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June 25th, 2024 | 08:50 CEST

Euro 2024 Round of 16 - A Summer fairytale on the stock markets, too? BYD, VW, Power Nickel and Rheinmetall qualify early

  • Mining
  • Nickel
  • Electromobility
  • Defense
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Football has always been a great way to distract the masses. People love sports because it relaxes them even when they are just watching - a tried and tested remedy for the multiple crises that continue to spiral into our minds. Fortunately, the stock markets are trading so high that the looming banking crisis in China and Japan is not working its way through to Europe in the media. The EU financial markets have lost a lot of ground since the election because while the NASDAQ is rushing from peak to peak, the EURO STOXX is making an almost unnoticed 5% correction, and France is even down 10%. EU spreads on German government bonds widened further, a scenario that seemed to have been forgotten since 2008. And in football, Germany is hopeful going into the Round of 16, and our stock picks are also bursting with strength.

time to read: 4 minutes | Author: André Will-Laudien
ISIN: BYD CO. LTD H YC 1 | CNE100000296 , VOLKSWAGEN AG VZO O.N. | DE0007664039 , Power Nickel Inc. | CA7393011092 , RHEINMETALL AG | DE0007030009 , VOLKSWAGEN AG ST O.N. | DE0007664005

Table of contents:

    Terry Lynch, CEO, Power Nickel
    "[...] The collaboration with CVMR offers two primary advantages for Power Nickel: We can cover a larger portion of the value chain in the future, and despite the extensive cooperation with all its positive outcomes, we have remained significantly independent. [...]" Terry Lynch, CEO, Power Nickel

    Full interview


    Rheinmetall - Millions of rounds to be delivered

    The German armed forces have ordered additional artillery ammunition worth around EUR 8.5 billion from Rheinmetall, the largest single order in the Company's history. In addition, the Ministry of Defense intends to order 105 brand new Leopard 2A8 tanks. The tank weighs around 66 tons, can reach a top speed of 70 km/h and has a range of 450 km. This version also includes improvements in mobility and can overcome various obstacles, including vertical barriers and waters up to 4 meters deep. Rheinmetall acts as a key supplier to the manufacturer Krauss-Maffei Wegmann (KMW).

    The framework agreement between the Bundeswehr and Rheinmetall, which has been in place since July 2023, was worth around EUR 1.3 billion and has now been increased by a whopping EUR 7.2 billion. Deliveries are scheduled to begin in early 2025, according to Rheinmetall. "The customer will primarily be the Federal Republic of Germany, which will make some of the deliveries available to Ukraine," said Rheinmetall CEO Armin Papperger. Some of the tanks will be destined for the Lithuania brigade to protect NATO's eastern flank from a Russian attack. The Bundeswehr Equipment Office has yet to announce how the orders will be paid for, and there is no budget for them.

    All in all, of course, great news for Rheinmetall in Düsseldorf and the other 20 suppliers. Armaments are back on top - after decades of disarmament. This is a turning point for the Rheinmetall share price. After an overheating correction to EUR 475, the share price rose yesterday to over EUR 500. However, the all-time high of EUR 570 still seems to be some distance away. We can only hope that the Düsseldorf-based company is now well-positioned to cope with this flood of orders. The stock market is probably somewhat skeptical.

    Power Nickel - The polymetallic property takes off

    Tristesse is a foreign word for the Canadian polymetal explorer Power Nickel. Quadrupled in just three months is the share price performance of our top pick from Quebec. Blessed with the best mining jurisdiction in North America, the NISK project is progressing at great speed. Surprisingly good drilling results could provide a favorable solution to the critical global metal shortage. In an environment of significant geopolitical instability, industrial producers seek a secure supply of strategic metals. They have found what they are looking for with Power Nickel.

    According to available results, the NISK property hosts numerous high-grade intercepts in various industrial metals and gold. Power Nickel is now focusing on expanding the historic, high-grade nickel-copper-PGE mineralization with a series of drill programs. What can be found on the neighboring properties should be of particular interest. The partnership with the CVMR processor will significantly increase the quality of the nickel sales. The prospect is located close to Quebec Hydro's large Albanel substation, which is supplied by a hydroelectric power line - sustainable production with "net zero" targets is, therefore, possible and will be implemented in the mine design.

    Power Nickel shows muscle. Since the announcement of the drilling results for NISK, there has been no stopping the share price. And if you thought 300% was enough, you were wrong. Source: Refinitiv Eikon from 24.06.2024

    In May, Power Nickel was able to secure the internationally renowned geoscientist and polymetal specialist Dr. Steve Beresford as a special advisor. Since then, there has been no stopping the share price. A week ago, there was another flow-through placement with a volume of CAD 20 million at CAD 1.25, a full 90% above the traded price. Last Friday, the price rose by 25% to CAD 0.88 with high volumes. The reason: copper legend Robert Friedland came on board with the latest capital increase. Is there a takeover afoot here?

    We recently published a detailed report on Click here for the analysis.

    BYD versus Volkswagen - Here to stay

    Last but not least, a side note on the EU's new customs decisions, which are expected to come into force at the beginning of July. For the time being, this affects the electric vehicles of three manufacturers, namely BYD, Geely, and SAIC. Punitive tariffs of between 17.4% and 38.1% will now be added to the already applicable tariffs of 10%. For the time being, the EU is only threatening the new tariffs. Minister Habeck is on-site to calm the waters. Can a market-friendly solution be found? Doubtful.

    The most successful model, the MG4 from manufacturer SAIC, will cost around EUR 10,300 more in the "Comfort" version than a comparable VW ID.3 in the "Pro" version, with the new tariffs. If the Chinese models can only convince through their price, this is an advantage for the ailing VW Group. However, the great popularity of the new vehicles is also due to consumers' growing curiosity. They want to test whether there are alternatives to European manufacturers. As aggressively as BYD is advertising in Europe with perimeter advertising during the European Championships, the message is: "We have come to stay." We should, therefore, get used to the new radiator symbols.

    The share prices of BYD and VW perfectly reflect the situation, as they currently show a divergence in returns of almost 70%. While BYD has gained 12% in the 3-year chart after a minor correction, the Wolfsburg-based company has lost a full 54%. The stock market has long since decided who will dominate the automotive market of the future.

    While vehicle shares are only trending sideways due to renewed trade wars, Rheinmetall lands the largest single order in the Company's history. Canadian explorer Power Nickel is making even faster progress. Since the NISK property has been examined in more detail, the share price has made real leaps and bounds.

    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    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 also 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

    André Will-Laudien

    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.

    About the author

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