01. March 2021 | 10:05 CET
JinkoSolar, NIO, Almonty - Rare metals, these are the buying opportunities!
The Purchasing Managers' Index (EMI) for the manufacturing sector in China measures the industrial sector's current situation. In the financial markets, this survey of purchasing managers and company heads is considered one of the most influential economic indicators because it shows the country's economic performance from several angles at an early stage. Yesterday, Sunday, this index came with a value of 50.6 - expected was 51.1, the last value was 51.3. If you think in categories of an imminent recovery to Corona, you will be slightly disappointed with this figure. After all, a value below 50 indicates recessionary tendencies - and China is not far from this mark.
time to read: 4 minutes by André Will-Laudien
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
JinkoSolar Holding Ltd. - Green Power from China
China's National Energy Administration (NEA) has announced that the share of renewable energies in electricity consumption is to rise to 40% by 2030. Excluding hydropower, the figure is expected to be just under 26% - this is likely to be met mainly by wind and solar power. This proposal is intended to underpin President Xi Jinping's policy goal that non-fossil energy should cover at least 25% of primary energy consumption in 2030. The authority itself will monitor that these targets are met.
A prominent member of the Green Power faction is JinkoSolar, the world's largest solar cell producer with an annual output of over 14GW. Founded in 2006, JinkoSolar produces and sells solar cells, solar modules and solar module mounting systems. In addition, the subsidiary JinkoPower operates its own solar parks. JinkoSolar has just agreed on strategic cooperation with the silicon cell manufacturer Tongwei to secure its supply chains better. Tongwei will invest in a joint venture with JinkoSolar for wafer production, while Jinko will invest in a new polysilicon production facility. The Group will also supply additional silicon wafers to Tongwei, building on an agreement already in place.
For months, no clear trend has emerged in the JinkoSolar share. In a broad sideways range between USD 55 and USD 80, the shares are probably consolidating the previous rally from 2020. From a chart perspective, the share price should not fall below EUR 40, and if it does, there is a threat of trouble.
NIO - It's getting tight in the e-mobility market
Today, after the stock market's close is the moment of truth: Can NIO approach the break-even point with its sales figures in the last quarter? The stock, which has been weakening lately, was recently dragged down significantly in the overall correction in the technology sector. Industry favorite Tesla lost over 20% within 3 weeks, here NIO shares seamlessly joined.
For the fourth quarter of 2020, NIO is expected to report a narrower loss of 7 cents per share on revenue of USD 1.01 billion, according to consensus estimates. In the same period last year, the Company reported a loss of 39 cents per share and revenue of USD 407 million, and in the previous third quarter, revenue was USD 667 million, and non-GAAP loss per share was 12 cents. NIO previously provided fiscal 2020 revenue guidance of USD 922 million to USD 948 million, but that mark should be easily topped.
NIO confirmed in early January that it shipped 17,353 vehicles in Q4, representing 111% year-on-year growth. The momentum continued to accelerate in 2021, with January deliveries climbing over 350% to 7,225 cars. According to industry analysts, electric vehicle penetration, currently at 3% of global new vehicle sales, will rise to over 50% in the next decade. China is a critical part of the worldwide EV growth story in this regard.
Whether the NIO stock can benefit from the numbers is more than questionable because after rising more than 400% since the beginning of 2020, the share price also deserves a breather. If the figures remain below expectations, the current downward trend is likely to accelerate once again!
Almonty - Rare metal needed almost everywhere
As stated by us several times in this space, tungsten and other rare metals remain a bottleneck for global technology production. Again, China is the most significant player in the tungsten business, with 80% of the global market. It is followed by Vietnam, Korea, Spain and Portugal. Austria is also on the list. The most important tungsten deposit in Europe is located in the Felbertal in the Hohe Tauern (province of Salzburg). After the already announced signing of the KfW loan agreements and the Austrian Plansee Group's cooperation, South Korea will soon also become a significant tungsten producer.
Tungsten was placed on the "Supply Risk List" in Europe in 2012. It has also been classified as critical in the US since 2018 due to its rarity. Tungsten is used 30% in the automotive sector, followed by mining, industry, energy, construction and aviation. Demand is exceptionally high in the e-mobility sector, in addition to smartphones, watches, locks and heating components. The tungsten wire in the light bulb was the best-known application in the last millennium.
Almonty's site in South Korea is home to the tungsten deposit as well as a significant molybdenum deposit in the immediate vicinity. This fact indeed accounts for a portion of the valuation. The Sangdong Mine has now completed its financing and will go into production in the foreseeable future. The total investment is USD 80 million for an estimated life of approximately 13 years. With a mineralization grade of 0.49%, Almonty has the best quality worldwide, and 1,100 jobs will be created there in South Korea.
With the latest news, Almonty shares have exceeded the CAD 1.00 mark. Drilling in Sangdong will start with 12,500m as of April 12 and take about 6 months. We are curious to see how the historical measurements can be confirmed or even surpassed there. With a market capitalization of CAD 195 million, Almonty is now ready to jump into the premier league!