January 16th, 2023 | 15:22 CET
Last Generation in Lützerath - Greentech shares jump! Siemens Energy, Auxico Resources, JinkoSolar, and Nordex in focus
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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 - Analysts fuel the New Year rally
Solar panels remain the focus of investment in the climate protection sector. While their production is not exempt from CO2 emissions, they still save vast amounts of greenhouse gas over their 20 to 25-year lifespan. Zones with plenty of hours of sunshine are, therefore, ideally suited for building entire power plants. Spain alone now accounts for 56% of Europe's solar power production, while Germany is in second place with 33%.
JinkoSolar Holdings Co., Ltd. is one of the leading suppliers of panels and wafers to Europe. In the third quarter, the Company reported sales of around 10,850 MW of solar modules and cells, a 3% increase on the previous quarter and a whopping plus of 117% YOY. Due to upward price adjustments, sales increased by almost 128% YOY and reached the equivalent of USD 2.74 billion. Adjusted net income was USD 60.1 million, after a loss in the second quarter due to COVID restrictions and power shortages.
Currently, analysts are again looking positively at the solar specialist. Roth Capital recently upgraded the stock from Neutral to Buy with a new price target of USD 70 after USD 50. The Jinko share consolidated in 2022 to EUR 42 and has risen by over 30% year-to-date. Experts assess the 2023 P/E ratio in consensus at about 9, so the stock is no longer expensive and tempting to enter.
Auxico Resources - A source for critical metals
All green and high-tech products contain a certain amount of rare earths. As the name suggests, they are relatively rare and are mainly found in China, where they can also be mined profitably. However, because of their supply dependence on Beijing, Western industrialized countries are developing strategies to bring other suppliers to the market.
Canadian explorer Auxico Resources (AUAG) was founded in 2014 and focuses on producing critical minerals, including niobium, tantalum, platinum group metals (such as platinum and iridium), and rare earths. The Company is the exclusive commercial agent for rare earth concentrates from the Democratic Republic of Congo (DRC) and owns mineral rights in Colombia, Bolivia and Brazil directly or through joint ventures.
With access to nearly 4 million tons of critical minerals and rare earths, Auxico has one of the largest deposits outside of China, with average rare earth oxide (TREO) grades ranging from 54% to 63%. In Brazil, it has access to tin concentrates from a reprocessing plant in the Brazilian state of Rondonia. The Company has also licensed a technology called Ultrasound Assisted Extraction (UAEx), which has proven very successful in extracting rare earths and other critical minerals. In addition, they have 100% ownership of the Zamora property in Mexico. The property covers 15 historic mines and pits with high gold and silver mineralization. With a stronger focus, this asset could be sold profitably for shareholders. For the needs of the high-tech and Greentech industry, Auxico could grow into an important supplier in the coming years.
Analysts at Hallgarten & Company conducted a November 2022 valuation of the property and calculated a fair valuation of CAD 1.48. Although China is still likely to dominate in rare earth pricing, Auxico has excellent chances of securing a large piece of the global pie. The shares of Auxico Resources (AUAG) are trading stable in Canada in the corridor of CAD 0.42 to 0.47 and can also be purchased liquid in Germany. The Company is currently valued at around CAD 60 million, meaning that the commodity specialists from Montreal still have considerable potential in the current mixed situation.
Siemens Energy and Nordex - A good start to the new year
There are also first signs of life from the much-criticized Greentech stocks Siemens Energy and Nordex. Both shares suffered losses of 40 to 60% in the last 12 months. Due to their different focus and location, they currently have to deal with very differentiated requirements and problems.
Siemens Energy is a specialist in the sustainable conversion of power plants to new, environmentally compatible standards. In the current climate protection wave, the Company cannot save itself from orders. Most recently, it received an order worth billions from grid operator Amprion to connect wind farms in the German North Sea. In a consortium with Spain's Dragados Offshore, Siemens Energy will build converter stations for two new grid connection systems worth the equivalent of EUR 4 billion. The intention with Iraq is to build projects with a capacity of more than 6 GW over the next 5 years, involving the construction of conventional power plants, the expansion of renewable energies and the stabilization of the power grid. The stock is jubilant and has gained around 80% since October 2022 alone.
Nordex has procured fresh capital from scolded shareholders several times. With three profit warnings in a row, the Company now believes it will only become profitable again in 2024. The linchpin of the Hamburg-based company's profitability remains the high cost of upstream products, a lack of personnel and constant disruptions in its supply chains. Although Nordex announced in November that its operating loss is expected to reach 4% of sales in 2022, the lower end of its previous target range, the share price has since smoothly doubled. Like Siemens Energy, the stock market is betting on a consistent flood of orders, which has now been confirmed at the beginning of the year. The lows from 2022 are EUR 6.97 - with prices currently 100% higher at EUR 14, investors are very optimistic that Nordex will soon overcome its earnings weakness.
The availability of strategic metals could become the linchpin of climate change in the future. In order to drive Greentech, a wealth of raw materials that are not so easy to find everywhere on the globe are needed. China is leading the charge here, and Western industrial nations are looking for alternatives. Auxico Resources could become a major focus of strategic investors seeking greater liberalization of supply in 2023.
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