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January 28th, 2022 | 11:55 CET

Deutsche Bank, Memiontec, Texas Instruments - Worrying development

  • Technology
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The highly anticipated interest rate decision of the FED came as expected, and nothing will change in the interest rate level for the time being. It was only Jerome Powell's statements due to the urgency of the planned interest rate steps, intended to catch the runaway inflation, that brought the markets down. From a monetary policy perspective, society is facing a turning point. However, beyond money and the capital market, far more pressing problems need to be solved soon. Water scarcity, which denies some 2.2 billion people safe and sustainable access to clean drinking water, is taking on increasingly dire forms. Smart water management is one piece of the puzzle that could be a game-changer in this area.

time to read: 4 minutes | Author: Stefan Feulner
ISIN: DEUTSCHE BANK AG NA O.N. | DE0005140008 , Memiontec Holdings Limited | SGXE56008290 , TEXAS INSTR. DL 1 | US8825081040

Table of contents:

    Unstoppable demand

    It is a genuinely alarming wave that is headed toward humanity in the coming years and decades. According to Unicef, 2.2 billion people globally lack regular access to clean water. Around 785 million people do not even have a basic supply of drinking water. This situation is likely to worsen in the future for the sole reason that water consumption will continue to rise due to population growth. According to the World Population Clock of the German Foundation for World Population, as of August 25, 2021, around 7.89 billion people live on Earth. According to a UN forecast on world population development, Earth's inhabitants will increase to 9.74 billion by 2050 and 10.87 billion by 2100.

    Solutions in demand

    In many industries, mechanization is advancing rapidly, but in the area of water management, the clocks seem to be ticking more slowly. Around 90% of all wastewater worldwide is discharged untreated, polluting the environment and drinking water supplies. But there are the white knights of the industry. These will benefit disproportionately in the coming years, be it through the number of new orders or their enterprise value in general. The Singapore-based Company Memiontec is a welcome exception in this respect, and the entire industry can take a positive example from it. For around 20 years, the pioneer has been developing complete water and wastewater management solutions in China, Indonesia, and Singapore. Memiontec is listed on both the Singapore Stock Exchange and in Frankfurt and currently weighs in at EUR 95.31 million on the stock exchange. The share price trend, currently one share costs EUR 0.44, has been clearly upward since the middle of last year, as has the order intake. As of November, these totaled EUR 55.66 million - a record result.

    Pioneering work pays off

    The Group can look back on a success story of more than 20 years and has a solid and diverse customer base from various industries in the private and public sectors. The complete value chain is offered with a four-pillar model, which drives the scaling effects significantly upwards. In addition to providing total solutions, including maintenance contracts and selling modular and customized systems and equipment, the Build-Own-Operate-Transfer (BOOT) and Transfer-Own-Operate-Transfer (TOOT) segments are the long-term profit drivers. There are decades of contracts with joint venture partners in place here.

    BOOT projects on the rise

    BOOT projects involve investing with partners in the maintenance of water treatment infrastructure. At the BOOT project in Pekan Baru in Riau in Indonesia, it has already been possible to start selling water. At the same time, the Company is engaged in construction work for the Pekan Baru BOOT project, which involves rehabilitating and upgrading the existing water treatment plant. Once construction is completed, the plant's production capacity will be increased from the current 200 LPS to 500 LPS. At the Hutan Kota project in Indonesia, where commercial operations started in December 2019, the second production phase has begun, with water to be produced and sold at 100% of the nominal capacity of 450 LPS.

    In total, Memiontec has secured three BOOT projects in Indonesia, which will ensure the sale of water for 25 years, bringing recurring revenues to its coffers. The Company also plans to launch more long-term projects in other countries. From the perspective of the unfortunate rising trend of water scarcity, the Company should be watched more closely.

    Deutsche Bank continues on the upswing

    Deutsche Bank says goodbye to the 2021 financial year with its best results since 2011 and a profit in the billions. "We have sustainably brought Deutsche Bank back into the profit zone and onto a growth course. And, we have firmly resolved that nothing will divert us from this course," Group CEO Christian Sewing said on Thursday. He added that the start to the new year made him confident: "The first few weeks have already gone very well."

    As a thank you to the brave shareholders for persevering, a dividend of EUR 0.20 per share is also to be paid out again after 2 years. In addition, a share buyback program of over EUR 300 million in the first half of 2022 has been approved. Reactions to the excellent figures were euphoric from both investors and analysts. After the share corrected due to the overall negative market, it then gained 4.5% to EUR 12.10 following the announcement of the figures. The share will generate a new buy signal if it breaks through the resistance at EUR 12.57.

    Profiting from the chip shortage

    The US chip manufacturer Texas Instruments delivered strong results due to the high demand for semiconductors, exceeding analysts' forecasts. The technology group increased its revenue by 19% to USD 4.83 billion in the fourth quarter of 2021 due to demand from industry and the automotive sector. Profit grew by 27% to USD 2.14 billion.

    With the chip shortage expected to continue through 2022, the technology company's forecast was well above experts' estimates. Texas Instruments expects revenues of between USD 4.5 billion and USD 4.9 billion for the first quarter of the current year. In terms of earnings per share, the semiconductor manufacturer expects a range of USD 2.01 to USD 2.29 per share. Analysts' expectations are USD 4.4 billion and USD 1.90 per share. After initial price jumps of over 5%, the value gave up the gains in the course of trading due to the weak overall market. From a chart perspective, there is no reason to buy at the moment.

    Water scarcity will become an increasingly serious issue for our society in the coming years. Companies like Memiontec, which focus on intelligent water treatment plants, should benefit from this. Deutsche Bank is on the upswing after the restructuring measures. At Texas Instruments, the figures are convincing, but the market technology is less so.

    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 hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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