22. December 2020 | 09:26 CET
BYD, Saturn Oil & Gas, JinkoSolar - The path is clear!
The oil price has been strong in recent weeks. If it goes according to the major investment houses, the positive trend will continue. Thus, the experts of Citigroup assume that the global oil demand will reach the pre-Corona level by the end of 2021. Currently, a takeover battle is taking place in the industry which offers companies the opportunity to completely reposition themselves and emerge from the crisis even stronger.
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ISIN: CA80412L1076 , CNE100000296 , US47759T1007
2020 - The year of opportunities
Quiet has fallen around the most favourable oil producer in Canada in the 2019 production year. While Saturn Oil & Gas had total costs of USD 12 per barrel on the clock, spending by oil giants such as Shell, Exxon Mobile and BP was above the USD 30 mark. To maintain this level, CEO John Jeffrey indicated that it was easier and cheaper to look for suitable acquisitions than to explore oil himself. In addition to identifying suitable takeover targets, various due diligence reviews have already been underway for months, both internally and with the help of recognized experts.
Ready for bigger tasks
Saturn Oil & Gas has already broadened its management team to be ready for the acquisition of a larger competitor. Wendy Woolsey, who has 25 years of experience in the oil industry, is responsible for finance. Jean-Pierre Colin has been hired as Chief Strategy Advisor. Colin has been considered one of the most important players in the Canadian resource industry for decades. Among other things, he advised several high-ranking politicians in the Canadian federal government and the Privy Council of Canada on Petro-Canada's five acquisitions of the nation's largest oil and gas companies in the 1980s. In addition, the strategist has served on the boards of many successful junior resource companies, including Virginia Gold Inc. which sold its Eleonor project for more than CAD 1 billion to Goldcorp Inc, now known as Newmont Corporation.
As to what Colin's goals are, he expressed upon taking office, "Saturn Oil & Gas represents a unique opportunity to build an oil & gas acquisition vehicle that can provide accretive growth and returns for its shareholders and other key stakeholders." At the moment, the stock market value of the Canadian Company is close to EUR 15.0 million. If the expected acquisition goes through, the Company is likely to face a total revaluation.
Still in boom mode
Electric cars, and no end in sight. According to analyst Adam Jonas of Morgan Stanley, global sales of electric vehicles are likely to increase by at least 50 percent in 2021 compared to the previous year. The expert also expects growth in vehicles with combustion engines. However, this is only expected to be by a maximum of 5 percent. Jonas cites the further expansion of charging stations on the one hand and the increasing acceptance of e-cars among the population on the other, as reasons. Other reasons include government subsidies and falling prices for vehicles with electric motors. However, the Morgan Stanley analyst sees consolidation in the market, as startups are also fighting for market share alongside car manufacturers. BYD, as an established player, is likely to continue its development. The stock, for example, posted massive gains of more than 10 percent at the start of the week. At the end of yesterday's trading in Europe, BYD was trading at EUR 21.20, not far from its all-time high of EUR 22.39.
Everything for the subsidiary
JinkoSolar is doing everything it can to make the IPO of its Jiangxi Jinko subsidiary a success. After last week, five board members announced their immediate resignation at JinkoSolar and defected to the main holding. The Chinese solar module and solar cell producer announced news about the use of the proceeds of the capital increase. JinkoSolar intends to use the net proceeds from the sale of shares to expand production capacity. However, expanding product capacities is currently the main task of Jiangxi Jinko. JinkoSolar still holds just under 74% of the shares and wants to pass on part of the proceeds from the issue, as a loan to the subsidiary.