10. June 2021 | 10:25 CET
BYD, Varta, Deutsche Rohstoff: These are the stocks of the future
New technologies are turning the markets upside down. Electromobility is fundamentally changing the automotive industry. Whereas in the past, it was engine technology that mattered, today, it is the batteries that determine which cars are considered modern and which are not. The trend toward renewable energy sources is also changing as wind turbines and solar cells require many different raw materials and drive demand. We highlight three companies along the supply chain.
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ISIN: CNE100000296 , DE000A0TGJ55 , DE000A0XYG76
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
BYD: The fair has been read
A few months ago, the Chinese carmaker BYD was following in Tesla's footsteps. The exciting models and spectacular share price were the talk of the world. But in the meantime, a little calm has returned to BYD. On a three-month horizon, a profit of 13.8% is on the books, but that is not enough for BYD investors who are used to success. In the past three years alone, the value has gone up by 267%. But it looks as if the stock has skimmed off most of its potential.
Still, BYD is a good company. The Chinese have their own battery division and even make their own chips. The latter has repeatedly been in short supply in recent months. In part, the low chip supply even influenced the production of large carmakers. BYD does not have these problems. Since the subsidiaries are to be listed separately on the stock exchange, this creates further potential for BYD: The Company secures capital in this way without completely relinquishing its influence - a wise step for the future. All that is needed now is for customers to continue to take hold diligently. Although BYD's sales have increased significantly in recent years, the Company still lags behind the industry's big players. As these long-established automakers are now also going electric, the competition for BYD is growing. The Company has good preconditions - but the share may already have its very best days behind it.
Varta: Much uncertainty
The situation is similar for German battery manufacturer Varta. In the past three months, the share has experienced ups and downs. It is currently trading at EUR 130, well below its high for the year of EUR 180. The specialist for button cells and other batteries wants to play an important role in the electrification of the German automotive industry and produce batteries itself. Pilot production is to be in place by the end of the year. The first customer is said to have already been acquired - but the Company has not yet provided any details.
Looking to the future, it is still uncertain when the new business with batteries for electric cars will generate profits. What does seem clear, however, is that investments will be necessary in advance. Varta has a proven technology and benefits from the popularity of headphones and other small devices. The energy experts also have solutions for medical technology. However, the share is trapped in a sideways movement. The high volatility of recent months makes a chart-technical interpretation of the situation at Varta difficult. Uncertainty dominates here. These are poor conditions for investment.
Deutsche Rohstoff is heading for the dividend
The chart picture for Deutsche Rohstoff AG is different from that of Varta. The Company is looking at a stable upward trend - in the past three months alone the share price has increased by almost 30%. Deutsche Rohstoff AG produces oil in the USA. Last year, a subsidiary of the Company in Wyoming also succeeded in purchasing production areas on favorable terms. In addition to the oil business, Deutsche Rohstoff AG also has a stake in Almonty Industries, which has a producing tungsten mine in Southern Europe and recently celebrated the topping out ceremony of its Sangdong tungsten mine in South Korea. This project is considered the largest tungsten mine outside China and could make a notable contribution to the Company's success. Other investments include tin and rare earths.
In fiscal 2020, Deutsche Rohstoff AG delivered sales of EUR 38.7 million and EBITDA of EUR 23.9 million. In 2021, the Company expects even better figures and recently reported an excellent start to the year. A good fiscal year 2021 should also lay the foundation for a dividend, which the Company could pay out again for the first time next year. The Deutsche Rohstoff AG share offers access to various promising commodities, has been on the market for many years and is suitable for German investors as an alternative to foreign companies. The share has left the crisis behind and could now head for the EUR 20 mark.