the not-too-distant future. China is capable of consuming more rare earths than it produces, and then there will be nothing left for the rest of the world, as China is now responsible for 80% of the rare earths mined," Taylor said at the time. Defense Metals shares reached EUR 0.40 in mid-February and have been consolidating since then. Given the positive outlook around the Wicheeda project, investors can bookmark the share.

    Nordex: This is the way forward!

    The fact that rare earths are not only found in smartphone displays or electric cars is better known in Rostock than anywhere else. Germany's best-known wind turbine manufacturer Nordex has its headquarters there. The Company is also active outside Germany and recently scored with orders, especially from South America. On the other hand, investors were negatively affected because the margin in 2021 is expected to be only 1.0%. Among other things, Nordex cited higher raw material prices as the reason. In order to stabilize the margin in the medium term, it will also be necessary for Nordex to conclude supply agreements and secure the supply of raw materials in the long term and place the supply on a broad foundation. The stock failed to overcome the resistance around EUR 16.55 a few weeks ago. The Rostock-based share is currently out of steam.


    All of the three presented shares around e-cars, renewable energy and rare earths are currently little in demand on the market. While BYD seems to have the highest drop, Nordex is already trading at its low for the year. The situation is similar for Defense Metals. Here, progress around the rare earth project in Canada could provide impetus even in a weak market environment.


    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

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

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author



    Related comments:

    Commented by André Will-Laudien on September 26th, 2023 | 07:45 CEST

    Artificial Intelligence in Sellout! Nvidia, Defense Metals, ARM Holdings - Nothing works without rare earths!

    • Mining
    • RareEarths
    • AI
    • chips
    • Investments

    After long bull market movements, the stock market usually tends to rotate sectors, or the market enters a general consolidation. In the former case, investors can profit by reallocating their assets while exploring new investment opportunities. In the latter case, all stocks come down, and the capital market generally suffers from a change in sentiment and corrects recently exaggerated valuations. In the case of the new megatrend of Artificial Intelligence (AI), the stock market seems to sense a great need for correction. As if by magic, the blockbuster stock Nvidia rose by 250% in just 9 months. However, it has already retraced nearly 20% from its peak. Where do the opportunities lie for investors?

    Read

    Commented by Armin Schulz on September 12th, 2023 | 08:05 CEST

    NVIDIA, Defense Metals, Alibaba - Tensions between China and the US are on the rise again

    • Mining
    • RareEarths
    • chips
    • Investments

    During the BRICS summit, it was announced that six new countries will join the alliance on January 1, 2024. These countries include Saudi Arabia, Iran, the United Arab Emirates, Argentina, Egypt, and Ethiopia. This development might not sit well with the United States, as it could threaten the dominance of the US dollar. In addition, there are tensions with China over Taiwan. In July, the Middle Kingdom limited exports of rare earths. China has now added fuel to the fire by banning government officials from using iPhones. Before this, the US restricted exports of NVIDIA's AI chips to the Middle East. Tensions are rising, making it a good time to look at three companies affected by these developments.

    Read

    Commented by Stefan Feulner on September 8th, 2023 | 07:00 CEST

    Meeting climate goals in conflict: Who benefits from China's raw materials dominance? Rheinmetall, Defense Metals, BYD

    • Mining
    • RareEarths
    • Electromobility
    • armaments

    In the ambitious pursuit to meet climate targets, both political and economic players are taking a risky step. The rapid shift away from fossil fuels in favor of alternative energy sources is leading to a marked increase in the consumption of metallic raw materials that are essential for building renewable and energy-efficient systems. In particular, copper, cobalt, nickel and rare earths, whose imports come mainly from China, are experiencing rising demand. Moreover, with the outbreak of the conflict in Ukraine, the defense industry's interest in these resources is intensifying. Producers of critical metals outside of China could emerge as winners in this development.

    Read