Infineon, Manuka Resources, BYD - Analysts see significant potential

Infineon - Buy, buy, buy!

The positive statements made by Automotive Chief Peter Schiefer during the 2023 Automotive Division Call sent the Company's shares, which belong to one of the world's top ten semiconductor manufacturers, southward. According to Schiefer, the Company expects significant growth in its core business with the automotive industry. This area is responsible for about 50% of Infineon's sales. For the just-started fiscal year 2023/2024, an increase in the low double-digit percentage range is expected. Not only revenues are expected to grow, but also profit margins, which should be in a range between 25% and 28%.

The management's positive statements prompted several analyst firms to update their studies. Thus, Deutsche Bank Research reiterated its price target of EUR 47 and its "Buy" rating. The analyst firm Warburg Research came to a similar conclusion, with a target price of EUR 46.50. The conference call confirmed the positive outlook for the automotive segment in 2024, with the Infineon stock being considered attractive at its current level of EUR 32.60, according to analyst Malte Schaumann. After its analysis, the Swiss major bank UBS sees a potential of EUR 45 and rates the Munich-based company as a "Buy."

Manuka Resources - Clear successes

Strategically, Australian gold and silver producer Manuka Resources is ideally positioned to benefit from an upswing in precious metals. With the Mt Boppy mine, the Company owns one of the historically richest gold mines from Down Under. The property in the Cobar Basin has historically produced 500,000 ounces of gold at an average grade of half an ounce per ton of ore. Following the resumption of gold production in June, a significant increase in gold inventory of 360% to 160,100 ounces was achieved. Significantly, measured and indicated resources increased by 79% to 76,500 ounces at a higher grade of 3.53 grams per ton.

Manuka now plans to test additional exploration targets. With the expected cash flow, the Australians are now in a position to not only upgrade their inferred ounces to higher categories, but also further increase the overall resource. Measured resources include 106,850 t at 5.25 g/t for 18,028 ounces of contained gold, indicated resources increased to 715,088 t at 2.54 g/t for 58,477 ounces of contained gold and inferred resources are now approximately 1.8 million t at 1.47 g/t for 83,608 ounces of contained gold.

The second project is the fully permitted Wonawinta Silver Project, which also contains gold. With a mineral resource estimate of 51 million ounces, the property is one of Australia's largest silver producers.

Due to the increasing demand for vanadium, which is needed for storage solutions for solar and wind power plants, Manuka Resources could also rise to become an important supplier to the Greentech industry with its South Taranaki Bight project. Assuming a production rate of 5 million tons of VTM concentrate per year, as per the BFS1 study, annual concentrate production would amount to 25,000 tons of vanadium oxide, representing a share of 15% of global production.

Manuka shares, which are tradable in Frankfurt and on the ASX in Australia, are trading at a discount of close to 50% at AUD 0.045. Should the gold and silver prices start another upward impulse after the current correction, Manuka Resources will benefit twice. In addition, the Company could rise to a significant player in the renewable energy market by implementing its vanadium project.

BYD - Next stage ignited

As of the end of September, the Shenzhen-based company has sold 2 million new energy vehicles, including plug-in hybrids and battery-powered vehicles. This means that the world's fourth-largest automaker has not only broken through a new sound barrier but also pulverized the 2022 full-year result of 1.9 million units already 3 months before the turn of the year. By December 31, the "Build Your Dream" company aims to sell as many as 3 million NEVs. In September alone, BYD delivered 287,454 units, up 4.8% from the previous month. Compared to September 2022, this represents an increase of 43%.

In order to further accelerate growth, BYD is focusing on expansion. The Chinese technology group plans to launch 5 different models on the Turkish market. With the trading company ALJ Turkey, the Chinese plan to build a dealer network. In addition to Atto 3, the Han, Tang Seal, and Dolphin models are also to roll on Turkish roads.

Out of 33 analysts on the Reuters Refinitiv platform who rate the Company, which is co-funded by Warren Buffett, 18 rate it as a "strong buy", 12 as a "buy", and only 3 as a "hold". The average price target of the financial experts is USD 43.98, which means a price potential of around 44%.

Analysts were positive about the statements on the development of the automotive division at Infineon. BYD reached another milestone and is focusing on international expansion. Manuka Resources is strategically excellently positioned and could offer an attractive entry opportunity at current levels if precious metal prices pick up and demand for the industrial metal vanadium increases.