Close menu




September 28th, 2023 | 07:10 CEST

BYD unstoppable. Sell Varta shares? 200% with Almonty Industries?

  • Mining
  • Tungsten
  • Electromobility
  • renewableenergies
Photo credits: Seat SA

Electromobility and the energy transition offer numerous investment opportunities along the value chain. Take BYD, for example. The Chinese company is increasingly becoming the e-car market leader. Could they soon even dethrone Tesla? That should make the stock interesting. And what about Varta? The battery manufacturer disappointed investors last year. Is the stock attractive now? Analysts continue to take a critical view of the Company. Almonty Industries is a different story. After the latest half-year figures, the experts at Sphene Capital advise buying. From 2024, sales and profits of the tungsten producer are expected to grow strongly. According to the analysts, the share could triple.

time to read: 3 minutes | Author: Fabian Lorenz
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , VARTA AG O.N. | DE000A0TGJ55 , ALMONTY INDUSTRIES INC. | CA0203981034

Table of contents:


    Almonty Industries: Jump in sales and profits from 2024 onwards

    Can a commodity producer double its sales in a year? Yes, if, for example, it starts up a new mine. This is on the horizon for Almonty Industries in 2024. The Canadians will soon begin operating their tungsten mine in South Korea. The Sangdong mine will be one of the largest tungsten mines in the world in just a few years, potentially making Almonty the most important supplier of the coveted raw material outside China and Russia. The Company also has mines in Spain and Portugal. According to analysts, this is expected to generate revenue of CAD 28.9 million in the current year. However, the result is still negative due to the development of the Sangdong project.

    In the coming year, things will get exciting: Analysts expect sales to jump by over 100% to CAD 60.9 million. EBITDA is expected to climb to CAD 20.6 million, and positive earnings after tax (EAT) of CAD 6.0 million are expected to remain in the Company's coffers - with a further upward trend in the coming years. In 2025, the revenue mark of CAD 100 million should already be cracked, and EBITDA and EAT should increase to CAD 49.1 million and CAD 27.3 million, respectively. Correspondingly, the P/E ratios for 2024 are currently 19.2 and 4.7 for 2025. Too little, say the analysts. They recommend the Almonty share as a Buy with a price target of CAD 1.59, representing a price potential of over 200%.

    Almonty will be presenting live at the 8th IIF - International Investor Forum on October 10, 2023. Also presenting are exciting companies such as K+S, 3U Holding and Altech Advanced Materials. Click here to go to the free registration.

    Varta: Not a buy even at this level?

    At Varta, on the other hand, analysts are much more skeptical. It has been almost a year since the battery manufacturer sent investors a profit warning. The Company had completely miscalculated its plans to set up production for e-car batteries, and then its core business collapsed. The consequence was liquidity problems and a share crash from over EUR 60 to under EUR 20. The share is currently trading at EUR 18. Has the bottom been reached, and is it time to buy? While the bottom may have been reached, prospects for price increases are lacking, at least according to DZ Bank. After the last quarterly figures, their analysts have increased the price target from EUR 10 to EUR 15, but the recommendation remains "Sell". The experts consider the Company's outlook for the second half of the year to be too optimistic. The analysts also fail to understand where the demand for the 2024 sales targets is to come from. Therefore, the forecasts are fraught with risks. Warburg Research analysts also view the outlook as ambitious. Their price target is also EUR 15, with a corresponding "Sell" recommendation.

    BYD: Unstoppable

    BYD's targets are also ambitious. However, the Chinese company is delivering. Most recently, the production of the 500,000th BYD Dolphin was reported. That would make the compact SUV the most-sold vehicle in its class in China since its August 2021 launch. And now, the all-electric SUV can also be purchased in Germany. According to its own figures, BYD has already produced more than 5.1 million passenger cars with alternative drives - i.e. fully electric or hybrid - worldwide. It will be exciting to see how the brand sells in Germany and the rest of Europe.

    And BYD is not only a leader in electric cars. The Chinese company is also going full throttle** with batteries, buses and other vehicles. Most recently, an order was reported from the US. BYD has delivered the first three K9M battery-electric buses to the Woods Hole, Martha's Vineyard and Nantucket Steamship Authority. The order is intended to help the US customer electrify its bus fleet step by step.


    The BYD share has not been able to benefit from the operational growth in recent months. This year, it has lost around 8% in value and is trading 30% below its all-time high from the summer of 2022. Almonty's share price of CAD 0.44 is also far from its highs. But with the commissioning of Sangdong, there is considerable share price potential. At Varta, there is currently a lack of prospects for sustainably rising prices.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
    For this reason, there is also a concrete conflict of interest.
    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author



    Related comments:

    Commented by André Will-Laudien on May 21st, 2024 | 07:30 CEST

    Blackout ahead! Artificial intelligence becomes a power problem: Plug Power, Nel ASA and Carbon Done Right Developments

    • Sustainability
    • renewableenergies
    • AI
    • CarbonCredits

    OpenAI has unveiled a new version of ChatGPT that communicates more humanely than any AI before it. Google is also rebuilding its search engine and will answer queries with AI-generated summaries in the future. According to experts, the boom in such tools could soon lead to network overload or even a blackout. This is because AI applications consume an enormous amount of power in data centers. The energy consumption of an AI-generated question differs from a normal search engine entry by up to a factor of 10. This puts the energy transition at risk, as full electrification will require more and more electricity for electric vehicles, heat pumps and electricity-based industrial solutions, which politicians want to come from renewable energy sources. However, the International Energy Agency predicts that the electricity demand will increase by 80 to 150% by 2050. The stock market evaluates energy companies according to their return potential without any ideological bias. Where are the opportunities for investors?

    Read

    Commented by Armin Schulz on May 21st, 2024 | 07:15 CEST

    K+S, Globex Mining, Barrick Gold - Commodity stocks: Make money now

    • Mining
    • Gold
    • Commodities
    • fertilizer

    The commodities market in 2024 is characterized by high volatility, driven by strong demand, supply bottlenecks, and technological shifts to renewable energy, which make lithium and copper, for example, more expensive. In addition, inflation concerns make precious metals attractive as a hedge against inflation, while the central banks' interest rate policy is also a factor. Geopolitical tensions further disrupt supply chains and drive up prices. In this context, investments in commodity shares are becoming increasingly important. This form of investment allows investors to benefit indirectly from price fluctuations and the increase in the value of commodities without having to physically invest in the commodities themselves. We are, therefore, looking at three commodity companies today and analyzing their potential.

    Read

    Commented by Stefan Feulner on May 21st, 2024 | 07:00 CEST

    Lynas, Almonty Industries, General Motors - Is the trade war escalating, and what is Tesla doing?

    • Mining
    • Tungsten
    • Electromobility
    • RareEarths

    The stock markets continue their record-breaking run. The Dow Jones Industrial has climbed to the 40,000-point mark for the first time in its history, and the DAX is also on the verge of breaking through the 19,000-point barrier. So far, so good, one might say. However, something is brewing in the background with regard to the trade war between the US and China, which could put enormous pressure on company margins in the future. As a result, critical commodities, in particular, are likely to be on the verge of a strong upward impulse.

    Read