February 15th, 2022 | 11:14 CET
Delivery Hero, dynaCert, KWS Saat - Fallen angels
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Delivery Hero a falling angel
Once again, a stock that was one of the stock market stars due to the Corona pandemic topples. The foodservice Delivery Hero seamlessly joins the ranks of fallen profiteers such as Netflix, TeamViewer and Peloton. The disappointing figures for the past fiscal year and the outlook for the current year 2022 were the last straw. Although the Berlin-based Company exceeded its growth targets for the past year, with a profit margin of minus 2.2% in relation to sales and a reported loss of EUR 781 million, this price is too high for analysts and investors. Further horrendous losses in the millions are forecast for the current year.
Following a dramatic drop in the share price of more than 40% overall, the German Federal Financial Supervisory Authority (BaFin) is now investigating the matter. According to the supervisory authority, the examination routinely "also includes possible violations of transparency obligations". This was communicated by a BaFin spokeswoman to the "Wirtschaftswoche". In addition, with a market capitalization of just over EUR 10 billion, the Company is threatened with relegation to the MDAX. Daimler Truck is already in line to move up. The Company only went public in mid-December following the spin-off of the Daimler Group. The composition of the DAX is regularly reviewed on fixed dates, the next being March 3.
dynaCERT - Still in a downward trend
Although the sell-off of the Canadian Company did not take place within two trading days, as was the case with Delivery Hero, this should be more than the same for concerned investors. Since February of last year, the Canadian Company, which produces and sells technologies to reduce carbon dioxide emissions, has fallen more than 60%. However, the reasons for the crash lie less in the technologies quality and more in the lack of a breakthrough towards commercialization and the mass market.
For more than 17 years, dynaCERT has been developing and finally marketing the globally active and patented Carbon Emission Reduction Technology. It focuses on reducing emissions and improving fuel efficiency. The resulting HydraGEN product is used in internal combustion engines, currently focusing on heavy vehicles. Here, the electrolysis unit produces water and oxygen and thus optimizes fuel combustion, resulting in a reduction in fuel consumption and emissions of up to 19%.
In addition, HydraLytica, intelligent software that records and analyzes consumption, has been developed. The saved CO2 can be converted into corresponding certificates and sold by the fleet companies. In this context, the potential for the next few years is virtually inexhaustible due to the CO2 reduction targets set at around 100 million vehicles. As a result, sales have been rolled out globally to 38 countries. The stock market value of dynaCERT is currently EUR 54.10 million. If major orders are landed, the share could start to rally.
KWS Saat - Decent results, strong outlook
The situation at KWS Saat is currently quite different. The Einbeck-based Company is the world's fourth-largest seed producer by sales of crops. It successfully closed the first half of fiscal 2021/2022 with a 32% increase in net sales. However, at minus EUR 128.50 million, free cash flow was significantly below the previous year's figure due to the increase in working capital. Against the backdrop of the KWS Group's strong growth, both trade receivables and inventories rose sharply.
"The high growth rates in the first half of the year confirm our long-term corporate strategy geared to innovation and diversity of varieties," commented Eva Kienle, Chief Financial Officer of KWS. "Against the backdrop of our strong business performance, we are pleased to be able to raise our forecast for the year significantly at the halfway stage."
For the full fiscal year, KWS Saat is raising its forecast for net sales growth to between 9% and 11%. Previously, the estimate was between 5% and 7%. The EBIT margin is still expected to be around 10% and adjusted for non-cash effects from purchase price allocations as part of company acquisitions, in a range between 11% and 12%. Despite the positive figures, the stock lost more than 2% and is currently struggling with the support area at EUR 66.00. In the long term, however, it offers a solid investment.
Another profiteer, the food delivery service Delivery Hero, has faltered and lost not only shareholder confidence but also around 40% of its stock market value. At dynaCERT, investors are waiting for the roll-out, and KWS Saat could increase its forecasts.
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