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June 1st, 2022 | 12:34 CEST

K+S, dynaCERT, Siemens - Record orders and great opportunities

  • Hydrogen
  • fertilizer
  • Technology
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The Corona pandemic caused chaos, disrupted business processes and ultimately blew up entire supply chains. It is difficult for companies to recover from this. With Russia's invasion of Ukraine, a new test for businesses is on the horizon. While only a few industries, such as fertilizer manufacturers, could profit, the broad mass of listed companies went down. After calming down, there are now long-term opportunities at attractive levels.

time to read: 3 minutes | Author: Carsten Mainitz
ISIN: K+S AG NA O.N. | DE000KSAG888 , DYNACERT INC. | CA26780A1084 , SIEMENS AG NA O.N. | DE0007236101

Table of contents:

    dynaCERT - Sales start

    The challenging period at the manufacturer of the innovative electrolysis system "HydraGEN" seems to be over. According to the CEO of dynaCERT, Jim Payne, the pandemic could be used to modernize the production facilities. In the meantime, up to 2,000 devices could be produced in one shift. A production line for individualized products has also been added.

    "Now we are pushing the sales!" the Company leader expressed on the occasion of the 3rd International Investment Forum (IIF). Canadian mining companies, in particular, are on the acquisition list. The new sales partner, Simply Green Distributors Inc., is expected to accelerate the deals and will be responsible for the Canadian oil and gas market. Simply Green has already informed dynaCERT that several large transportation and oil and gas companies in Western Canada are testing the HydraGEN technology.

    Several deals were reported by dynaCERT through its distributor, H2Tek, which specializes in providing mining companies around the world with the HydraGEN technology developed and patented by dynaCERT. In total, dynaCERT announced the sale of 7 of its equipment types equipped with the HydraGEN technology. The devices will be deployed in Peru, Argentina and Brazil. According to David Van Klaveren, H2Tek's Vice President of Global Sales, "Our national and multinational customers value dynaCERT's promising HydraGEN technology and hope to make progress in meeting their ESG guidelines with its successful implementation."

    After the sell-off in dynaCERT's stock, a long-term bottom may be forming in the area around EUR 0.10. Should promising orders continue to enter the books, nothing would stand in the way of a rebound.

    K+S - Here comes the second chance

    Last year, the fertilizer producer already benefited from increased demand from farmers and strongly rising prices for potash, one of the most important mineral fertilizers for plant cultivation. Following Russia's war of aggression and the sanctions imposed on Russia's Uralkali and Belaruskali, which account for around 38% of production, supply was significantly tightened once again. As a result, the share price doubled from around EUR 17 to a high of EUR 36.45.

    In a friendly stock market, the Group quadrupled its operating profit in Q1 to EUR 524 million, while sales increased by 65% to EUR 1.2 billion. At the end of April, the Company's headquarters in Kassel adjusted its annual forecasts for 2022 due to growing demand and rising potash prices. Thus, an operating profit of EUR 2.3 billion to EUR 2.6 billion is now expected, compared with EUR 969 million in the past fiscal year.

    Sentiment for Western fertilizer producers such as K+S, Nutrien and Mosaic is likely to remain positive in the near term, even if the price of potash continues to correct. An end to the sanctions and thus the lifting of the supply shortage is very unlikely to be in sight. Since mid-April, the K+S share has been in a correction, which brought the paper close to the EUR 25.50 mark. The next serious support level is the high from July 2018 at EUR 22.99. The 200-day line is currently at the EUR 19.46 level, which should represent an interesting entry level in the long term.

    Siemens - Record order

    The chart picture for the Munich-based conglomerate is quite different. Siemens focuses on automation and digitalization in industry, infrastructure for buildings, decentralized energy systems, mobility solutions for rail and road transport, and medical technology. After a correction in a generally weaker market, the share price has been stuck in the EUR 115 range for weeks. At the end of last week, the share broke out of the sideways movement to EUR 126.00, representing a new high for the year.

    The reason for investors' enthusiasm was the publication of a record order, according to the Company itself, the largest in its 175-year history. Together with two partners, the Company had signed a contract to construct a 2,000-km high-speed train network in Egypt, which is to connect some 60 cities. According to the agreement, Siemens will be responsible for a contract value of EUR 8.1 billion. In addition to Siemens Mobility, the consortium partners Orascom Construction and The Arab Constructors are also involved.

    After doubling in price, the shares of fertilizer producer K+S corrected. A further drop towards the EUR 20 mark could represent an attractive level in the long term. Siemens shines with a record order. At dynaCERT, the long-term bottom could have been found. The start of sales activities should result in rising quotations.

    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.

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    Der Autor

    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.

    About the author

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