24. March 2021 | 10:14 CET
Daimler, Kodiak Copper, SFC Energy - This will be expensive!
Germany is stepping on the gas! Stop, don't rejoice too soon. Unfortunately, it's not about the German government accelerating vaccination programs and fighting the Corona pandemic. Instead, domestic automakers have been causing a stir in recent days. A move away from internal combustion engines and the consistent expansion of the electric vehicle divisions should help them return to their old strength. However, the exceptionally high demand for the raw materials needed for electric mobility could lead to significant bottlenecks and dramatic price increases in the near future. The winners are clear.
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ISIN: DE0007100000 , CA50012K1066 , DE0007568578
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Daimler - Back on track!
Tesla and then nothing. That was the impression we had in recent years when we took a closer look at the market for electric cars. The few Chinese competitors could hardly match Elon Musk so far. Since last week, however, the German giants are officially rowing along to recapture the golden land, i.e. market leadership. Volkswagen made a start last week at the specially organized Power Day. The Company announced ambitious future goals. In 2030, the e-division is to contribute 70% of total sales. To this end, 6 gigafactories are to be built across Europe to manufacture electric batteries. BMW is also enthusiastic, but the Munich-based Company plans to capture "only" 50% of its sales with fully electric vehicles by 2030.
At Daimler AG, the plan was to eliminate diesel and gasoline engines by 2039. However, the disruption to the electric motor is now also to be targeted earlier. The Stuttgart-based Company's plan is not to develop a new generation of engines for internal combustion engines. The goal is to sell more than 50% electric and hybrid cars by the end of the decade. In addition, an electric alternative is to be offered for each segment as early as next year. The analyst firm JP Morgan likes Daimler AG's development and therefore issued a buy rating with a price target of EUR 92.00. Yesterday, the share was trading at around EUR 72.00. This would give a price potential of almost 30% here.
Kodiak Copper - In the middle of the supercycle!
Besides lithium, which is needed for the vehicles' batteries and is already in short supply, the demand for copper is also enormous. A car powered by electricity contains a staggering 183 pounds of copper, about 4 times more than an ordinary vehicle with an internal combustion engine. The enormous growth rates in the industry mean that the red metal is in short supply. There is also the fact that global production is currently handled by around 10 larger mines and another 20 smaller ones. New copper projects, on the other hand, are rare at the moment. One of the most promising projects is operated by the explorer Kodiak Copper from British Columbia. The 100% owned MPD project is surrounded by already producing mines such as Copper Mountain, Highland Valley and New Afton and therefore has an excellent infrastructure. In addition to the British Columbia project, Kodiak Copper also has another copper project in Arizona with excellent infrastructure.
Last year, Kodiak Copper presented excellent drilling results at the MPD project. Due to the success achieved, a private placement worth CAD 12.7 million was completed in October. As part of this placement, industry giant Tech Resources bought a 9.9% stake in the Canadian Company. In the current year, the drilling program is to be expanded significantly.
With cash on hand at CAD 14 million as of the end of December, the funds raised will provide 30,000 meters of drilling in several target areas. It will further allow for geophysical and geochemical surveys, prospecting and geotechnical studies on the fully funded MPD copper-gold porphyry project. The go-ahead was given last week. In addition, to gain better access to US investors and due to increased liquidity, Kodiak recently listed on the OTCQB in addition to the TSX Venture Exchange and the Frankfurt Stock Exchange. The positive long-term outlook makes Kodiak one of the most hopeful investments in the copper market. Kodiak lost more than 50% of its value from the high in September, and this correction once again offers a long-term entry opportunity.
SFC Energy - Heading for Asia
SFC Energy continues to grow as one of the leading suppliers of direct methanol and hydrogen fuel cells for stationary and mobile hybrid power solutions. To this end, the Munich-based Company has expanded its cooperation with Toyota Tsusho. The Asian partner will now take over exclusive sales of SFC hydrogen and direct methanol fuel cells in Thailand, the Philippines, and Vietnam. In addition, sales in China, the world's largest market, are to be significantly expanded. From a chart perspective, the SFC share corrected from a high of EUR 34.00 to EUR 23.23 yesterday. An important support line runs at EUR 22.00. Currently, the share price is showing weakness. If this zone is breached, investors have the opportunity to buy at EUR 18.00.