November 24th, 2022 | 14:01 CET
BYD, Globex Mining, Nordex - When does it really start?
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
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.
BYD - Fundamentally on the upswing
Since it became known that stock market legend Warren Buffett was successively selling shares in the Chinese market leader for electric cars via his investment vehicle Berkshire Hathaway, the share price has gone down. Since its all-time high at the beginning of July, the Company has now lost around half its market value and is trading at USD 22.60, just above its low for the year of USD 21.42. A break to the downside is likely to exert further selling pressure. The next more prominent support then lies in the region around USD 17.56.
The Shenzhen-based company was able to publish fundamentally good news recently. In addition to strong figures for the third quarter, the Chinese leader in NEV cars was able to further expand its market leadership in October and posted a new sales record with 217,816 NEV vehicles, which equates to an increase of 170% compared to the third quarter of the previous year. In addition, the signs for the coming years continue to point to expansion. In addition to the launch of a new premium brand, which is planned for the first quarter, expansion into Europe is also to be driven forward.
On the other hand, the postponed IPO of the BYD Semiconductor chip division is causing concern. The management has pulled the ripcord, and the planned spin-off has been put on hold.
Globex Mining - Well positioned
Even now, commodity prices, which have risen exorbitantly in recent years, are correcting due to fears of a prolonged recession. In the long term, super-cycles in critical commodities needed for the energy transition are likely to continue. Demand for copper and lithium is steadily increasing, while supply cannot meet the growing demand. Gold and silver companies, which offer protection against runaway inflation in the long term, also remain promising. For private investors, finding a suitable investment vehicle that tracks the universe of precious metals and commodities takes time and effort. An alternative would be to invest in the commodity industry incubator Globex Mining.
The debt-free company generates cash flows through royalty payments from partners and has a cash balance of over CAD 20 million. The Company owns 217 projects in Canada, the USA and Germany. The diversified portfolio includes precious metals such as gold, silver, palladium and platinum, base metals such as copper, zinc, lead and nickel, and specialty metals and minerals such as iron, molybdenum, lithium and rare earth metals. With 44 projects, Globex Mining participates directly in the energy transition, as critical metals and minerals such as iron, rare earths, uranium, lithium and cobalt are stored here. A total of 55 projects have historical or NI 43-101 compliant resource estimates.
Globex Mining generates revenue by optioning land packages from its inventory for cash and shares. As a result, the Company receives recurring royalties, and the partner assumes the exploration risk. In addition to acquiring and licensing properties, the Company also invests approximately CAD 1.5 per year in the exploration of its own properties.
Globex Mining's market capitalization is CAD 34.69 million. Given the large number of promising properties and the cash cushion of more than CAD 20 million, the share price should benefit disproportionately if commodity and precious metal prices rise.
The CEO of Globex Mining, Jack Stoch, will be taking questions from investors on 7 December 2022 on the occasion of the 5th IIF - International Investment Forum. Participation in the virtual event is free of charge.
Nordex - Order upon order
The chart condition of the Nordex share has improved significantly. After a double bottom at EUR 8.15, the stock was able to distance itself considerably from the lows. From the technical picture, a W formation could emerge, with the next price target likely to be around EUR 16.70.
Despite the ongoing weak margin situation, as the figures for the third quarter impressively demonstrate, the further downward spiral for the Hamburg-based company seems to have stopped. In the third quarter, the Company generated sales of EUR 3.9 billion. That was below the revenue of the third quarter of 2021, when EUR 4.0 billion was achieved. The EBITDA loss was EUR 200 million, compared with a profit of EUR 101 million a year earlier. As a result, the EBITDA margin moved to -5.2%. For the full year, the Company expects an operating margin of around -4%. The reasons are inflation, supply bottlenecks and project delays.
The continued strong order situation is having a positive effect. The Nordex Group received orders from Aspiravi, one of Belgium's largest wind farm operators, for the supply of four wind farms with a total of 43.2 MW. The contracts also include a premium service agreement for the turbines for a period of 20 years. "Together with the four projects, we have received orders from Aspiravi for 100 MW in Belgium since 2020. We are very pleased with this repeated confidence in our technology," says Patxi Landa, Chief Sales Officer of Nordex Group.
There is no alternative to switching to alternative energy sources to achieve climate targets. Despite good fundamental data, the electric car manufacturer BYD continues to move in a downward spiral. The Nordex Group was able to escape this spiral. Due to the expected rising commodity prices, the broadly diversified portfolio of Globex Mining is promising in the long term.
Conflict of interest
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