28. September 2021 | 14:06 CET
BYD, Fisker, Kodiak Copper, Varta: Nothing works without Copper!
Electromobility is becoming increasingly crucial for the energy transition in transportation. And with it the research, development and production of drives, batteries and components. In addition to electricity storage, however, vehicle cabling and the assembly of e-components are also coming to the fore. Today, an electric vehicle requires three to four times the amount of copper as it did 20 years ago, plus the demand in industrial manufacturing processes. The earth's deposits are exhaustible, and copper, in particular, is pretty much on the edge. A spot price of just under USD 10,000 per kilo clearly shows how the markets are processing this situation. Rising prices!
time to read:
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , Fisker Inc. | US33813J1060 , KODIAK COPPER CORP. | CA50012K1066 , VARTA AG O.N. | DE000A0TGJ55
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
BYD - Well run and now what?
BYD has had an excellent run in recent months. Even with the May correction with prices around EUR 15, the share survived with a subsequent doubling. Even the scandals surrounding the Chinese real estate industry affect BYD investors only slightly. From a chart perspective, however, an annoying double top has emerged at the EUR 30 mark. Can the group once again resist the chart technique with good operating reports?
BYD is one of the world's leading manufacturers of electric vehicles with proven technology for cars, buses, trucks, forklifts and rail systems. At this year's ACT Expo, they unveiled two new electric trucks. The two models can be charged at up to an astonishing 185 kW (CCS1). While the Gen3 8TT can be used for freight transport, regional transport and distribution, the more flexible 6F with an attachment even lends itself to waste disposal. Both models caused an "aha effect" at the show.
In August this year, BYD nearly quadrupled its production and sales figures to 62,589 units compared to the same month last year. However, the price of "Build Your Dreams" has bounced off the EUR 30 mark for the time being due to the uncertainties in China. Flexible investors, therefore, remain cautious and position themselves with 20% lower buy limits.
FISKER - Analysts take a positive view of the Tesla follower
Fisker Inc. is an American electric vehicle manufacturer currently developing the "Ocean" model, a five-passenger vehicle with autonomous driving capabilities. Initial showings have been very positive, and it is expected to go into production as early as 2022. Fisker's development shows clear parallels with Tesla because, like Fisker, Tesla's total liquidity in 2014 was between USD 700 million and USD 800 million. On average, analysts expect Fisker to first generate revenues in 2022 and to point to USD 2 or 5 billion in revenues as early as 2023/2024. The whole thing should then become profitable in 2024, with an EBIT margin of around 12%. Tesla will have sales of just under USD 100 billion in 2024 and an operating profit of USD 13.3 billion, which would be a margin of 14%. Both manufacturers are targeting the same market, but only Tesla can already deliver.
The Fisker share is currently trading again around EUR 13.50 after it was briefly traded above EUR 17. It remains exciting to watch the David vs. Goliath game. An investment in the USD 4.4 billion Fisker probably has the higher leverage compared to Tesla.
KODIAK COPPER - 13,600 meter drilling program completed.
Producers to mining. From wind power to e-mobility and the construction industry, the daily demand for copper is growing and is reflected in the spot prices. As a relatively soft metal, copper is easily malleable and tough. As an excellent conductor of heat and electricity, it has many uses. As there are very few mines capable of production, the market focuses its attention on exciting properties that can come into production in the next few years.
One clear future supplier to tight consumer markets is Kodiak Copper, a British Columbia explorer. The MPD property is located close to well-known mines such as Copper Mountain, Highland Valley and New Afton. Now there is an update on the 2021 drill program, which will total 30,000m.
Drilling to date in the Gate Zone has extended the north-south extent of the prospective sulphide-bearing altered porphyritic host rock from 125m to 950m. Significant copper-gold mineralization has been intersected over a width of 350m and at a depth of 800m and is open in all directions. By early September, a total of 25 holes totaling 13,600m had been drilled, with two rigs continuing to operate until the end of the program in 2021. The high-priority Dillard target has similar copper soil anomalies, geophysical responses and encouraging historical drilling as the Gate Zone. Dillard will be tested in Q4. A total of 1,755 soil geochemical samples were collected on three grids, mainly within a 5sq km area connecting the southern end of the Gate Zone to the historic Man target. There will be much more news here in the coming months.
Kodiak has been very sustainable in its approach, rehabilitating historic drill sites on the property and conducting a phased reclamation of new drill sites that includes cementing all drill holes, restoring the ground and revegetating. Unfortunately, some brush and forest fires in the vicinity of the MPD copper-gold porphyry project have led to a temporary evacuation of the property. However, due to a weather-related improvement in the situation, the drilling program could be resumed after one week.
Kodiak shares are currently trading around CAD 1.34, providing a market capitalization of CAD 65 million. Given the size and grade of the property, this valuation is too low.
VARTA - The market waits for e-mobility
Varta had not met market expectations with the last figures, but the share price had risen to EUR 165 in the run-up. Investors had already experienced in February, when the share price crashed by 40% from EUR 180 to EUR 105, that a larger price reduction is possible with more minor disappointments. The situation was similar to the half-year figures, but the movement was from EUR 165 to only EUR 115.
This highly reactive behavior reflects the market's expectation to receive definitive news on e-mobility. With its V4Drive high-performance battery, Varta has announced a very innovative product. However, the first significant volume is not expected to come off the production line before 2024. Nevertheless, the battery manufacturer is optimistic that it will scale production quickly and reliably if the prototype can deliver its technical requirements even after it has been installed in customers' homes. Until then, the share will probably continue to be found in the corridor of EUR 110 to 180. At EUR 117.5 yesterday, the stock market darling is just touching the lower trading edge. Accumulation between EUR 100 and EUR 115 should therefore bring at least medium-term success.
All automotive manufacturers are competing for market share in e-mobility. In addition to the supply chain's raw material issue, there is also a need for attractive models and innovative mobility concepts. BYD, Tesla and Fisker are highly valued protagonists in e-mobility, but the upcoming copper stock Kodiak Copper deserves the utmost attention, especially from a valuation point of view.