29. December 2020 | 10:50 CET
BYD, Royal Helium, Xpeng - Take advantage of this opportunity!
Be honest, would you have believed in such a rise in electric cars 5 years ago? The era of internal combustion engines seems to be over; lithium battery-powered vehicles like Tesla, BYD, Nio and in the near future, Apple are having a hard time keeping up with the orders. It goes unnoticed that the important light metal lithium is becoming increasingly scarce. The drastic excess demand for the second most common element in the universe after hydrogen looks similar. The advantage, this trend has not yet been noticed on the capital market. Take advantage of this opportunity!
time to read: 2 minutes by Stefan Feulner
Limited choice of players
While hydrogen companies are sprouting like mushrooms, the selection of pure helium companies on the stock market is scarce. It is surprising, as the demand for helium is growing significantly in both the healthcare and manufacturing sectors. In addition, the space sector is becoming increasingly important. NASA, for example, is already the largest single customer for helium trading. When rockets are launched, helium is needed to regulate the pressure of the propellant tanks.
One Company that could become a top pick at the moment is the Canadian Company Royal Helium. Royal Helium has access to around 400,000 hectares of promising helium land in southern Saskatchewan, Canada, making it one of the largest helium leasing companies in North America.
Studies show huge potential
Back in November, it was announced that an engineering study for a large-scale industrial gas generation facility based in Saskatchewan was being initiated by Royal Helium and conducted by the Saskatchewan Research Council. The study is intended to demonstrate a large-scale facility's economic potential to separate and monetize the gas streams associated with helium production wells in Saskatchewan.
Helium is produced along with large volumes of other inert gases for a large global market. According to Royal Helium CEO Andrew Davidson, helium production economics can be significant in their own right. However, commercialization of other gases could add significantly to net cash flow.
Significantly oversubscribed placement
Initially, Royal Helium was looking to raise CAD 4.0 million in gross proceeds in a private placement. Since the explorer's paper's demand was so high, it was initially increased to CAD 5.0 million. At the end of last week, the significantly oversubscribed placement closed with CAD 6.15 million gross proceeds. The offering's net proceeds will be used primarily to fund Royal's first helium-targeted exploration drilling at its 100%-owned Climax helium project in southwestern Saskatchewan.
Currently, Royal Helium is trading at EUR 0.26 in Frankfurt. Due to the positive news flow of the past weeks, the share has moved significantly away from its lows at EUR 0.16. In addition, a significant increase in volume is also noticeable in Germany. The Cormark Securities analysts gave a target price of CAD 0.80, equivalent to EUR 0.51, although this was before the capital injection.
New plant and cooperation
The news agency Reuters reports, BYD is planning a new factory for electric vehicle batteries with an annual production capacity of 20 GWh in the city of Bengbu in the eastern Chinese province of Anhui. The total investment is expected to be around EUR 750 million. The Warren Buffet-backed group already owns three battery plants at its headquarters in Shenzhen, Qinghai, and Guangdong.
To increase its brand awareness in Japan, the "build your dreams" Company also announced an unusual cooperation. Shortly before Christmas, a partnership with the Japanese baseball team Hokkaido Nippon-Ham Fighters was established. The baseball team plans to open the Hokkaido Ballpark F Village in 2023. For this, BYD will provide zero-emission products such as electric buses, forklifts, etc. The park is expected to cover an area of more than 32 hectares.
Launch in Europe
Competitor Xpeng also has ambitious expansion plans. So the Chinese started their European strategy with the most important electric car country, Norway. 100 units of the SUV G3 were handed over to Scandinavia. The expansion is to extend to the whole of Europe gradually. Xpeng is currently exploring opportunities in other mature electric car markets with government support, modern infrastructure, and a lot of interest in electric vehicles.