November 9th, 2022 | 11:11 CET
Energy supply in Germany: Nordex, Siemens Energy, TubeSolar, JinkoSolar - With green power ahead!
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"[...] Recovery rates of more than 90% rare earths are another piece of the puzzle on the way to the economic viability of our project. [...]" Craig Taylor, CEO, Defense Metals
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
JinkoSolar - China shows how it is done
Thanks to German technology exports, China has built strong competitive positions in many economic sectors over the past decades. This is due to favorable location factors, such as state-subsidized energy prices and low labor costs. In the high-tech sector, however, the Far Eastern country has another huge advantage: access to sensitive raw materials. The Middle Kingdom can supply 85% of all critical high-tech metals, including rare earths, from its own stocks. Europe, which is poor in raw materials, therefore has the main problems with supply chains.
It is therefore not surprising that the global market leader for solar panels comes from China. Shanghai-based JinkoSolar was founded in 2016 and today has over 25,000 employees. As one of the largest manufacturers of solar products, JinkoSolar has established a global center for research and development together with leading universities. The figures for the 3rd quarter of 2022 confirm the high growth. Shipments reached about 10.86 megawatts, up 117% from the same period last year. Revenues increased by 128% to 19.52 billion yuan due to increased sales prices after an already huge increase of 138% in the previous quarter. Operating income stabilized again at 63.1 million yuan after a loss of 289.1 million yuan in the previous quarter due to skyrocketing procurement prices and power rationing. The treasury is bulging with a lush 14.9 billion yuan after the IPO of the Jiangxi subsidiary could be realized in early 2022.
From the high of around EUR 77, the Jinko share has already weakened by 40%. However, since mid-October, the share has gradually stabilized at the current EUR 49. With over 20% per annum growth, the GreenTech company is no longer too expensive, with a 2023 P/E ratio of 8.
TubeSolar AG - Green power from Bavaria
Not far from the Bavarian high-tech metropolis Munich, TubeSolar AG from Augsburg pursues an energy generation approach with charm. The technology consists of a combination of solar and shading technology. The Company manufactures innovative and patented solar panels consisting of wafer-thin PV films used in glass tubes. The highlight: the so-called Agri-PV system is used on agricultural land and combines modern shading technology with significant advantages in irrigation and protection against drying out. The advantages over classic flat modules include the light and water permeability of the modules, a reduced load-bearing capacity with corresponding structural advantages for elevation and, in particular, the possible dual use as a PV system and agricultural cultivation area. The principle is simple and no less obvious. With the climatic development of the last years, extreme weather situations occur, which are occasionally too much sun or too little water. Due to years of soil compaction, intermittent water in the case of heavy rain is a horror event for agriculture, as valuable plants are destroyed, and the large amount of water runs off unregulated. Soils continue to remain too dry after watering.
The Company is the result of a successful transformation of the former OSRAM®/LEDVANCE® fluorescent tube production to the current photovoltaic tube production in Augsburg. The patented technology has been used to manufacture innovative thin-film tubes since 2019 and is now certified by TÜV Rheinland in October 2022. Currently, TubeSolar is raising new investor funds. For this purpose, the photovoltaic specialist is issuing a new 2% convertible bond with an equivalent value of EUR 8 million and a term until 2026. The conversion price per share is EUR 5.50, with shareholders being granted the statutory subscription right.
TubeSolar's share price is down around 20% this year, but the raising of new debt has not hurt the share price. With the additional capital, the high investments can be managed because, after all, the production in Augsburg is to be expanded to an annual capacity of 250 MW in the medium term. The first output is expected as early as next December. The share has been trading at around EUR 4 for some time, but with the start of production, it should also attract sustained attention from ESG funds. Overall, TubeSolar is an interesting addition to the green portfolio.
Nordex versus Siemens Energy - Which energy stock to add to the portfolio?
The first signs of life are coming from the much-maligned GreenTech stocks Siemens Energy and Nordex. Both shares suffered 40 - 60% losses in the last 12 months. However, the German growth stocks were recently able to escape the constant downward pressure on the NASDAQ and are successfully continuing the bottoming out that began a few weeks ago.
Nordex had raised fresh capital from the scolded shareholders several times in 2022. With three profit warnings in a row, the Company now believes it will become adequately profitable again in 2024. The linchpin for the Hamburg-based company's sustained success remains the high cost of upstream products, a lack of personnel and constant disruptions in the supply chains. The wind turbine manufacturer received significantly fewer orders in the 3rd quarter than in the previous quarter, with the order volume falling from 1,829 to 1,441 megawatts. However, the price per megawatt of rated output rose sharply from EUR 0.69 to 0.90 million. One can therefore look forward to the announcement of the figures on November 15, 2022, and see what is left on the bottom line.
After separating from the Russian turbine business, Siemens Energy will also continue to deal with the complete integration of the Spanish subsidiary Siemens Gamesa. It has now been announced that it will completely take over its wind power subsidiary for around EUR 4 billion. Siemens Energy owns around 67% of Gamesa and is now offering EUR 18.05 per share for the remaining shareholders in order to achieve a qualifying majority. The timetable until the end of the year will be tight, but the costs for the integration should already be accrued in the expected annual figures on November 16. After this show of strength, better times may be ahead for Siemens Energy, as its core business is healthy and has been churning out good profits for over 100 years.
The stock market is adjusting to the new circumstances. Inflation, rising interest rates and less growth are the parameters of the coming years. For companies, this means fewer sales at higher prices, and profits are not fixed per se. That is because input factors are becoming more expensive daily, while sales depend on consumers' available household budgets. Green energy is now becoming a topic of the century, so for investors, it seems advisable to add the right protagonists to their portfolio. It is essential to diversify wisely because then the risk is reduced.
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