BYD, First Phosphate, AppLovin – Unstoppable

BYD – Rally continues

In the run-up to the convened press conference on BYD's "God's Eye," the shares of the Chinese market leader in electric vehicles took off. In addition, a striking buy signal was generated when the all-time high of USD 42 from October 2024 was exceeded, activating numerous buy orders so that the BYD share ended the week with a gain of over 17% to USD 49.22.

Last week, the "Build Your Dream" company announced that a new, self-developed driver assistance system is to be installed as standard in the entire product range. The statement that the "God's Eye" would even be included in the smallest vehicles, which sell for under USD 10,000, came as a surprise. In addition to the autopilot, "God's Eye" also provides for automatic parking and exiting.

In addition to the innovative driving assistant, BYD continues to strengthen its supply chain and, according to Reuters reports, has secured rights to lithium mining in Brazil. The subsidiary Exploracao Mineral do Brasil, which was founded in May 2023, acquired the mining rights for two properties at the end of the year. These properties are located more than 800 km or about a twelve-hour drive from BYD's new factory project in northeastern Brazil. This factory, which was also invested in in 2023, is expected to produce 150,000 electric vehicles annually.

First Phosphate – Profiting from the LFP boom

What does the Chinese market leader BYD have to do with First Phosphate? That's right, the electric automaker uses a type of lithium iron phosphate (LFP) in its "blade batteries". These batteries are characterized by their long lifespan and safety. They have a unique, sleek design that allows them to be efficiently integrated into the structure of electric vehicles, improving overall safety and energy density.

BYD claims that these batteries are less prone to damage in accidents and pose no risk of thermal runaway, which can be an issue with other types of lithium-ion batteries. Due to the clear advantages, experts expect a parabolic growth of the LFP market from USD 10.12 billion in 2021 to USD 49.96 billion by 2028.

The profiteers of this exploding market are easily identified with the producers of phosphate for the production of the active cathode material for lithium iron phosphate batteries. The Canadian company First Phosphate focuses on its Bégin-Lamarche project in Québec, which consists of rare anorthositic, magmatic phosphate rock and generally delivers high-purity phosphate material without high concentrations of harmful elements. The Canadian company is concentrating on the extraction and purification of phosphate and plans to vertically integrate from the mine source directly into the supply chains of major North American battery manufacturers who require battery-grade LFP cathode active material from a consistent and secure supply source.

The exploration project, which has a mine life of 23 years according to the preliminary economic assessment (PEA), is expected to produce 900,000 tons of phosphate concentrate with a phosphorus pentoxide content of 40% and 380,000 tons of magnetite annually. According to the PEA, an after-tax cash flow of CAD 700 million would be generated in the first three years of production alone. The payback period for costs would be just 2.9 years.

According to the initial mineral resource estimate in the third quarter of last year, the project includes 15.543 million tons of phosphate in the indicated and inferred categories, found over a length of 2.5 km and to a depth of up to 250 m. In addition to phosphate, the project contains significant amounts of magnetite and ilmenite concentrate, which further enhances the project's economic viability.

First Phosphate has a market capitalization of CAD 28.50 million. Around 30% of the shares are held by the board and management. Given the massively increasing demand for LFP batteries, First Phosphate should benefit significantly in the coming years.

AppLovin – Expectations exceeded

AppLovin shareholders had a good day on Thursday. The Palo Alto, California-based company, which specializes in mobile advertising technologies and offers developers a platform to monetize and market their apps, reported a jump in sales and earnings that pulverized analysts' consensus estimates. In addition, the Company plans to sell its mobile gaming division, which investors rewarded with a nearly 40% increase, pushing the stock to an all-time high of USD 510.13.

AppLovin reported fourth-quarter revenue of USD 1.37 billion, up 44% year-over-year. This exceeded analysts' forecasts, who had expected revenues of just USD 1.26 billion. For the first quarter of 2025, the Company is forecasting revenues of between USD 1.355 and 1.385 billion, again above analysts' expectations.

For the first time, AppLovin's advertising revenue could break the USD 1 billion mark in a single quarter, driven by the increased use of artificial intelligence in its advertising platform.

In addition, AppLovin has signed a non-binding "term sheet" for the sale of its mobile gaming division to an unspecified, privately held company. The proposed deal includes USD 400 million in shares of the buyer and USD 500 million in cash. If the buyer cannot raise the cash portion, AppLovin will provide the financing.

BYD reached a new all-time high with the announcement of its "God's Eye" driving assistant. AppLovin's fourth-quarter results exceeded analyst estimates. First Phosphate is likely to benefit significantly from the boom in LFP batteries.