Close menu




May 24th, 2023 | 08:10 CEST

IPO Price driver: ThyssenKrupp, Volkswagen, Desert Gold

  • Mining
  • Gold
  • Electromobility
  • IPO
Photo credits: thyssenkrupp nucera

In an IPO, it is not only the newcomer to the stock market that is interesting for investors. A parent company often benefits - e.g. Volkswagen or Mercedes-Benz - when the subsidiary becomes fully or partially independent. Shareholders of ThyssenKrupp are currently hoping for a share price driver. Thus, the IPO of the hydrogen subsidiary nucera. However, analysts are skeptical. Yet, an initial public offering can also pay off for the peer group when investors take a closer look at the industry again. Desert Gold could benefit from this. The neighbour of the gold explorer Allied Gold Corp wants to go public in London. Desert Gold should also benefit from this and help the share to break out. Within the VW Group, the Porsche share has outperformed its parent company since the IPO. Analysts warn: Will Tesla and BYD leave Volkswagen behind?

time to read: 4 minutes | Author: Fabian Lorenz
ISIN: THYSSENKRUPP AG O.N. | DE0007500001 , VOLKSWAGEN AG VZO O.N. | DE0007664039 , DESERT GOLD VENTURES | CA25039N4084

Table of contents:


    Desert Gold: Is a neighbour driving the share price?

    At EUR 0.035, one might think that a company is doing poorly. But sometimes, the impression is deceptive, as in the case of Desert Gold. The explorer has been delivering positive news about the development of the SMSZ project in Mali for months. Virtually every drill sample reported on the 440 sq km site - one of the largest non-producing land areas in West Africa - is promising. Initial proven and indicated mineral resources include 8.47 million tonnes grading 1.14 g/t gold totalling 310,300 ounces. In addition, there are probable mineral resources of 20.7 million tonnes grading 1.16 g/t gold totalling 769,200 ounces, more than 21 gold zones and numerous other high-quality exploration targets. But the share price has been trading around EUR 0.04 since the beginning of the year. To put this in perspective, it was EUR 0.10 in January 2022. At that time, the gold price was significantly lower, and Desert Gold was nowhere near ready for development.

    But sometimes, it takes an external trigger for a stock to wake up. In the case of Desert Gold, this could be the IPO of Allied Gold Corp. Limited on the London Stock Exchange. Behind the Company are former managers of the well-known Yamana Gold. Allied Gold's main asset is the Sadiola Mine. The project contains proven and probable mineral reserves of 7.3 million ounces in 149.5 million tonnes grading 1.51 g/t Au and is adjacent to Desert Gold's SMSZ project. Allied Gold is hoping for a valuation of more than USD 1 billion. Desert Gold's market cap is currently just over CAD 10 million. The two projects are not directly comparable, and Allied has some other exploration areas, but it shows that Desert Gold is anything but expensive at the moment.

    Therefore, the takeover fantasy should be rekindled. Because in the neighbourhood, there are several producing mines of Barrick Gold, Allied Gold, Endeavour Mining, and B2Gold. And the region is also attracting new players: Fortuna Silver Mines has just announced that it will acquire Chesser Resources for USD 60 million.

    ThyssenKrupp with nucera IPO: Analysts dampen hopes

    At ThyssenKrupp, investors hope that the upcoming IPO of the hydrogen subsidiary nucera will cause a jump in the share price. According to the news agency "Bloomberg", the IPO is to take place in June, and the valuation is to be around USD 4 billion. However, JPMorgan is putting the brakes on hopes of a price firework in ThyssenKrupp shares. Despite the recent news about the IPO, analysts only rate ThyssenKrupp's stock as "Neutral." The price target is set at EUR 5.70. The analysts themselves value nucera at EUR 3 billion. But even if it becomes EUR 4 billion, they see little upside for the parent company's stock. To put this in perspective: ThyssenKrupp currently has a market capitalization of just over EUR 4 billion. Therefore, nucera is worth more than just a valuable asset within the Company.

    At the same time, things are going well at nucera. Numerous orders have been reported in recent weeks. Most recently, there was a partnership with H2 Green Steel to construct the first large-scale green steel plant in Europe. The standardized 20 MW "scalum" electrolysis modules from the provider of world-leading electrolysis technology for the production of green hydrogen enable an installed capacity of more than 700 MW. This will also create one of the largest water electrolysis plants in Europe.

    The green hydrogen will be used to operate a new, fully integrated, digitalized and cycle-oriented steel plant in Boden, northern Sweden. In the initial phase, the plant will produce 2.5 million tonnes of green steel. Green steel is already in particularly high demand from the automotive industry, which can significantly reduce its carbon footprint in this way. H2 Green Steel is also the first company to reserve production capacity due to the high demand for nucera's solutions earlier this year.

    "The market for green hydrogen production solutions is growing very dynamically. This development is also reflected in the demand for our large-scale and highly efficient water electrolyzers with our 20 MW modules "scalum". It is important for companies to reduce delivery times by continuously building up capacity and thus improve the plannability and feasibility of projects. By reserving production capacities, customers can secure access to these capacities and thus a decisive competitive advantage," says Dr Christoph Noeres, Head of Green Hydrogen at ThyssenKrupp nucera AG & Co. KGaA.

    Volkswagen: Difficulties with software development

    In the autumn of 2022, Volkswagen took its subsidiary Porsche public. Since then, the share price of Porsche AG has increased by around 50%. The parent company cannot keep up with this. The preferred shares of the Wolfsburg-based carmaker are currently trading at EUR 120, the same level as in October 2022. Bernstein Research sees little room for upside, with a price target of EUR 147. The rating is "market perform". The development in the current year is surprisingly positive. Demand in China and the US is better than feared, and the order books are full to bursting in Europe. DZ Bank is somewhat more optimistic about the shares of the DAX-listed company. The analysts recommend buying the stock with a target price of EUR 150. However, they are concerned about the difficulties in software development. These would slow down the important implementation of the strategy for e-cars.


    IPOs are an opportunity: for the stock market candidate, the parent company and the entire peer group. Desert Gold should benefit not only from the gold price, which is expected to continue to rise but also from IPOs or takeovers in the industry. If the drilling results continue to be positive, the share should react strongly sooner or later. The nucera IPO fits the spirit of the times. However, the question is, what will happen to ThyssenKrupp afterwards? Volkswagen is not making much progress with the sales of its e-cars. Tesla and BYD are a long way ahead.


    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") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    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 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.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.


    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author



    Related comments:

    Commented by Fabian Lorenz on July 23rd, 2024 | 06:50 CEST

    70% with Evotec shares? Caution with BASF? Almonty Industries tempts investors to get in!

    • Mining
    • Tungsten
    • hightech
    • chemicals
    • Biotechnology

    Will BASF miss market expectations in the second half of the year? Analysts believe so. The chemical giant's revenues are already expected to fall in the second quarter. So, should one sell the shares now? The Evotec share was bought yesterday. Analysts believe that the profit warning from Sartorius should not be overestimated and see over 70% upside potential. However, patience is required. The Almonty Industries share also appears too favourable. The commissioning of a huge tungsten mine is imminent, and not only companies such as Taiwan Semiconductor and Rheinmetall need the critical metal for their high-tech products. So, when will the share break out?

    Read

    Commented by Armin Schulz on July 23rd, 2024 | 06:45 CEST

    Plug Power, Saturn Oil + Gas, RWE - Which energy belongs in the portfolio?

    • Mining
    • Oil
    • renewableenergies
    • Energy

    The debate about the ideal energy source for the future focuses on hydrogen, oil, and renewable energies. Despite its controversial reputation, oil remains a significant energy source due to its high energy density and well-established infrastructure. Technological advances are also reducing the negative environmental impact. However, renewable energies and hydrogen also offer significant advantages, such as sustainability and low emissions. However, there is a lack of infrastructure to fully exploit the advantages of these technologies. We examine one candidate from each sector and where they stand today.

    Read

    Commented by André Will-Laudien on July 22nd, 2024 | 07:00 CEST

    Despite the super disaster with CrowdStrike, 100% returns are possible with TUI, Lufthansa, Prismo Metals and BayWa!

    • Mining
    • Commodities
    • PreciousMetals
    • IT
    • Software
    • Travel

    The CrowdStrike outage shows us just how dependent the world has become on multinational corporations from America. Within hours, everything came to a standstill - nothing worked at airports, supermarkets, and banks, and some hospitals had to postpone operations. Does this make those responsible think about what urgently needs to be changed? In addition to a completely dependent situation in the IT sector, Europe, in particular, is in a pretty poor state regarding raw materials. Chancellor Scholz is looking for resources in Serbia, a country that would like to join the EU but is closer to the aggressor Vladimir Putin. Can Brussels overlook such facts and transfer billions more to Ukraine at the same time? Europe's needs are obviously manifold, and the most urgent need is likely to master the energy transition to prevent industry migration to more favourable jurisdictions. Investors are currently facing enormous challenges. We provide some ideas for a 100% portfolio.

    Read