August 5th, 2021 | 10:29 CEST
JinkoSolar, Kainantu Resources, SoftBank - These stocks will rise!
The economic outlook for Asian economies is quite varied. The picture is differentiated depending on containment measures, the speed and effectiveness of vaccine deployment, external demand, and a range of economic policy conditions. The IMF forecasts economic growth of 8.2% for the People's Republic of China in the current year. Growth of 5.1% is forecast for Singapore. The IMF believes that Japan will only achieve economic growth of 2.3% in the current year, while the government itself has formulated an increase of up to 4%. With the following companies, you can profit from the expansion of the Asian markets.
time to read: 3 minutes
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Author:
Carsten Mainitz
ISIN:
JINKOSOLAR ADR/4 DL-00002 | US47759T1007 , Kainantu Resources Ltd. | CA48301H1073 , SOFTBANK GROUP CORP. | JP3436100006
Table of contents:
"[...] Both the geology and the infrastructure around the project make for a very attractive cost structure. We expect to be able to produce at 50% of the current gold price. [...]" Bill Guy, Chairman, Theta Gold Mines Limited
Author
Carsten Mainitz
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
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JINKOSOLAR HOLDING CO LTD ADR - Favorably valued?
Like many Chinese stocks, JinkoSolar's share certificates have recently come under a lot of pressure, but recovery has already begun. The trigger was the strict regulation of some business areas by the Beijing government, which unsettled investors in the short term. The size and market penetration of the Chinese solar panel manufacturer is considerable. The Company has 23 production facilities worldwide. Its monocrystalline silicon wafer production capacity is about 22 GW, cell production capacity is approximately 11.5 GW, and module production capacity is about 31 GW. More than 160 countries are supplied.
The Chinese are not only one of the most prominent global players but also innovation leaders. The recent success in mass-producing a solar panel with an efficiency of around 25% is an example of this. The share also looks good from a fundamental point of view. Currently, USD 57 per share is being called upon the stock exchange, which values the Company at USD 2.7 billion. Analysts forecast sales of USD 7.7 billion for the next fiscal year. The 2022 P/E ratio will then be 13 to 14. Given the growth prospects and the excellent position in the industry, this is not expensive. Nevertheless, the analyst community is skeptical and considers the stock maxed out with a "Hold" rating. We will see.
KAINANTU RESOURCES LTD - Expanding its footprint in the region
Kainantu Resources is a gold exploration company focused on the Asia-Pacific region. The Company's portfolio includes two prospective gold projects, KRL South and KRL North. Both are located in the well-known mining region, the high-grade Kainantu gold district in Papua New Guinea. KRL South and KRL North have the potential to host high-grade epithermal and porphyry mineralization as found in the region.
KRL's projects are located in close proximity to K92 Mining's high-grade producing gold mine. On a particularly positive note, the KRL projects and the K92 property share the same geology. With Asia Pacific Energy Ventures Pte Ltd, the Company has an experienced and strong partner in the country, which has already realized large national energy projects. The entire management team has extensive expertise and a track record in the region.
Most recently, the Company strengthened its footprint in Papua New Guinea with the acquisition of the May River Project. The project comprises three properties totaling 1,697 sq km. Previous drilling on the project has proven the following gold grades: 54 meters at 1.83 g/t, 109 meters at 1.53 g/t, and 96 meters at 0.89 g/t. In addition, several copper anomalies were encountered. Currently, the shares are trading at CAD 0.21, valuing the Company at only CAD 10 million. Investors should put the share on their watchlist.
SOFTBANK GROUP CORP - Far too high NAV discount
SoftBank Group Corp. is a Japanese holding company. The group invests in companies from the technology, communications, energy and finance sectors and only ever takes minority stakes. The blue-chip portfolio is impressive. It includes, among others, the Alibaba Group, T-Mobile, the chip manufacturer ARM and SoftBank Corporation, which focuses on telecommunications in Japan. With the Vision Fund, which has a volume of around USD 100 billion, the Company invests in start-ups. The Japanese attach great importance to the field of artificial intelligence, which will change many industries. The investment approach follows this logic.
The share certificates have an unusually high discount to the intrinsic value (NAV). Currently, the stock is trading around JPY 7,000. The NAV is currently at JPY 15,000. That means the discount is a good 50%! The stake in Alibaba alone has a value roughly equal to the current share price. Investors get all other assets for free on top. So it is no surprise that numerous analysts recommend buying the stock, with an average upside of 63%.
Asia is a true growth engine. This and its technological expertise are embodied in the JinkoSolar share, among others. With SoftBank, investors can participate in a broad portfolio of good companies at a very attractive discount. Microcap investors looking to seize opportunities in the commodities sector should look at Kainantu Resources.
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