JinkoSolar, Memiontec, Nordex - Elementary profit opportunities!

JinkoSolar - Sunny prospects

Every second, our sun converts around 4 million tons of its mass into energetic radiation through the nuclear fusion of hydrogen into helium. The Earth receives about 885x1018Wh of energy during one year after deducting all reflection and absorption losses. That corresponds to about 37,000 times the current world power generation. We manage to convert about one-millionth into electrical energy with our current solar systems. These figures illustrate how great the potential for solar energy remains for the future.

Theoretically, it would be possible to meet almost all of the world's electricity needs from solar energy alone. However, apart from creating appropriate storage facilities, this would require a massive expansion of production capacities for solar modules on the one hand and further efficiency improvements in the conversion of radiation into electrical energy on the other. Among others, the Chinese Company JinkoSolar is working on both problems. With 23 production facilities spread around the globe, JinkoSolar is one of the world's largest and most innovative companies in the industry. Last year, JinkoSolar succeeded in raising the efficiency level of solar modules above the 25% threshold for the first time.

To finance its continued growth, the Company recently listed its operating subsidiary Jiangxi Jinko on the stock market. At an issue price of 5 yuan (the equivalent of about EUR 0.70), the stock was highly sought after, enabling it to close its first day of trading (January 26, 2022) with a gain of about 111% (10.55 yuan). In total, JinkoSolar had distributed 20% of the 10 billion outstanding shares over the stock exchange. The IPO had initially been viewed critically after JinkoSolar's share itself had lost about 20% of its value during 2021. After a brief slump at the end of January, JinkoSolar's shares returned to the EUR 40 mark.

Memiontec - Bubbling profits

The Singaporean expert has over twenty years of experience in freshwater and wastewater management and patented treatment processes based on membrane ion exchange technology. Memiontec was recently able to announce the start of freshwater sales following the completion of the first expansion stage of the Build-Own-Operate-Transfer (BOOT) project in the megacity of Pekanbaru (Indonesia).

The plant currently has a capacity of 200 LPS (liters per second). It is to be increased initially to 500 LPS in the further course, incorporating the rehabilitation and modernization of the existing water treatment plant. Another plant with a capacity of 250 LPS will be commissioned by 2026 at the latest. The contract with the national water authority PDAM is designed to run for 25 years, thus ensuring continuous cash inflows for the Company.

A second BOOT project in the Indonesian capital Jakarta ("Hutan Kota") has already reached the second expansion stage with 450 LPS. In total, Memiontec has secured three asset ownership projects in Indonesia. The Company is pursuing further projects - mainly in the form of private-public partnership (PPP) projects with municipalities and industrial companies - in China, which is the third location with its own subsidiary after Singapore and Indonesia.

The Group can look to the future with confidence: The Company, currently valued at around SGD 152 million, the equivalent of EUR 100 million, already has an order backlog of around SGD 84 million for 2022. The stock, whose price has increased approximately three and a half times in the course of a year, is listed on both the Singapore Exchange (SGX) and in Frankfurt.

Nordex - Tailwind or headwind?

Nordex, Germany's number three and the world's number eight manufacturer of onshore wind turbines by installed capacity, was the most heavily traded SDAX stock in January with a volume of EUR 365.3 million. Despite a tense market environment for technology stocks, rising commodity prices due to global inflation and disrupted supply chains, and the prospect of an interest rate hike by the US Federal Reserve soon, the Hanseatic Company managed to persuade investors to re-enter the market after reaching a new 12-month low in the interim.

Investors take a critical view of the Company because the business is suffering badly from rising commodity prices. Although the wind turbine manufacturer reported a substantial increase in sales for the first nine months of fiscal year 2021 (+25%), increased material and logistics costs weighed so heavily that a loss of EUR 103.7 million was incurred in the end. On the other hand, investors were encouraged by the sharp rise in order intake, which climbed by 21.8% to EUR 3.22 billion. The stock market value of the German Company currently stands at around EUR 2.3 billion.

Fire, Water, Air - which is your favorite? All three companies are involved in important topics for the future. Currently, with the buzzword "climate change", emission-free energy generation is certainly at the top of the agenda for many. Against this backdrop, the solar cell producer JinkoSolar is a particularly good choice. Even if the big picture is right for Nordex, high raw material prices and supply chain problems will not allow the share to soar at first. We currently see the greatest opportunities with Memiontec. The Company benefits from the fact that contracts with the public sector have long terms of up to 25 years.