March 6th, 2023 | 14:10 CET
German industry at a crossroads: Volkswagen, Altech Advanced Materials, BASF
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"[...] 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
Volkswagen: Damned to success
The example of Volkswagen shows that sometimes it is good to have no other choice. When the diesel scandal brought the Company to the brink of the abyss in 2015, the Wolfsburg-based company took flight. Today, VW is considered the "greenest" German automaker. In 2022, the Company succeeded in improving its results despite adverse circumstances: the figures went up by 25%. This ensures that Volkswagen can now invest properly in research and development - the Wolfsburg company spends a whopping EUR 18 billion in this area every year. These should be good prerequisites for expanding the Company's good position in the mobility of the future.
Although more and more e-cars are rolling off the production line at VW, the flagship group has yet to reach its long-term goals in this area, either. However, thanks to its stable and powerful cash flows, the Company is well-positioned to meet future challenges. VW also now offers a product range that extends from small cars to vans and super sports cars. While other German automakers seek their salvation in the niche, Volkswagen remains a full-service provider when it comes to cars. While this is difficult in terms of pricing, it creates synergy effects. Since VW believes it can sell even more cars in 2023, the stock is worth a look.
Altech Advanced Materials: Future technology without legacy issues
The Altech Advanced Materials share is also considered extremely exciting. Although the second-tier stock is no match for big ships like Volkswagen regarding size and market power, Altech, like Volkswagen or BASF, is considered a typical German industrial stock. The Company is a leader in the field of graphite coatings for anodes. Thanks to Altech, more silicon is being used, which makes it possible to produce batteries with higher energy density. The result is either batteries with long-range or significantly smaller and thus lighter batteries, which in turn have advantages. Altech Advanced Materials is counting on being able to design batteries in line with customer requirements in the future. This could result in e-cars that better strike a chord with the market and convince staunch combustion technology supporters.
In addition to the e-car battery business, Altech Advanced Materials is also collaborating with the Fraunhofer Institute in the field of solid-state batteries and aims to make its CERENERGY batteries, also known as sodium nickel chloride batteries, the first choice in stationary power storage. The advantage of CERENERGY technology is that it does not require critical raw materials and is considered safe and modularly expandable. Altech Advanced Materials is currently building a pilot plant in Schwarze Pumpe in Saxony, Germany, to present its battery technology to customers - it already has business relationships with companies such as SGL Carbon and the Spanish silicon manufacturer Ferroglobe. The stock is a dynamic second-tier stock that investors should keep on their radar. Altech gave a presentation on the solid-state battery business at the 5th International Investment Forum two months ago.
BASF: Full speed ahead towards China!
BASF looks like a dynamic standard stock - at least if you look at the share price performance over a six-month period: the share price has risen by almost 20%. Operationally, the Company had to accept write-downs due to the Russian invasion of Ukraine and the associated sanctions against Russia. Also, many divisions dependent on cheap gas from Putin's empire are on the brink of extinction. BASF is looking to China for its salvation. Since Saouri Dubourg, the strongest critic of China, recently left BASF's Board of Executive Directors, the die seems to be cast for the Ludwigshafen-based company. The focus on China is likely to continue on the Rhine. Given the increasing camp formation between Russia and China on the one hand and the West on the other, this strategy does not appear to be without risk - BASF could slip from one dependency into the next. Given this uncertainty, the share price is too high. Especially the long-term perspective is uncertain.
The turn of the times is affecting many German industrial companies. While companies like Volkswagen have done many things right in recent years and can now invest in new technology on a large scale, BASF is picking up the pieces of its Russian business. Whether the focus on China promises success remains questionable. Altech Advanced Materials, on the other hand, has no legacy. With its anode material for electric cars and solid-state batteries, the Heidelberg-based company has two exciting future fields. This is also reflected in the share price - the Altech share is in demand and impressed with great relative strength in 2022. Technology-savvy investors are likely to hear a lot more about Altech Advanced Materials.
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