08. September 2021 | 11:57 CET
Central African Gold, Nordex, NIO - The potential of sustainability
The topic of sustainability is increasingly on people's minds. Five years ago, the subject was not even interesting to most. Now, more than 80% of people are thinking about it. Companies' customers spend more money if a product is sustainable; it is a sign of quality and gives them a positive image. If you use sustainable electricity and use resources sparingly, you can also save costs. All these are reasons why renewable energies and e-mobility are currently becoming more and more important.
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ISIN: CENTRAL AFRICAN GOLD INC. | CA1523761098 , NORDEX SE O.N. | DE000A0D6554 , NIO INC.A S.ADR DL-_00025 | US62914V1061
Central African Gold - Money from emission certificates
The Canadian Company Central African Gold (CAG) explores and develops high-grade cobalt, nickel, and copper projects worldwide. Currently, it owns six concessions at the King Luba project, located in the Central African Copperbelt, in the Democratic Republic of Congo (DRC). The country is known for its rich deposits of key raw materials for sustainability issues. The DRC has long been associated with child labor and environmental pollution, but the tide has turned since the 2018 presidential election. Since then, attention has been paid to people and the environment in commodity projects.
An example of this is the Company's announcement on August 18 that it plans to generate revenue from carbon credits in the short term. It could monetize 160 sq km of forests and farmland. For this purpose, the Company is working with experts in the field of accreditation of emissions certificates. In addition, a private placement of 8 million shares at 0.15 Canadian dollars (CAD) was announced, which is expected to bring CAD 1.2 million into the Company's coffers. In an effort to diversify, the Company announced on June 29 that it had signed an agreement to acquire an interest in the Musefu gold project. The project has already produced gold, and a due diligence process is currently underway. If this is positive, the stake can be acquired for 8.5 million shares of CAG and a smaller cash payment.
The experienced management around the Congo-born CEO Yves Kabongo follows a clear plan to gain a foothold in DRC. The Company's ESG orientation will help it acquire more projects as well. Currently, there are 38 million shares, which corresponds to a current market capitalization of around CAD 5.9 million. Interested investors should strictly limit their orders due to the large spread.
Nordex - Good figures, but share still not recovering
Since the surprising capital increase announced at the end of June, Nordex has not been able to get going. Even the good quarterly figures published on August 12 did not allow the share price to rise. Sales in the first half of the year increased by 32% year-on-year, and an EBITDA of EUR 68.4 million was achieved, corresponding to a margin of 2.5%. In contrast to the competition, the management maintained the forecast for 2021.
On September 6, the Company announced a 6 megawatt (MW) turbine to its product portfolio, which delivers up to 7% more yield than its smaller 5MW sister. It is said to have a service life of 25-35 years. To improve its turbines, the group now also uses sensors to monitor the turbines and optimize their operation. In this way, failures can be avoided, and, in some cases, the maintenance technician is not needed.
On August 17, the share marked its last low at EUR 14.72. On April 6, the share price was almost twice as high at EUR 27.37. According to management, the second half of the year is expected to be significantly better than the first. That is probably one of the reasons why CEO Blanco Diéguez recently bought Nordex shares. The order books are full, but margins are still thin, and the Company is struggling with increased raw material prices.
NIO - Supply chain problems
Even though most of the world's chips are made in China, even Chinese automakers like NIO are not immune to a chip shortage and supply chain issues. This was evident from the August shipments, which were 25% lower than the July figure, although 50% higher year-on-year. The question now is how long will it take the Company to get these problems under control.
Production capacity could be doubled to 240,000 vehicles by 2024 through an agreement with Jinghuai Automobile Group. The group also wants to become more present in Europe, and the first batch of electric SUVs was shipped to Norway for this purpose. If sales in Europe work as well as in China, there are tremendous growth opportunities. However, the Company is currently troubled by the death of a 31-year-old man who was using the e-car's semi-automated driving system. Chinese traffic authorities are investigating the case.
The stock weighs in at a more than USD 60 billion market capitalization, even though the Company is not yet profitable. At the beginning of July, the share was still at USD 55.13; currently, it can be had for USD 40.37. As an investor, you should be prepared for fluctuations in this share. There is no longer any doubt that e-cars are the future. The only question is who will be the top dogs.
Sustainability is becoming more and more critical for all companies. Those who simply continue as before will have to buy CO2 certificates and lose their customers in the long run. Central African Gold is committed to sustainability and wants to supply raw materials to implement the sustainability trend. Nordex needs to work on its margins. Despite the market punishing the stock a bit, the board believes in the Company and is buying shares. NIO is active in the emerging e-car market and should return to its growth path as soon as possible. Problems with the driving system could be a setback.