17. August 2021 | 11:12 CET
Memiontec, Bayer, Aurubis - Do not miss this trend!
According to estimates by some experts, water demand will already exceed supply by 40% in 2030. That is a dramatic forecast and should wake us up. Of course, climate change is an influencing factor. The increasing water consumption of agriculture in the wake of the growing population presents us with major challenges. In addition, water treatment plays a central role. Some promising investment ideas can be derived from the scarcity problem of the vital resource water.
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ISIN: Memiontec Holdings Limited | SGXE56008290 , BAYER AG NA O.N. | DE000BAY0017 , AURUBIS AG | DE0006766504
MEMIONTEC HOLDINGS LTD - Business is going well
Memiontec Holdings is a provider of complete water management solutions in Asia. Recently, the Singapore-based Company reported that it could secure three new orders in Indonesia with a total value of SGD 5.5 million. With these new orders, the current order backlog has grown to approximately SGD 81.6 million. The new orders relate to two wastewater treatment projects and one water treatment project in Indonesia. The need in the island nation is huge; almost every second Indonesian has no access to clean water.
Memiontec is focusing on the fast-growing cities in China, Indonesia and mainly on the city-state of Singapore. The water and wastewater management specialist serves several demand groups, including municipalities, cities and industrial companies. The Company covers the entire value chain in the water segment with complete solutions for freshwater and wastewater management as well as water treatment solutions.
With the recently published half-year figures, the Company documents that business is going well. Sales climbed by 86% to SGD 27 million. Profit increased at an enormously disproportionate rate. Profit after tax multiplied from a low base to SGD 0.48 million. Earnings per share increased from SGD 0.01 to SGD 0.22. The Company is currently valued at SGD 54 million.
BAYER AG - Renewed burdens
Agriculture accounts for about 70% of the world's freshwater consumption. Water will soon become a decisive bottleneck factor in agriculture in regions with water shortages. In this context, the DAX-listed Company focuses its agrochemicals business on targeted research activities to ensure water-efficient agriculture. Bayer is also developing products and technologies for improved wastewater treatment. In the media, the legacy from the acquisition of US competitor Monsanto is present. Here, several lawsuits are pending against Bayer in the US over a carcinogenic fertilizer. The Group also has a strong pharmaceuticals business.
The most recently published half-year figures were disappointing. High costs and negative exchange rate effects weighed on results. Due to renewed provisions for possible charges in the US glyphosate litigation, the Group posted a billion-dollar loss in the second quarter. These charges will also lead to a significant drop in profits for the full year, even though Bayer recently raised its sales outlook for 2021. Analysts believe the Group will again post a substantial profit of just under EUR 5 billion in 2022. Thus, the 2022 P/E ratio is a moderate 10.
AURUBIS AG - Share corrects from all-time high
Aurubis is one of the world's leading copper recyclers and suppliers of non-ferrous metals. Because of limited resources, the recycling economy is of great importance. Every year, the Hamburg-based company produces more than 1 million tons of marketable copper cathodes with a purity content of 99.99% in its European smelter network. These are then processed into a wide variety of copper or copper alloy intermediates.
At the end of July, the shares reached a new all-time high of EUR 87. Shortly after that, with the presentation of the nine-month figures, a price correction set in. The good quarterly figures were not good enough. In addition, some market participants had expected an increase in the annual targets.
Aurubis benefited from high metal prices in the wake of the global economic recovery and rising demand due to the growth in electromobility. The Group collected high refining charges for copper scrap (recycling) and sulfuric acid, which is produced in copper production. Earnings before taxes almost doubled in Q3 to EUR 83 million. After nine months, the Hamburg-based company can look back on a pre-tax profit of EUR 268 million, more than double the figure for the same period last year. Higher energy prices had a negative impact in Q3.
Resources are finite. We all know that, but we do not act accordingly. An ever-growing world population and increasing demand for resources, coupled with climate change, suggest that the balance will be lost. Water is a key example. With stocks like Bayer and Memiontec, investors can bet on innovative players in the field of "water". Bayer is a global Company with several business units. Memiontec is a more focused way to profit from the investment trend.