January 19th, 2023 | 11:24 CET
Nel after the ITM Power shock: Better to bet on BioNTech and Alpina Holdings?
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For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
Alpina Holdings: Stock market newcomer with spectacularly favorable valuation
Companies that are new to the stock market do not have to have a well-known brand name or a spectacular business model; they have to earn the attention of investors. Sometimes this takes more time than expected. This is the only way to explain Alpina Holdings' share price and valuation. The Company has been listed on the Singapore Exchange since 2022 and is now also listed on the Frankfurt Stock Exchange. The business model is anything but new but has been proven and profitable for years.
The Company has been active as a real estate and construction services company in Singapore for 17 years and is thus active in one of the world's most attractive real estate markets. The business model is diversified around real estate and includes integrated building services (IBS), mechanical and electrical (M&E) engineering services and alterations and additions (A&A) for public and private sector projects. The majority of customers are from the public sector. The IBS segment, in particular, is characterized by growth and multi-year contracts. In 2021, Alpina turned over EUR 36.4 million, generating a profit of EUR 6.5 million. At a current share price of EUR 0.12, the market capitalization is around EUR 20 million, and as of June 30, 2022, the Company had cash and cash equivalents of around EUR 9 million. Even though a significant decline in earnings is expected for 2022 - due to the IPO costs, among other things - the valuation is still incredibly favorable. Moreover, management has already announced that for 2022 and 2023, at least 50% of profits will be distributed to shareholders in the form of a dividend.
Alpina CEO Low Siong Yong said, "Going forward, we remain confident in the strength of our business model as an integrated facilities specialist. Coupled with our strong financial position, we also have the business flexibility to pursue attractive growth opportunities with differentiated offerings, such as our renewable energy project."
Nel: Is ITM Power the exception?
ITM Power's warning at the beginning of the week weighed on the entire hydrogen sector. While the UK company suffers from many homegrown problems, investors are still concerned that the entire industry is not getting the growth opportunity on the road. It is reminiscent of 2022 when the industry benefited from one stimulus package after another. Hydrogen - especially green - is seen virtually worldwide as a key pillar for the energy mix of the future. But operational performance, including from industry leaders such as Nel and Plug Power, has disappointed with low revenue growth and high losses. This is expected to change in 2023.
We explain the situation at ITM Power: The UK-based electrolysis specialist has issued a revenue and profit warning for fiscal 2022/23 (ending April 30). Sales are expected to be lower, and the EBITDA loss is higher than expected. Reasons were previously unaccounted for delivery delays in customer contracts, additional costs, and write-downs on inventories. All problems are "surmountable," the Company said. "This is the challenge I expected when I came to ITM," said new CEO Dennis Schulz. "For the Company to evolve from an R&D and prototyping company to a mature delivery organization, we need a more solid foundation." Analysts at Berenberg were disappointed by this latest bad news. They said that the change of CEO was the right thing to do but that it would take time to realign the Company and regain lost trust. By way of background, the British company had already lowered its forecasts several times in 2022.
Investors in other hydrogen companies, such as Nel ASA, are equally unsettled. Nel also had to contend with supply chain problems and lower-than-expected sales during the year. The Company also needs to finally get a handle on its high operating losses. Official Q4 2022 figures are due to be released on February 28. Following the recent industry shock, no analyst has yet commented on Nel. Jefferies recently raised its price target for the Norwegian stock from NOK 19 to NOK 20. The order books for 2023 are full. However, they must be processed efficiently.
BioNTech: Goldman Sachs gives a price target of USD 177
So far, the New Year's rally has passed BioNTech by. Investors can look forward to a lively news flow in the current year. Goldman Sachs also sees it that way and has renewed the price target of USD 177. The share is currently trading at just under USD 143. However, analysts still focus on the revenues from the COVID-19 vaccine, which are declining. Nevertheless, they point to the numerous upcoming study results on other infectious diseases and cancer. BioNTech's focus is on cancer research. The Mainz-based company's pipeline includes 19 product candidates in 24 ongoing clinical trials.
However, BioNTech is currently somewhat overshadowed by Moderna. The US competitor plans to apply for approval for an RSV vaccine before the end of the first half of 2023. The Phase 3 trial is said to be promising. The study examined the vaccine's efficacy against RSV-related lower respiratory tract disease with two or more symptoms. The safety profile was said to be very good as well. About 37,000 people aged 60 and older from 22 countries participated in the study. BioNTech shareholders are now waiting for this kind of news.
In the hydrogen sector, the wheat will be separated from the chaff in the current year. For a rising share price, Nel & Co. need increasing sales and at least - if no profits - decreasing losses. Alpina, a newcomer to the stock market, may be worth buying into. The business model is established, and the Company could develop into a dividend pearl. At BioNTech, shareholders are waiting for the first study results.
Conflict of interest
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