Danger at Rheinmetall and OHB! Is HPQ Silicon a Buying Opportunity?

Market Reality and Strong Order Books: Rheinmetall and OHB in Consolidation Mode

The defence and aerospace sector finds itself in what is, admittedly, a rather peculiar situation. On the one hand, order books are bulging; on the other, the stock market has recently seen significant sell-offs. The Düsseldorf-based defence group Rheinmetall, along with other industry players, is feeling the pressure from a nervous overall market. Rising energy costs and escalating geopolitical tensions in the Middle East over the last few days and weeks are prompting investors to take profits, even though the fundamental demand for defence equipment remains strong. It is precisely in this environment that we see how sensitive high valuations can be to external disruptive factors.

This was also evident most recently at the Bremen-based aerospace group OHB. The company reported outstanding news. OHB secured a major contract worth just under EUR 1 billion for the planned European satellite constellation Iris2 via the operator SES. The Bremen-based company is to supply a total of 18 satellite platforms to enable data transmission starting in 2030. The stock market initially reacted with a rise to over EUR 200. However, the enthusiasm lasted only a few hours before significant selling pressure set in, pushing the share price down by just under 10%, leaving the share trading in the region of EUR 180.

Market observers, however, do not regard this slump as an admission of operational failure, but rather as a classic reaction to a sharp rise in valuation. The OHB share price had multiplied within a few months. It is clear, then, that the valuation needs time to catch up. Operationally, the company is on solid ground. In the first half of 2026, total turnover climbed by 11% to EUR 627.9 million. Adjusted earnings before interest and tax rose by as much as 46% to EUR 38.9 million. With an order book of over EUR 3.3 billion and a strengthened capital base, the fundamentals remain solid. Furthermore, the strategic partnership with Rheinmetall on Bundeswehr projects such as SATCOMBw 4 reinforces the key role of both groups in Europe. The recent share price losses therefore appear more like a necessary consolidation following the sharp rise. From a technical analysis perspective, if OHB manages to break through the EUR 270 mark, it could resume an upward trend and target EUR 500. However, things do not currently look likely to go that way. It will therefore be important to find a stable, sustainable floor at perhaps EUR 170–180, or even lower, at EUR 150.

Canadian Pioneering Spirit for the Energy Transition

Away from OHB and Rheinmetall, a smaller specialist stock is manoeuvring itself into a potentially interesting position. We are talking about the Canadian company HPQ Silicon.

HPQ Silicon aims to bring advanced materials for the energy transition to market readiness. A glance at the company's current presentation shows that it is by no means relying on just one horse in the stable. Instead, the portfolio rests on three strong pillars. Firstly, HPQ is developing highly advanced silicon anode materials for lithium-ion batteries in collaboration with its French partner Novacium, in which it holds a 36.8% stake. Secondly, the company is working in a joint venture with PyroGenesis on a new reactor process that converts quartz directly into pyrogenic (fumed) silica in a single step. This is complemented by innovative processes for decentralized hydrogen production.

The technological advances in the battery sector sound impressive. The GEN3 cells developed exceed conventional graphite standards in terms of storage capacity by around 45%. The newer GEN4 generation achieved capacities of over 7,000 milliampere-hours in the standard 21700 industrial format, with an energy density of just under 320 watt-hours per kilogram. This puts HPQ well ahead of its competitors. With its silicic acid reactor, HPQ is targeting a gross margin of around 70% by eliminating energy-intensive intermediate steps, thereby tapping into a market worth billions.

News from last month proves that these technologies are not merely theoretical. On August 19, HPQ and Novacium, via their partner LN Innov, announced a decisive milestone. For the first time, a commercial order was received for GEN3 battery packs for FPV drones, intended for a regiment of the French Army. This marks the material's leap from the laboratory straight into the demanding European defence supply chain.

Just one day later, on August 20, Novacium presented research findings on the so-called HyDRAS process at the prestigious COM 2026 conference. This process combines two problematic waste products from the aluminium industry: black slag and red mud. The result is truly astonishing, as the use of red mud doubled the hydrogen yield compared with previous trials and paved the way for an industrial-scale pilot project.

Finally, on August 27, more good news followed from the battery sector. HPQ and Novacium delivered a total of 30 bespoke battery packs to three different European drone manufacturers. Each manufacturer received 10 units for the final testing phase. If this evaluation proves successful, series production qualifications are on the cards in a European drone market which experts predict will be worth around EUR 14.5 billion by 2030.

From a technical analysis perspective, HPQ Silicon's share price currently presents an extremely interesting picture. Following a prolonged slump, the share is currently trading at around CAD 0.13, close to its lows. This means that all the positive news is not yet reflected in the share price. Solid support has established itself in the range of CAD 0.12 to 0.13, providing a buffer against further declines. From a technical perspective, and should further positive news emerge, there are strong indications that the share could then break out of this latest sell-off in a classic V-shaped recovery. Should it manage a dynamic breakout above the first resistance levels at CAD 0.155 and CAD 0.165 respectively, the share price could gain momentum rapidly. The next target would then be the upper boundary at CAD 0.20. Should the positive momentum continue and the market reward the latest successes, the previous high of CAD 0.24-0.25 would be within reach. A sustained break above this level would even pave the way towards CAD 0.30.

The two major heavyweights, Rheinmetall and OHB, have delivered strong operational performance and have well-filled order books. Their current price setbacks are primarily the result of sector-wide profit-taking and previously high valuations. Nevertheless, the consolidation phase may last longer than many experts fear. HPQ Silicon operates in a different segment and is on the cusp of moving from development to commercialization. With its promising position in the European defence supply chain and breakthroughs in hydrogen production, HPQ Silicon offers a potentially attractive risk-reward profile. If the stock manages to break decisively out of its current formation, the company could become particularly interesting for investors.