11. June 2021 | 11:46 CET
BYD, Silkroad Nickel, Baumot - WallStreetBets: Enough is enough!
Yesterday windeln.de and Adler Modemärkte, today Baumot and Nanogate. Every day, a new sow is driven through the village by the gambler community. There are no fundamental reasons for these stocks. The trend, which was started by the Reddit subcommunity WallStreetBets, is now spilling across the pond into Germany. There are companies, especially with regard to the energy transition, that have real potential due to their growth and profit prospects.
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ISIN: CNE100000296 , SGXE31916740 , DE000A2G8Y89
"[...] China has become the manufacturing capital of the World, and because of its infrastructure, expertise and capabilities, Silkroad Nickel has strategically positioned itself to partner with Chinese companies in the Stainless Steel and EV industries [...]" Jerre Foo, Corporate Development Executive, Silkroad Nickel
From EUR 0.035 to EUR 0.33, that was the daily range of the Baumot share on Wednesday. A loose tenfold increase in one day. Not even the hardest gamblers on the crypto exchanges know such fluctuation ranges. Yesterday, the price "normalized" and hovered in the EUR 0.15 range. Are the enormous price swings now fundamentally justified? No, not in any case. At the beginning of the year, an application for the opening of insolvency proceedings was already filed, and this took place at the end of March. A continuation of the Company is unlikely, according to reports. Should there be anything left that can be used, creditors' claims will be met.
The companies of windeln.de or Nanogate conduct the operational business. Thus, they cannot be compared with the insolvent Baumot. However, what also runs along the same lines are the far too high share prices, which cannot be justified in the slightest based on fundamental analysis. Therefore, buying such stocks is like playing in a casino. Black or red - be careful not to choose the wrong color!
Elon Musk challenges the mining industry
The transition could not be easier. Tesla founder Elon Musk, also known for his plays on such cryptocurrencies as Bitcoin and Dogecoin, has been calling on the mining industry to mine more nickel for years. Nickel is a key metal for the electric car industry. The more content it has in a battery, the more efficiently it operates and the longer the range.
There is extreme scarcity with almost all metals needed for the energy transition, such as lithium, tungsten and rare earth metals. Global demand and consumption of primary nickel is dominated by China and is expected to increase from about 2.2 million tons per year in 2019 to 2.5 million tons per year in 2025, with an average annual growth rate of 3%. Of these, batteries for electric vehicles should be the primary driver of nickel demand, estimated to grow by 23% annually through 2030.
Global primary nickel supply is dominated by Indonesia, which covers 27% of the global market. The majority of future nickel supply is expected to come from closer cooperation between Indonesian and Chinese companies. Chinese groups largely already hold stakes in Indonesian mining companies or have long-term offtake agreements. Silkroad Nickel is the only company listed on the SGX in Singapore in addition to Frankfurt. In addition to fixed supply agreements with the Chinese Company Tsingshan, the world's largest stainless steel producer, Silkroad is also investing together with Chinese partners in a processing plant to produce, among other things, basic materials for the battery industry.
But the Indonesian Company, which translates as "New Silk Road," wants to go global. SRN's long-term vision is to become a vertically integrated producer of NPI and ferronickel products for the stainless steel market. Silkroad Nickel has the best prerequisites here, as the focus has already been on the mining and production of nickel ore for years.
It is now needed to cheaply extract NPI, a core ingredient in stainless steel production. According to statistics, demand for NPI is expected to grow by over 6% annually until 2027. In this move, management plans to enter the highly lucrative and high-growth EV battery industry. Because its ore consists of nickel and cobalt, two important metal components needed for the production of EV batteries, Silkroad Nickel has attracted the interest of major players in the past. Strategic discussions are currently underway with Ganfeng Lithium, the world's largest lithium compound producer, with a view to forming a partnership.
Silkroad Nickel already has high-caliber partners to benefit from the boom in electromobility. Due to its first-class positioning, the Company is in a position to increase its profits exponentially in the coming years. The stock market value of the Company is currently still at EUR 65 million. If you buy in Germany, it is important to limit the market value.
Apple and BYD in the same boat?
The plans for the iCar developed by Apple are taking on further structures. Now the technology giant is looking for suitable batteries for its planned autonomously driving electric car. According to the Reuters news agency, Chinese electric carmaker BYD is among the potential partners. Talks are said to have already taken place, although they are still at an early stage. The fact that BYD already has production facilities in the USA would speak in favor of the Company. On the other hand, Warren Buffett is a long-term shareholder in both Apple and BYD. No one from the company side wanted to make a statement.