August 22nd, 2022 | 11:18 CEST
BYD, First Hydrogen, Lufthansa - Mobility stocks in check
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"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
BYD - From record to record
BYD decided early on to develop electric vehicles. One of the main reasons is certainly its expertise in batteries. After all, the Group started as a battery producer. Despite a zero-Covid policy in China, the Company continuously reports strong growth figures. BYD sold 162,530 vehicles in July, almost 30,000 more than the previous month. By comparison, sales in July 2021 were still just over 50,000, with passenger cars accounting for the majority. Buses and commercial vehicles sold 316 units, a slight increase on June but down year-on-year.
The Group plans to expand its production capacity further and invest around EUR 4 billion in a mining and battery project in Yichun. According to an interview with the head of research, Tesla also wants to install BYD's Blade batteries in the future. This is tantamount to an accolade. Blade batteries have long been regarded as a leader in the automotive sector. However, an official confirmation from Tesla is still pending. But independently of Tesla, BYD also wants to supply other carmakers with batteries as needed. In order to achieve this, a secure value chain is necessary, which is being strengthened with the project in Yichun.
The sales markets for the cars produced are to be further expanded. The start was made in Norway and Denmark, but Sweden, Germany, Israel, Thailand and Cambodia are also on the rollout list. A sales and service partner has already been found in Denmark, and a first dealership in Copenhagen is planned for the fall. So the signs continue to point to growth. The share, which had rallied from mid-March to early July, is currently consolidating between EUR 33.50 and EUR 38.00. The share price is expected to remain at this level for the time being. If the support at EUR 33.50 holds, a test of the annual high at EUR 41.80 is only a matter of time.
First Hydrogen - Positive signals from politics
The Canadian company First Hydrogen is currently getting a tailwind from politics. Chancellor Scholz is traveling to Canada to secure green hydrogen for the coming years. Emission-free drives are the future, and one of the solutions is the hydrogen fuel cell, especially in transportation. Here First Hydrogen has done pioneering work by developing light commercial vehicles according to the best-of-approach. Based on a MAN body, a van has been developed with technology partner Ballard and AVL Powertrain's design, which has been put through its paces since June. If everything goes according to plan, the van should receive road approval as early as September.
The Canadian government announced on July 11 that it would provide USD 547.5 million in funding for zero-emission medium- and heavy-duty trucks. First Hydrogen then announced on August 9 that it would expand green hydrogen production plans in North America with a focus on Canada. In order to move forward with this as quickly as possible, Arup Canada Inc, a global consulting firm, was hired to provide technical advice. Since July, the Group has also been planning two green hydrogen production projects in the UK. There, too, attractive subsidies await. The product portfolio will then cover both the supply of green hydrogen, modern filling stations and zero-emission commercial vehicles.
The Company thus intends to offer its customers a hydrogen-as-a-service model. Interest is high. On July 22, UK-based First Hydrogen Limited was accepted into the Aggregated Hydrogen Freight Consortium, an association of van and truck fleets. The Company already has 10 prospective customers for its hydrogen-powered vans. A detailed study on the Company can be found at researchanalyst.com. That the basic sentiment towards hydrogen has recently developed positively can also be seen in the share price of Frist Hydrogen. At the end of June, the share price was CAD 2.00, and now, it is CAD 3.10. The next positive impulse is waiting with the road approval. Then we could quickly head for new highs here.
Lufthansa - Trouble looms
Lufthansa is struggling to get out of the negative headlines. First the problems with too few staff, many flight cancellations, and then strikes created a bad mood among passengers and also investors. The pilots of the Eurowings subsidiary are also demanding more money, although it was announced at the weekend that exploratory talks have been inconclusive. That increases the likelihood of a strike, which would cost the Group dearly. In addition to personnel problems, there are supply chain problems, so that planes cannot take off due to a lack of spare parts.
At least it was possible to reach an agreement with ground staff on new conditions at the beginning of August, but there is still a lot of work to be done. The half-year figures, which were presented on August 4, show positive trends. Sales climbed 140% YOY to around EUR 13.8 billion. Nevertheless, the Group's bottom line was a loss of EUR 325 million. However, the equity ratio increased from 7.7% to 16.9%. Investments also increased again. While this figure was EUR 443 million in the first half of 2021, it was EUR 1.38 billion in 2022. The EBIT margin was -2.2% compared to -36.6% in the previous year. Taking only the second quarter, the Group was back in the black for the first time.
Following the figures, several analysts updated their ratings. Bernstein Research advises Selling with a price target of EUR 4.75. DZ Bank sees the share as a buy, and UBS, Deutsche Bank and Goldman Sachs advise a hold with price targets between EUR 7.70 and EUR 8.00. So you can see that the experts disagree due to the many construction sites. Since the end of June, the share has formed an upward trend, which is only broken with closing prices below EUR 5.83. If this mark holds and the last high at EUR 6.89 is taken out, the chart picture brightens considerably.
Mobility is a basic need and therefore shares around mobility will always be in demand as long as the quality is right. BYD is a player in the e-mobility market that has even overtaken Tesla recently. First Hydrogen is betting on a market that can grow exponentially with its hydrogen fuel cell drive in the commercial vehicle segment. Lufthansa must get the problems caused by Corona under control. Then the share can take off again.
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