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June 8th, 2021 | 11:25 CEST

BYD, GSP Resource, Varta - Where do we go from here?

  • copper
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Electromobility is experiencing strong growth rates. The International Copper Association forecasts a considerable increase in demand for copper over the next 10 years, driven mainly by e-vehicles but also by industry and technology. Copper, lithium & Co are making the triumphant advance of electrification possible in the first place. We present you with exciting shares of the megatrend.

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: CNE100000296 , CA36249G1090 , DE000A0TGJ55

Table of contents:

    BYD CO LTD - Attack

    BYD (Build Your Dreams) is one of the leading battery and accumulator manufacturers in the world. With electrically powered buses and coaches, the Chinese have been active in Europe for some time and continuously report large orders. The Group has now set its sights on the European market for electric cars and is attacking Norway first. E-cars have dominated sales of new passenger cars here for several years, and the Scandinavian country is also a global pioneer in environmental and climate protection.

    **According to press reports, the first batch of 100 units of the new all-electric SUV Tang was recently shipped from Shanghai and is due to arrive at dealers in Norway towards the end of the summer. The model is to be offered at the equivalent of around USD 72,400. BYD is now hot on the heels of NIO and XPeng with its market entry.

    According to press reports, the Chinese are planning to enter Australia with the T3 e-van. To this end, the Company has signed distribution agreements. The model is to be launched on the market at a price of less than USD 35,000. **We are curious. The activity of BYD certainly pleases the major shareholder Warren Buffett, who had the right nose a long time ago and invested.

    GSP RESOURCE CORP - Enormous leverage

    GSP Resource is a Canadian mineral exploration and development company focused on projects in southwestern British Columbia. The Company is currently a tiny stock market player with a market capitalization of only CAD 8 million. Management brings a great deal of experience to the table and has a proven track record of delivering appreciable shareholder value.

    GSP Resource has an option to acquire the entire Alwin copper-gold-silver project in British Columbia. The Alwin mine project includes the past-producing Alwin copper mine. It is located immediately west of resource giant Teck Resources' Highland Valley porphyry copper-molybdenum-silver ore body, where an open pit mine operates. Copper projects, or copper stocks, are particularly popular with investors at the moment, given the rise in the price of the industrial metal.

    Last week, the Company announced it had started a fully-funded summer drilling program at the Alwin project. The drill program is for a minimum of 1,500 meters of diamond drilling and is designed to explore deeper targets within the project. The drill holes are expected to range in length from 250 meters to 350 meters. The planned drilling is intended to test narrow, high-grade mineralized deposits and areas where no mining has occurred to date.

    The Alwin project has a significant size and favorable historical production. The 575 hectare property has a historic underground mining operation developed over a length of 500 meters to a depth of 300 meters and over a width of 200 meters and produced approximately 233,100 tonnes of material between 1916 and 1981. From this, 3,786 tons of copper, 2,729 kilograms of silver and 46.2 kilograms of gold were produced! The average ore grade was 1.5% copper. Interestingly, gold and silver grades increased at depth within each zone of mineralization. In addition, the project hosts several incompletely explored targets of porphyry copper and molybdenum mineralization. Both north and west of the mining areas, in addition to the main Alwin Mine target zone. Thus, there is ample room for growth. Positive drill results could be good for a share price fireworks at any time.

    VARTA AG - The calm before the storm?

    The Varta share has not really moved in recent weeks. Currently, the Company is worth around EUR 5.2 billion at a share price of EUR 128. On average, however, analysts consider the share to be exhausted, as there are some question marks regarding its future success. It is to be feared that the growth rate will flatten out significantly. A few months ago, this was already apparent from the outlook that Varta gave for the current fiscal year.

    However, to justify the valuation, the MDAX group must show strong dynamic growth. The South Germans are hoping for this, in addition to the bread-and-butter business with lithium-ion batteries for, say, wireless headphones from the field of electromobility. In March, Varta announced its entry into the production of batteries for electric cars. Novel cells are to be produced on a pilot line at the Company's headquarters in Ellwangen by the end of the year. The new battery could be used primarily in vehicles in the premium segment; the Company has already landed its first customer from the automotive industry, but no name was given. This growth area offers fantasy but also risks, as the Group is competing against Tesla and established players from Asia. In addition, the intensity of competition in the core business also seems to be getting harsher. It remains exciting.

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    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author