Close menu




February 6th, 2024 | 07:15 CET

BYD, Defense Metals, Rheinmetall - Strategic breakthroughs open up new opportunities

  • Mining
  • RareEarths
  • Electromobility
  • armaments
Photo credits: pixabay.com

Rare earth metals play a crucial role in many modern technologies, especially in electromobility and the defense industry. Their unique properties make them irreplaceable for specific applications. Demand is increasing dramatically due to ambitious climate targets and the rearmament that has occurred since the start of the war in Ukraine. China holds a quasi-monopoly on the entire value chain. In Western countries, there is a lack of alternatives to escape dependence on the Middle Kingdom.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , DEFENSE METALS CORP. | CA2446331035 , RHEINMETALL AG | DE0007030009

Table of contents:


    BYD - Crash despite positive development

    Looking purely at the share chart of the Shenzhen-based company, one might assume that the Chinese market leader in electric vehicles is in serious trouble. BYD shares have lost almost 40% of their value since last year's high and are only just above the double low of USD 21.64 formed in 2023. If the share price falls below this striking mark, it could open up further downside potential to around USD 19.50.

    Following the weaker-than-forecast quarterly figures, which were responsible for the further downward trend, the Build Your Dreams company had a good start to the new year. In January alone, 105,304 fully electric vehicles went to new owners, almost 48% more than in January 2023. Production also increased significantly, with 114,365 electric vehicles built last month, an increase of 64% compared to the previous year.

    It is also interesting to note that BYD's all-electric vehicles are starting to overtake plug-in hybrids. BYD's PHEV sales rose by 21% to 95,715 last month, while production only increased by 9% to 90,749 units. After selling almost 1.6 million e-vehicles in 2023, BYD continues to drive growth with expansion outside China. In January, the Company, co-financed by Warren Buffett, delivered a record number of 36,174 vehicles overseas.

    Defense Metals - Fresh capital and a strong partner

    There are few alternatives to Western projects that mine rare earth metals. Apart from a few mines in Australia, the Mountain Pass mine in California, whose operator MP Materials is valued at USD 3.06 billion on the Nasdaq, is the only major producing deposit. A second beacon that could supply the West's supply chains with around 10% of current annual production in the future is located around 80 km northeast of the city of Prince George in British Columbia. Here, Defense Metals operates the 100%-owned Wicheeda project on a total area of 8,301 hectares. The infrastructure is first-class. The deposit, which has the same metallurgy as Mountain Pass, is close to the Canadian National Railway and major highways that provide easy access to the port facilities in Prince Rupert, the closest major North American port to Asia.

    Developments in recent months are clearly pointing in the right direction. The mineral resource estimate significantly increased in the third quarter of last year, with the concentration of rare earths in 6.4 million tons of rock now averaging around 2.86%. The completion of the pre-feasibility study is planned for the first half of the year, by which time Defense Metals' shares, which have received little attention on the stock market, should be moving towards their highs of CAD 0.36 from 2023. The share is currently trading at CAD 0.25.

    The Canadians recently announced two strategically important partnerships. Firstly, Defense Metals is supplying a concentrate of rare earth carbonates to Ucore Rare Metals, which is to separate these into their respective components using its RapidSX™ technology. In addition, McLeod Lake Indian Band has invested CAD 2.6 million in Defense Metals, representing a significant vote of confidence from the indigenous people living there in the Wicheeda project and the region's development.

    Rheinmetall - From high to high

    Rheinmetall AG's share price, on the other hand, continues to run like clockwork. This represents a performance of 16% since the beginning of the year. Looking at the DAX member's chart since the start of the war in Ukraine, the share price has risen by 220%. With the increasing armament of various countries and the further escalation of trouble spots in many parts of the world, there seems to be little need to worry about a lack of orders in Düsseldorf.

    The signs continue to point to growth for the integrated technology group, both organically and inorganically. With the acquisition of a majority stake of 72.5% in the Romanian vehicle manufacturer Automecanica Mediaș, the Company has taken a significant strategic step. This acquisition expands Rheinmetall's presence in Central Europe and opens up considerable sales growth and new, promising customer countries.

    With the new acquisition, Rheinmetall sees an annual sales potential of around EUR 300 million in the medium term and expects incoming orders in the triple-digit million euro range as early as fiscal 2024.

    From a strategic perspective, the Company's location in Mediaș, Romania, is favourably situated with regard to the Ukraine conflict. The local presence thus guarantees the armed forces on NATO's eastern flank shorter response times and greater security in the supply chain in maintaining the operational readiness of the Western combat systems deployed in Ukraine and their logistical support.


    Despite rising sales figures in January, the shares of the electric vehicle manufacturer BYD are still undergoing a correction. In contrast, Rheinmetall has consistently reached new highs and strengthened its position as a leading weapons supplier through a strategic acquisition. The announced strategic partnership with McLeod Lake Indian Band is expected to advance the Wicheeda project significantly.


    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

    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



    Related comments:

    Commented by Armin Schulz on February 21st, 2024 | 07:30 CET

    Barrick Gold, Desert Gold, Renk - Golden times everywhere?

    • Mining
    • Gold
    • Defense

    The world is full of economic uncertainty and geopolitical tensions. These are ideal conditions for gold, which is still considered a safe haven. There are now several factors that point to a sustained upswing in gold prices. One factor is the increased involvement of central banks, which are increasing their reserves to an extent not seen for decades. Another factor is the discussion within the BRICS nations about introducing a new currency backed by gold as a counterweight to the dominant US dollar. Therefore, today, we look at two gold companies and shed light on Renk, a representative of the defense industry, which is also experiencing golden times.

    Read

    Commented by Juliane Zielonka on February 21st, 2024 | 07:15 CET

    Saturn Oil + Gas, Plug Power, Deutsche Pfandbriefbank - Energy shares and falling knives - where is it worth getting in?

    • Mining
    • Oil
    • Hydrogen
    • greenhydrogen
    • Banking

    The Canadian company Saturn Oil & Gas has announced its capital and operating budget plans for 2024. The main focus is on sustainable oil and gas production with high capital returns, a structured capital allocation and continuous rapid debt repayment. Plug Power is also gaining momentum and taking strong cost-saving measures to maintain its position at the forefront as a green hydrogen provider. Deutsche Pfandbriefbank (pbb) came under the spotlight last week as investors dumped shares due to its involvement in the US office real estate market. Is this bank a falling knife, or does this week offer a potential entry point? We provide the background.

    Read

    Commented by Fabian Lorenz on February 21st, 2024 | 07:00 CET

    Top news: BYD, Bayer and Globex Mining

    • Mining
    • Gold
    • Commodities
    • Electromobility
    • chemicals

    Bayer shocked investors yesterday with the announcement of its dividend cut, which shouldn't have been much of a surprise. The Company is burdened with high debt, endless legal fines, and an empty pharmaceutical pipeline. In an initial reaction, analysts have lowered the share price target. BYD, on the other hand, is doing well operationally. Only the share price is not picking up. Will a share buyback turn the share price around? For those who want to profit from the commodity boom with reduced risk, then Globex Mining's stock is attractive. The news flow is strong, and those who act quickly can still register and follow the live presentation of the mining incubator at the 10th International Investment Forum, IIF, today.

    Read