Close menu




December 1st, 2021 | 10:44 CET

Defense Metals, Aixtron, TUI - Winners or losers?

  • RareEarths
Photo credits: pixabay.com

Supply chain problems have hit many industries hard in the wake of the Corona pandemic. Essential parts and components were missing, and as a result, production lines at automotive manufacturers, among others, came to a standstill. In addition, raw materials and components such as chips have become much more expensive. Now, in the wake of the new wave of the pandemic, there are signs that the situation will worsen. Who are the winners, and who are the losers?

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: DEFENSE METALS CORP. | CA2446331035 , AIXTRON SE NA O.N. | DE000A0WMPJ6 , TUI AG NA O.N. | DE000TUAG000

Table of contents:


    Defense Metals - Results of Preliminary Economic Assessment published

    Rare earths are critical to technological innovation and are used in a wide range of industries. However, the market dominance of China, which mines over 90% of all rare earths, poses a risk. There is a global agreement to support production development outside the People's Republic to provide greater certainty for supply chains and avoid a price explosion. However, this is a long-term process, and it takes years to develop projects to production readiness.

    In the running is the Canadian exploration company Defense Metals, developing the Wicheeda Rare Earth Project covering some 1,700 hectares in British Columbia. Recently, the Canadians published the Preliminary Economic Assessment (PEA) results and an updated mineral resource estimate. Overall, the results were positive.

    The updated mineral resource estimate for the Wicheeda project includes an indicated mineral resource of 5.0 million tonnes at an average grade of 2.95% TREO and a suspected mineral resource of 29.5 million tonnes at an average grade of 1.83% TREO. The new resource represents an increase of 36%. The value of the project (pre-tax net present value) is USD 765 million before tax and USD 512 million after-tax, resulting in satisfactory returns. The pre-tax internal rate of return (IRR) is 20%, and the after-tax IRR is 16%.

    Commenting on the recent progress, Dr. Luisa Moreno, Director, said, "The Wicheeda project exhibits three key aspects of a successful rare earth project. Favorable mineralogy with predominantly coarse-grained minerals of the bastnasite family, a metallurgical process that achieves a high-grade flotation concentrate, and excellent infrastructure in a mining-friendly jurisdiction. With the positive PEA, the project is one step closer to production."

    With the preliminary economic assessment, Canadians were able to mark a new milestone. Expanding the resource is only a matter of time. With new drilling and the most up-to-date drill data, which should be available in the first quarter of 2022, it should be possible to increase the project's profitability significantly. Currently, the Company is valued at CAD 29 million. Given the strategic importance of rare earths and growing demand, which should lead to rising prices in the medium term, investors should put the stock on their watchlist.

    Aixtron - Full order books

    The equipment manufacturer for the semiconductor industry is currently riding a wave of success. Aixtron is benefiting from the high demand for fast data transmission and LED applications and the increasing need for efficient charging technology. Laser chips for optical data transmission and 3D sensor technology, which smartphone manufacturers use for facial recognition and carmakers for scanning their surroundings, are in high demand.

    In the third quarter, the Aachen-based Company reported a doubling of sales to EUR 130.8 million. The operating result (EBIT) multiplied to EUR 36 million, compared to EUR 5.6 million in the same period last year. A good quarterly performance and full order books allowed the Company to confirm its outlook for 2021. Sales of EUR 400 to 440 million with an EBIT margin of 20% to 22% are to be achieved. At prices around EUR 18, almost a third below the high for the year, the specialty machinery manufacturer is valued at around EUR 2 billion. Analysts believe the share has an average upside potential of 32%.

    TUI - Downward pull

    For a short time, the travel industry was able to benefit from a recovery. Now, with rising infection figures once again, lock-downs and travel restrictions, difficult winter months are again just around the corner. Recently, this can also be seen in the chart picture of the TUI share. Even if the president of the travel association DRV, Norbert Fiebig, remains a steadfast optimist, the downward trend of shares in the travel industry is likely to continue at first.

    "However, the uncertainty as to how the situation will develop is once again leading to a discernible reluctance to make booking decisions," said Fieber, looking to the future. "For the coming summer, however, we are optimistic and hope that we will continue to approach the pre-Corona sales level. However, we do not expect a sustainable recovery for the travel industry until 2023." Analysts consider the stock to be exhausted, with an average price potential of just 8%. It remains exciting to see whether the Group, valued at EUR 2.6 billion, will be able to return to profit next year as previously forecast.


    The stock market is not a one-way street. Investors are experiencing this once again with the TUI share. For the time being, the pandemic should continue the downward trend here. On the other hand, Aixtron is on the winning side. Business is excellent due to high demand. Defense Metals was able to mark an important milestone on the way to the production of rare earth metals with the results of the Preliminary Economic Assessment. The Canadians have good cards in the medium term to build up a sought-after, rare earth mine.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on news.financial. These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.


    Der Autor

    Carsten Mainitz

    The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.

    About the author



    Related comments:

    Commented by André Will-Laudien on September 26th, 2023 | 07:45 CEST

    Artificial Intelligence in Sellout! Nvidia, Defense Metals, ARM Holdings - Nothing works without rare earths!

    • Mining
    • RareEarths
    • AI
    • chips
    • Investments

    After long bull market movements, the stock market usually tends to rotate sectors, or the market enters a general consolidation. In the former case, investors can profit by reallocating their assets while exploring new investment opportunities. In the latter case, all stocks come down, and the capital market generally suffers from a change in sentiment and corrects recently exaggerated valuations. In the case of the new megatrend of Artificial Intelligence (AI), the stock market seems to sense a great need for correction. As if by magic, the blockbuster stock Nvidia rose by 250% in just 9 months. However, it has already retraced nearly 20% from its peak. Where do the opportunities lie for investors?

    Read

    Commented by Armin Schulz on September 12th, 2023 | 08:05 CEST

    NVIDIA, Defense Metals, Alibaba - Tensions between China and the US are on the rise again

    • Mining
    • RareEarths
    • chips
    • Investments

    During the BRICS summit, it was announced that six new countries will join the alliance on January 1, 2024. These countries include Saudi Arabia, Iran, the United Arab Emirates, Argentina, Egypt, and Ethiopia. This development might not sit well with the United States, as it could threaten the dominance of the US dollar. In addition, there are tensions with China over Taiwan. In July, the Middle Kingdom limited exports of rare earths. China has now added fuel to the fire by banning government officials from using iPhones. Before this, the US restricted exports of NVIDIA's AI chips to the Middle East. Tensions are rising, making it a good time to look at three companies affected by these developments.

    Read

    Commented by Stefan Feulner on September 8th, 2023 | 07:00 CEST

    Meeting climate goals in conflict: Who benefits from China's raw materials dominance? Rheinmetall, Defense Metals, BYD

    • Mining
    • RareEarths
    • Electromobility
    • armaments

    In the ambitious pursuit to meet climate targets, both political and economic players are taking a risky step. The rapid shift away from fossil fuels in favor of alternative energy sources is leading to a marked increase in the consumption of metallic raw materials that are essential for building renewable and energy-efficient systems. In particular, copper, cobalt, nickel and rare earths, whose imports come mainly from China, are experiencing rising demand. Moreover, with the outbreak of the conflict in Ukraine, the defense industry's interest in these resources is intensifying. Producers of critical metals outside of China could emerge as winners in this development.

    Read