March 3rd, 2022 | 10:44 CET
BYD, Nevada Copper, Mercedes-Benz Group: Price shock also at the charging station
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"[...] If we pursue our goals conscientiously, the market will adjust its valuation accordingly, I am sure. Often, all it takes is a trigger. [...]" Ryan McDermott, CEO, Phoenix Copper
BYD: Energy efficiency as a selling point
In an article in the Handelsblatt, other charging infrastructure providers also admit that tariffs could soon become more expensive. Since some of the price adjustments mentioned were already made months ago, further price rounds could follow in light of rising energy costs. But will this make e-car driving unattractive? Compared with diesel and super, electricity will remain cheap even after the price adjustments. Although articles about rising prices at charging stations are making waves in the media and should encourage drivers to compare different providers, electric driving remains attractive. The popularity of companies like BYD is therefore likely to continue.
The Chinese manufacturer of e-cars is well positioned in terms of energy efficiency. BYD's e-platform 3.0 is supposed to achieve an efficiency of 89% and at the same time be cheaper and safer than previous platforms. For example, it should be possible to fill up enough electricity for 150 kilometers of driving in just five minutes. BYD is also opening up the platform to third-party customers - so if other manufacturers want to use the platform, they will have to pay a license fee. In return, there is no need for in-house development. For BYD, this approach could be lucrative in the long term. The Company is also well-positioned in chips and software and has the edge over the competition. If BYD, which also has German engineers, can increase unit sales, this lead should manifest itself. The stock remains speculative but could have found a bottom in the EUR 25 area.
Nevada Copper: Cyclical with good timing
The Nevada Copper share has been forming a bottom for months. In the meantime, the value is slowly stalking its way upwards. The Company has brought its Pumpkin Hollow mine into production, which stands for 77 million pounds of copper annually. An open pit mine in the immediate vicinity has already been approved and could deliver another 200 million pounds annually. In addition, Nevada Copper has four other exploration projects. With its Nevada location, the Company operates in the middle of the US e-car industry; battery manufacturers and carmakers are not far away. Even though e-car drivers also have to pay attention to energy prices these days, e-cars remain clean and cheap. That is also fueling demand for new charging stations. These, like power lines, have always contained copper.
Nevada Copper may still have a reputation as a cyclical stock among many investors. The share has been on a roller coaster ride in recent years. In the meantime, however, the Company has found new anchor shareholders in Solway and Mercuria and is on a mission: Pumpkin Hollow is to be expanded step by step. Although this process may also be marked by setbacks, the stock appears attractive given the current low valuation level. The Company has also positioned itself with foresight in terms of ESG. The enfant terrible of recent months is a case for the watchlist.
Mercedes-Benz Group: The war is closer than you think
The Mercedes-Benz Group share is also attracting attention these days. The former Daimler Group without the truck division lost around 9% in value in the past five trading days. What was the reason for this? First and foremost, the war in Ukraine is probably responsible for the share price losses. Media reports about missing cables created sell-off sentiment in auto stocks. Experts even consider a production freeze lasting months to be possible. Nevertheless, investors should not panic. Appropriate cables should be able to be procured elsewhere. The chip crisis has also shown that production bottlenecks and rich margins do not have to be mutually exclusive - this has worked out well for Mercedes in particular. The share is still on an upward trend, which has been going on for a long time and is steep. Volatility at Mercedes could increase.
The price shock at charging stations is not changing the trend toward electromobility. Above all, companies that have done their homework in recent years will benefit. Copper producers are also a viable bet on the e-car boom. At Nevada Copper, in particular, the timing seems to be right - in the coming months and years, the Company plans to expand its properties into a copper district.
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