February 5th, 2024 | 07:45 CET
Is Bayer's share price about to jump? BYD off to a positive start! Manuka Resources with a billion-dollar opportunity!
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"[...] We will trigger indirect creation of 1,665 new jobs nationwide, while directly employing 300 staff - 270 operational and 30 administrative. [...]" Dennis Karp, Executive Chairman, Manuka Resources Limited
Manuka Resources: After the capital increase, is a revaluation imminent?
Is Manuka Resources facing a gigantic revaluation this year? It is certainly realistic. The Company is sitting on a billion-dollar project, namely the VTM Taranaki iron sands project. It is located 22 km to 36 km off the coast of New Zealand. The sand there contains vanadium, titanium and magnetite. The mining license has been granted and the environmental process is nearing completion. Following New Zealand's government change, the chances of exploration are increasing. In a recent interview with Kapitalerhöhungen.de, Manuka Chairman Dennis Karp was extremely optimistic. Karp also emphasized the national importance of the project for New Zealand. In addition to millions in tax revenue, around 2,000 jobs would also be created. After mining, everything could be cleaned up in an environmentally friendly way within two years. Then Karp gets specific: The project has a fair value (NPV10) of USD 1.8 billion. In the past, there had already been a purchase offer at the equivalent of AUD 0.80 per share. The Manuka share is currently trading at AUD 0.08. Click here for the full interview.
Manuka is already earning money with the Mt Boppy gold mine. The mine was ramped up in the second half of 2023 and is producing positive cash flows. To further expand Mt Boppy and to have funds for the development of Taranaki, Manuka successfully completed a capital increase of AUD 5 million last week. Of this, Manuka will receive AUD 2.5 million in cash directly. The other half was used to repay debt. As a result of the measure, the share price briefly fell to the issue price of AUD 0.07 but has already recovered to AUD 0.08 on Friday. Investors seem to have used the setback to enter the market.
Bayer: Will Aspirin be sacrificed?
Unfortunately, taking advantage of a price setback to enter the market has not paid off for Bayer in recent years. The DAX-listed company's share price has now fallen below the EUR 30 mark and has not seen this level for over 20 years – a real tragedy. The never-ending legal disputes and billion-euro payments relating to glyphosate are responsible for the decline. Even announced job cuts have not brought about a turnaround in the share price. The next hope for shareholders is the upcoming Capital Markets Day at the beginning of March. Bernstein analysts expect the announcement of drastic measures there. However, the separation from the agricultural sector is not anticipated. Instead, the analysts expect the sale of the over-the-counter medicines division, which includes the iconic Aspirin. Bayer without Aspirin may be unimaginable for many, but for the analysts at Bernstein, this could be a stroke of liberation. They rate Bayer shares as "Outperform". The price target is EUR 51 and thus significantly higher than the current EUR 28.69.
However, the Bernstein analysts are quite alone in their optimism. Most analysts rate Bayer shares as "Neutral" or "Hold". UBS is no exception. Their price target is EUR 34. After the recent loss in the first instance trial, the risk of higher provisions is increasing. In addition, no exciting new drugs are on the horizon in the pharmaceutical sector, and existing drugs are under increasing pressure from generic products.
BYD: Good start to the year leaves investors indifferent
BYD is currently putting pressure on Tesla and other car manufacturers. The Chinese company has reported strong sales figures for January. In the first month of 2024, BYD sold 201,493 vehicles, representing an increase of around 33% compared to the 151,431 vehicles in January 2023. Notably, 36,174 vehicles were sold abroad. It will be interesting to observe how sales outside China develop this year. The share of pure electric vehicles (BEV) was around 48% (105,304 vehicles). **The comparison with December 2023 is less favourable. In the last month of the previous year, BYD sold 190,754 electric vehicles. The share may not have benefited from the sales figures on Friday. Analysts seem more concerned about the margin than the sales volume. Due to industry price wars, BYD's margin also fell significantly in the course of 2023.
The BYD share will likely be driven less by sales figures than by earnings performance this year. Can the decline in margins be halted? Investors will have to keep an eye on this. At Manuka, ongoing gold production provides income, and the VTM iron sand project brings the share price fantasy. If exploration can indeed commence, a revaluation of the share is likely on the cards. There is little hope of a revaluation at Bayer. Legal disputes show no signs of ending, and the pharmaceutical pipeline is empty. A genuine upward trend would be a real surprise.
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