June 9th, 2021 | 10:41 CEST
BYD, Nordex, Kodiak Copper: The green revolution!
Table of contents:
"[...] 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 - The development to a NEV manufacturer
BYD shares have successfully worked through the first correction, and now there is good news about the current product mix. The Chinese technology group is increasingly investing in electromobility and recently launched more and more pure electric cars on the market in addition to plug-ins. According to the latest news, this seems to be paying off.
BYD Company Ltd., which has been financially supported by US investor Warren Buffett and his equally well-known fund Berkshire Hathaway for more than a decade, is currently expanding into Europe with e-cars. A central role in the Chinese strategy is played by the new BYD Tang electric SUV, which has just been shipped in a batch to Norway to test the passenger car market in Europe. As recently reported, this is a massive step for BYD and a serious competitor for the local guys like Tesla.
BYD has just published its sales figures for May 2021. The share of e-powered vehicles increased to 71% - mainly due to solid growth in hybrids. In addition, the first 100 electric Tang EVs were shipped to Norway. More specifically, BYD sold 18,711 pure electric cars last month, up 126% from May 2020, in addition to 12,970 PHEV cars, sales of which increased by around 458% and exceeded the 10,000 mark for the first time. Sales of internal combustion vehicles declined across all segments.
Great news for all BYD shareholders, the share was able to jump back above EUR 20 and is currently fighting with the EUR 21.5 mark. The turnaround at the EUR 15 mark has worked.
Nordex - Things are not going so well
The Nordex Group is one of the leading integrated, globally positioned manufacturers of innovative onshore wind turbines. In 2020, the Company generated sales of around EUR 4.65 billion with around 8,500 employees. The Nordex Group has already installed more than 32 GW of wind power capacity in over 40 markets.
The demands on the manufacturer of wind turbines are increasing in terms of the environmental standards set - whether in the form of emission limits or requirements for environmental product declarations (EPDs). More and more countries are setting ambitious climate targets and taking action to reduce their greenhouse gas emissions.
France has the second-largest wind resources in Europe. As of December 31 last year, its installed capacity was more than 17,600 MW, and its energy production was 39.7 TWh, representing more than 8.8% of France's electricity consumption in 2020. France's main renewable energy target is to increase the share of renewables in the electricity mix to 40% by 2030 and the percentage of wind energy to 23%. However, only wind turbines that produce less than 1,200 kg of CO2 per kW of installed capacity may be installed in France.
This new project selection criterion must be proven with life cycle assessments under the ISO 14044 standard. Within a worst-case scenario analysis, the Nordex Group has calculated a maximum value of 808 kg CO2 per kW of installed capacity for all its turbine types. Overall, the trend is towards increasingly complex production designs, with margins shrinking. Since reaching the high of EUR 29.20 in April, the share price has been on a downward trend, failing to reach the EUR 30 mark, similar to the situation at the end of 2016. Wait and see!
Kodiak Copper - A success story from Canada
Copper is one of the essential raw materials for environmentally friendly future technology. It is especially needed in the e-mobility and energy sectors. With ongoing trade wars between China and the USA, scarce raw materials remain in demand. In some cases, some industrial sectors in Germany have already had to take forced breaks because important supplier parts were not available. The horror scenario of Western managers is, therefore, a permanent disruption of supply chains.
Unfortunately, the next copper mines in development are still several months away from their first pilot plants. What the market needs now is the increased availability of copper. This consideration drives the prices of copper explorers that can start production in a manageable amount of time. Analysts at BMO Capital Markets predicted that the supply deficit would increase to about 3 million tons per year by 2025. That is about one-seventh of today's global market.
Canadian explorer Kodiak Copper has a promising project in the Gate Zone, close to well-known mines such as Copper Mountain, Highland Valley and New Afton. The MPD copper-gold porphyry project is 100% owned by Kodiak, located in British Columbia, in the middle of a prolific copper-gold belt. It still has more than CAD 10 million in cash on hand, enough to do a lot of drilling this year. Major Teck Resources took a 9.9% stake in the fall; these investments usually do not happen without purpose. We expect more news on exploration progress soon.
Kodiak shares are now back at around CAD 1.90 after a quick rise to CAD 2.30. The minor price correction in May occurred in parallel with the consolidating copper price. In our opinion, this is an excellent opportunity to add to Kodiak Copper.
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