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August 15th, 2023 | 05:45 CEST

E-car flash in the pan or summit rush? The key players: Varta, Rock Tech Lithium, Almonty Industries

  • Mining
  • Lithium
  • Tungsten
  • Electromobility
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After a challenging climb, we often reap the rewards of our efforts - this is just as true on the stock market as it is after a day in the Alps. While clear skies, Alpine delicacies, and traditional hut festivities might be limited to holidaymakers, a lucrative reward beckons permanently on the stock exchange after thorough research. We look at how investors can navigate the recent price fireworks in e-car shares.

time to read: 3 minutes | Author: Nico Popp

Table of contents:

    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview


    Varta: Star or Underdog?

    German battery legend Varta had an exceedingly hard time during the past few quarters: the e-car fantasy fizzled out. The advance praise was too great, and the potential of the cooperation with Porsche was too small. After Varta had again corrected its forecast for the current fiscal year, the Company recently sent positive signals: 2024 could bring more dynamic growth and ultimately more than EUR 900 million in sales, according to Varta. On the stock exchange, this news triggered a jump in the share price and catapulted the SDAX-listed company upwards. On Monday, the stock held above the EUR 21 mark despite the rapid increase, which is indeed a reassessment by the market, considering the prices were around EUR 18.20 just last week. With the stock having traded at over EUR 80 a year ago, turnaround fantasy is in the air.

    Investors should nevertheless bear in mind that Varta is under competitive pressure and that batteries are currently a topic for many industrial companies. It is not yet clear which technology will ultimately prevail. Although different areas of application certainly offer scope for different technologies, German companies, like Varta, still remain underdogs in an international comparison.

    Rock Tech Lithium: Good strategy, but risks remain

    The Rock Tech Lithium share shows that a comeback is sometimes difficult. The Company anticipates high margins on a ten-year horizon. Currently, Rock Tech Lithium is building a lithium converter and wants to refine the "white gold" for industrial processing. Presently, the Company is still mining the raw material in Canada - in a comparatively environmentally friendly manner. In the long term, the Company has committed itself to the circular economy. This strategy is not only well received by the market, but Rock Tech Lithium could cut itself a big slice of the pie with its lithium converters and play a crucial role in the mobility revolution.

    Almonty Industries: Approx. 70% already funded - when will the market price out risk?

    Almonty Industries recognized years ago that critical raw materials will be the main factor in the transformations of the coming years. Tungsten, which can also play a role as a battery metal in addition to high-grade alloys and light bulbs, has so far come mainly from China. Almonty, which currently produces tungsten in Portugal, continuing a long tradition there, has developed a giant mine in the Sangdong project in South Korea that has what it takes to become one of the largest tungsten suppliers outside China. "June and July have been busy months at the Almonty Korea tungsten project, with the successful arrival of the protective screen and recovery feed following the arrival of the semi-autogenous grinding and ball mill in June," Almonty CEO Lewis Black said in an early August press release. "We are pleased to be able to access funds from our lending partner KfW as part of the project financing."

    Almonty has secured USD 75 million in project financing with Kreditanstalt für Wiederaufbau (KfW) 2021, which will cover approximately 70% of Sangdong's USD 105 million construction cost. Given the tight situation in the tungsten market and the market dominance of China, the chances are good that the project, which is already well-advanced, can be led to success.

    The share of Almonty Industries was still quoted at around EUR 0.75 last year - currently, it is EUR 0.38. Especially during complex construction projects, such as the construction of the Sangdong mine, the markets price in risks. In addition, the market environment has been weak for several months. However, if the start of production is successful, the market usually prices out risks again quickly. Speculative investors can take advantage of precisely this development. Since tungsten can also play a role in batteries and replace the controversial cobalt, the metal, the extraction of which is complex and requires expertise, certainly exudes esprit.

    When it comes to promising growth stocks, it is like climbing to the top of the Alps: only after the work is done do the rewards beckon. In the case of Almonty Industries, it currently seems as if not many investors have taken the trouble to thoroughly examine the Company's prospects - although the Company has long had its sights firmly set on the summit. While Varta faces big competition and Rock Tech Lithium needs to get its horsepower on the road first, Almonty Industries, valued at CAD 129 million, could be an insider's tip.

    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

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

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