12. May 2021 | 10:20 CET
BYD, Volkswagen, NewPeak Metals: Who benefits from electromobility?
Scarcity rules in Germany. A year ago, it was noodles, canned food and toilet paper. Today, it is down to the last detail: building materials, metals and other essential materials are in short supply and correspondingly expensive. The first joineries have even had to cancel orders that were calculated months ago - wood has become too expensive. The automotive industry is also driving demand for basic materials, especially critical metals for batteries. We outline the investment stories of two carmakers and get to the bottom of the question of how raw material shortages can be countered.
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ISIN: CNE100000296 , DE0007664039 , AU0000104374
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BYD: Are the Chinese losing ground?
The Chinese carmaker BYD has a good name worldwide. Just a decade ago, the Company was a beacon of hope for a far-off future. But what was once the music of the future has become the sound of the times. In many countries, electric cars have long been part of the street scene - including Germany. It is even much more accessible to register an e-car in urban centers than a combustion engine in China. The reason for this is the sometimes high levels of air pollution. In addition, the traditional automotive industry is also focusing more and more on electric drives. The question is whether newcomers, such as BYD, will not be pushed back into their niche by the new offering. Even in China, German premium brands still enjoy a better reputation than domestic makes.
BYD's stock has been plummeting for months. In the past three months, the value has fallen by almost 50%. Although one must counter that BYD has also risen strongly before, the price losses are increasingly causing unrest among private investors. BYD offers battery production in addition to a car division and can market these batteries to other manufacturers as well. Thanks to its large share of the value chain and favorable access to critical raw materials, investors should not write BYD off lightly. In the short term, however, the stock seems to have run out of steam. The best thing to do is to wait for a bottom to form.
Volkswagen: Why the share is a force to be reckoned with
The Volkswagen share has also lost ground in recent weeks - but under entirely different circumstances. While BYD has already fallen to its knees on the stock market, VW shares were still flourishing - in the past three months alone, the Wolfsburg-based Company gained close to 50%. Volkswagen has announced an e-car offensive and also wants to invest more in supply chains. The goal is to be less dependent on China and play a more vital role in e-cars in the future. From 2026, Volkswagen no longer wants to build pure combustion engines. The first e-car for under EUR 20,000 is to be launched on the market as early as 2024. It seems that the Wolfsburg Company is serious about its visions. The plans have been well received by the market. The share broke out of a long-term sideways trend in February. Given this revaluation, investors who are currently standing on the sidelines should first wait for a bottom to form. Volkswagen is a force to be reckoned with - even after the mobility turnaround.
NewPeak Metals: Many projects, small market capitalization
One company that is well-positioned around critical metals and especially gold is the Australian mining Company NewPeak Metals. The experienced team, which includes SolGold CEO Nick Mather, takes an interesting investment approach. The Company has early-stage projects in Argentina, New Zealand, Finland and also Sweden. It also holds shares in an Australian oil company. What sounds like a colorful potpourri at first glance makes sense at second glance. Thanks to the early stage of the projects, significant discoveries can already be made there with little funding. Thus, NewPeak Metals wants to increase the value of its properties step by step and let shareholders profit. In Argentina, the Company is advancing two gold projects. The Cachi project, in particular, has already produced promising exploration results and gold deposits visible to the naked eye. In the coming months, the Las Opeñas project in the Argentinean province of San Juan is to be explored in more detail.
Further work in Scandinavia is to follow in the summer. There, the Swedish Bergslagen project is of particular interest, where other critical industrial metals are suspected in addition to tungsten. Above all, the location within the EU could be an advantage for NewPeak Metals, as the economic area has recognized the need to be self-sufficient in certain raw materials. A large number of projects also offers the opportunity to act flexibly regarding possible financing, dispose of properties, or bring joint venture partners on board. The share is an insider's tip given the extremely low market capitalization of around EUR 10 million. Even a few good drilling results could ensure that each project is valued at a multiple of the current market capitalization. In addition, the Company's portfolio guarantees regular newsflow. The share is highly speculative but has hardly run so far. Speculative investors can add the stock to their watchlist.