BYD's battery revolution, Pasinex's hidden treasures, Rio Tinto's green metals: How to crack the profit code of the energy transition

BYD – In strategic transition

BYD is reviewing its internal financial system for suppliers. Instead of in-house bills of exchange, the Company plans to use standardized bank documents to settle invoices in the future. Although the previous model offered BYD cost advantages, it meant that suppliers had to wait up to 127 days for payment, which is significantly longer than the industry average. This transition is currently being tested with selected partners. The move is not without reason, as new regulations require automakers to offer shorter payment terms and greater transparency. For BYD, this means balancing the advantages of streamlined supply chain financing with increased compliance requirements.

The realignment comes at a challenging time. Sales figures are showing the first cracks. In October, pure battery-electric models grew by 17%, but overall sales slumped by 12%. This is due to the slump in the plug-in hybrid segment, which sold about a third less. At the same time, quarterly profits slipped by 33%. This is a clear signal of how much the price war in the domestic market is weighing on margins. This development is not a one-off; it was already the second consecutive monthly decline. The momentum shows that BYD's dominant position in the competitive Chinese market is no longer a sure thing.

Despite short-term turbulence, BYD is working on long-term levers. Global expansion is progressing, with the Company gaining market share in Europe in particular. BYD is also investing in future technologies such as energy storage, autonomous driving, and robotics. These areas are currently hardly included in the valuation. The challenge will be to reconcile the expansionary strategy with a consolidating market phase in China. This is no easy task. For investors, BYD remains a company in transition. It is under pressure in the short term, but has the potential to emerge stronger from the current market shakeout. The share is currently available for EUR 10.535.

Pasinex Resources – Focus on zinc and operational steps under the microscope

Pasinex Resources offers an interesting profile for investors in the base metals sector. The Canadian mining company is fully committed to zinc and is advancing its projects in Turkey at a noticeable pace. Zinc is essential for the energy transition, both as an energy storage material and in hydrogen production. Pasinex's strategy is centered on developing high-grade deposits and putting them into production quickly, a model that keeps operational complexity and capital requirements comparatively low. Recent milestones suggest that the Company is progressing steadily toward expanding its production base.

Recent company announcements paint a picture of consolidated ownership and strengthened finances. A key step was the regulatory approval (MAPEG), now granted for the complete acquisition of the Sarikaya project. This gives Pasinex 100% control of this promising asset, which is known for its high zinc grades of up to 50%. At the same time, Pasinex completed a non-brokered private placement that raised approximately CAD 2.3 million. Notably, insiders also made a significant contribution, subscribing for 2 million shares and investing CAD 150,000 of their own capital. This is a signal that investors may interpret as a vote of confidence.

Work is currently focused on the rapid development of Sarikaya. With regulatory approval in hand, the first phase of exploration and mine development can now officially begin. The plans are to start underground drilling in the first half of 2026 to explore the full potential of the deposit. These operational advances pave the way for tangible production growth and lay the foundation for positive financial development. Consistent implementation underscores management's ability to actually achieve ambitious goals. The share is currently trading at CAD 0.105.

Rio Tinto – Strategic course setting

Rio Tinto's latest production figures paint a robust picture. In the third quarter, production of most mineral resources increased year-on-year, while cost forecasts remained stable. However, a mixed picture is emerging beneath the surface. Despite higher production volumes, operating cash flow remained virtually unchanged, and free cash flow came under pressure. This is due to a significant increase in capital expenditure, which is spread across several major projects such as the Simandou iron ore mine and the Oyu Tolgoi copper mine. These investments in future capacity have also caused the Company's net debt to rise significantly.

Strategically, the Company is operating in a dynamic field. On the one hand, it is promoting partnerships, such as the expansion of the West Angelas iron ore mine with Japanese partners. On the other hand, projects such as Oyu Tolgoi are repeatedly the focus of legal and compliance-related audits. Also noteworthy is the consideration of selling part of its stake in Chinalco in exchange for assets. This is a step that could create financial flexibility for share buybacks or acquisitions. At the same time, Rio Tinto is adjusting its portfolio by shutting down uncompetitive assets, such as reducing capacity at the Yarwun aluminum refinery.

The macroeconomic environment remains a major unknown. Rio Tinto continues to be heavily dependent on the Chinese economy, where the manufacturing industry continues to struggle, even though the government is sticking to its growth targets. In the US, delayed interest rate cuts by the Fed and ongoing trade conflicts could weigh on demand. The entry into the lithium market through the acquisition of Arcadium Lithium could have a positive long-term impact, as demand for the battery metal is expected to rise. In the short term, however, the stock is likely to continue to be driven by news about trade disputes, energy prices, and geopolitical tensions. The stock is currently trading at EUR 60.83.

The energy transition offers historic opportunities, but requires the right players. BYD, as a technology leader, is under short-term margin pressure, but is continuing to drive forward its global expansion and innovation. Pasinex Resources scores with its focus on high-grade zinc deposits and operational strength, which could lead to production growth in the foreseeable future. Mining giant Rio Tinto, on the other hand, is leveraging massive investments in future materials such as copper and lithium to drive long-term growth, even if this is currently weighing on its balance sheet. Together, they form a strong portfolio along the entire value chain of the transformation.