Nel ASA, Altech Advanced Materials, Varta - Gamechanger in the battery market?

Altech Advanced Materials - New standard in battery technology?

The coating technology for Altech's "Silumina Anodes" anode material could become the new standard in battery technology, but there is still a long way to go. The German company Altech Advanced Materials AG owns 25% of the joint venture working on this highly innovative development, while the remaining 75% is held by the Australian company Altech Chemicals. The goal is clearly defined. Batteries will be coated with a special nano-coating of high-purity aluminium oxide and an enrichment of silicon, which should prevent the deposition of lithium particles on the electrodes. A loss of capacity, as can currently be observed in lithium-ion batteries, is thus significantly minimized.

The performance of a battery thus increases by 15%, and the service life is extended by as much as 30%. In addition, further research showed that by increasing the proportion of silicon at the anode, it is possible to double the performance. The result of the pre-feasibility study for the planned ceramic anode composite coating plant in Schwarze Pumpe, south of Cottbus, showed the clear potential. The project's pre-tax net present value (NPV) was said to be around EUR 420 million. Assuming full capacity utilization of 10,000 t p.a. at the production facility still to be built, this would result in EBITDA of EUR 52 million. The stock market value of Altech Advanced Materials, which holds 25% as described above, is currently EUR 6.22 million.

A partnership with the Fraunhofer Institute IKTS was recently adjusted. The collaboration aims to accelerate the testing and qualification process for Silumina Anodes and to independently verify the long-term performance of the anode material in various battery applications. In addition, the loss of half of the share capital was announced. Proposals for various capital actions are on the table and will be presented at the Annual General Meeting scheduled for August 23, 2022. The technology is promising but also carries risks at the current stage.

Bullish formation continues

After months of correction and high price losses of almost 80% at the peak, the price of the Norwegian hydrogen specialist could soon have completed its bottom formation. The initial igniter was the recently published largest order in the company's history. According to this, the subsidiary Nel Hydrogen Electrolyser AS was able to announce the largest order to date for the delivery of electrolyzers for hydrogen production from an unnamed customer in the United States. The volume exceeds 200 MW and includes alkaline electrolyzers for industrial applications.

The order for the electrolyzer stacks is a firm order worth more than EUR 45 million. Production and delivery of the stacks are scheduled from February 2023 to mid-2024 at Nel's electrolyzer manufacturing facilities on Heroya. "We are very pleased to announce the largest order ever for Nel. This project will demonstrate Nel's delivery and execution capabilities on a large scale and will be a valuable reference for future large orders," says Hakon Volldal, the new CEO of Nel ASA.

Swiss bank Credit Suisse lowered its price target for Nel ASA to NOK 15.00, equivalent to EUR 1.51, from NOK 19.30, but left its rating at "Neutral." Currently, the stock is trading at EUR 1.52, which is already above the analyst's price target. A strong buy signal would be generated when exceeding the mark at EUR 1.61.

Varta - Waiting for the figures

There is little news at the moment from the long-established German battery group based in Ellwangen in Baden-Württemberg. Nevertheless, some investors might feel queasy because, on August 11, the group will present its figures for the second quarter. It is unlikely that there will be any positive surprises here, given the negative factors with rising raw material prices and interruptions in the supply chains in recent months.

In the last weeks, there was also an announcement that could point to weaker prices. Insider and majority shareholder Michael Tojner and, respectively, the industrial group Montana Tech Components managed by him, sold 200,000 Varta shares at prices of EUR 78, which means an equivalent value of EUR 15.6 million. In total, 55.9% of the Varta shares are attributable to Tojner.

Also, from a chart-technical point of view, the situation continues to cloud over. At EUR 73.92, the share price is only just above its low for the year at EUR 67.88. A break of this support area could well lead to the area around the EUR 50 mark. That is where the low lies due to the outbreak of the Corona pandemic in March 2020. In view of these indications, observation continues to be the best alternative.

The signs continue to point to recovery at Nel ASA. In contrast, investors should wait for the quarterly figures for Varta. Altech Advanced Materials is currently in correction mode. The current level could serve as a long-term entry point for speculative investors who believe in the technology. However, here too, the Annual General Meeting should be awaited concerning further capital measures.