November 23rd, 2022 | 10:06 CET
GreenTech takes off again: BASF, Meta Materials, Nordex, JinkoSolar - Is there a quick comeback?
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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.
BASF - Cost-cutting measures at Germany's largest chemical site
Ludwigshafen-based chemical company BASF is one of the largest suppliers of starting materials for the GreenTech industry. Substances are produced and mixed here with high-energy input, important chemical precursors for high-tech manufacturers in the alternative energy and e-mobility sectors. But production costs are rising. Germany, as an industrial location, has been suffering from extreme inflation on the energy side since the start of the war in Ukraine. So far, there is no improvement in sight.
Therefore, BASF is considering new sites in order to achieve extensive cost reductions across the Group. With more than half of the planned savings, the headquarters in Ludwigshafen is also affected. This is not good news for Germany's competitiveness in an international comparison since 39,000 of the total 111,000 employees worldwide work here.
But since innovation and research are future business drivers, BASF cannot do without a large research division. The crux of the matter is that investments will probably be made abroad in the future. The management had just approved a new site for around EUR 10 billion in China. A slap in the face for German industrial policy and a medium-term loss of valuable jobs. Because of the difficult conditions in Europe, BASF's management also set up an austerity program to be implemented from 2023 to 2024. The cuts are intended to reduce annual non-production costs by a massive EUR 500 million, and the Company is not ruling out job cuts in the process.
The Ludwigshafen headquarters is still the heart of BASF, but it is clear where the Company is headed in the medium term. From today's perspective, input costs for energy-intensive production in Asia and North America are significantly lower than in Europe, and Brussels' energy and industrial policies are not very attractive. The Group is currently benefiting from the excellent performance of its subsidiary Wintershall DEA, which could save the operating figures in 2022. BASF shares have risen strongly in 2022 to EUR 52 since the lows of around EUR 38. At currently EUR 49.50, investors are looking at a P/E ratio of just under 10, and if earnings remain unchanged, they will receive a 7% dividend on top.
Meta Materials - A bouquet of good news
In days of energy scarcity and increased industrial efficiencies, the focus is again on technology companies that make more efficient processes possible through their patents. At innovator Meta Materials, it is all about coatings on glass, building structures and other design elements that can be made high-tech. For example, the Company develops sensibly integrated antennas and camouflage caps for armaments. The first solutions for the booming e-mobility sector have also been available for some time. Together with its partner company Coulometrics, Meta now wants to make batteries for electric cars safer, more durable and more powerful.
With its innovative developments, META®-Materials is thus repeatedly in the focus of the manufacturing industry. A proof-of-concept was recently presented as part of Deloitte's Canadian Technology Fast 50 program. The Nova Scotia-based company was named one of the winners in the "Clean Technology" category. The competition's category, introduced last year, recognizes Canada's best innovators whose achievements help reduce environmental impact. META's management attributes the Company's triple-digit growth to its ability to develop new functional materials with properties that go beyond what nature has already created. The nanomaterials developed address a highly dynamic market estimated to reach USD 10.7 billion by 2030. This refers to solutions for 5G networks, e-mobility, autonomous driving and much more.
George Palikaras comments, "META continues to set new standards in terms of product performance and sustainability. We design and manufacture highly functional materials and devices that use less energy and materials and sustainably improve supply chains." Anders McKenzie, partner and national leader of the Technology Fast 50 program at Deloitte Canada sums it up: "These outstanding companies are among the elite of Canada's clean technology sector, developing and bringing to market innovations that create a more resilient and sustainable future for the environment." The current outstanding sentiment for META shares is also being spurred by insider buying. Director John Harding, for example, purchased 126,000 shares at USD 1.74. This attracts new investors, and the share price continues to rise with high trading volumes. The META share has thus already more than doubled since mid-October and conquered the USD 2.00 mark again. Well done!
JinkoSolar and Nordex - And already things are looking up again
The mood in the GreenTech sector is noticeably improving due to the announcements at the COP 27 climate summit, as a flood of orders is expected through the green programs of the governments concerned worldwide. At Chinese solar panel expert JinkoSolar, sales rose 130% to CNY 19.52 billion in the latest quarter, up from just CNY 8.47 billion a year earlier. This was clearly above analysts' expectations, but the good mood for the share quickly subsided again. The Company is currently still suffering from the restrictions of the government's Zero-COVID policy and expects this to impact the current quarter negatively. The share price was able to vehemently turn at the EUR 42 mark in the last 6 weeks and reached EUR 54 again, but the value is still far away from the summer high at approx. EUR 75. With the recent correction on the NASDAQ, the price fell back below EUR 47.
Over the summer, Nordex was burdened by continuous capital increases, which repeatedly meant additional financing for long-term investors. Since the 9-month figures, however, things have been going steeply upward again. According to the board, the Company is still struggling with higher costs and interrupted supply chains, which will weigh heavily on the current year. However, with sales of EUR 1.7 billion in Q3, the group is 50% above last year, but the operating loss will still reach 4% of sales in 2022. For 2023 to 2025, however, the mood is thoroughly positive, as rising sales prices from adjusted customer contracts should have a very positive impact with a time lag. Further hope for the future is provided by the lush order situation, with the total order backlog of turbines not yet delivered and installed rising to a value of EUR 6.5 billion. That is another EUR 1.5 billion more than the order pipeline showed a year earlier. In the last 6 weeks alone, the share price has gained a good 50% and was recently able to clear the technical hurdle of EUR 11. The Hamburg-based company seems to have finally turned the corner.
Sentiment in growth markets is improving, but high interest rates burden valuations. BASF is as solid as a rock. Nordex and JinkoSolar continue to benefit from the energy transition. Meta Materials recently received an award for its innovations, which sent the share price up by over 120%.
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