February 6th, 2023 | 07:46 CET
Nel ASA, Manuka Resources, TUI - Which stocks will take off in 2023?
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.
Nel ASA - Further expansion of production capacities
In Europe, hydrogen as an energy source has gained importance in recent years due to its potential environmental benefits. Because of the ongoing conflict between Ukraine and Russia, the technology has again come into focus. This is also demonstrated by the plans of Enagás, a Spanish transmission system operator for natural gas. The Company plans to invest around EUR 5 billion in the expansion of hydrogen infrastructure. Among other things, a submarine pipeline from Barcelona to Marseille is planned. These are good prospects for Europe's leading hydrogen supplier, Nel ASA, which should see significant sales growth over the next 2 years.
On January 24, the Company reported that it had divested its shares in Hyon AS. That flushed around NOK 7 million into the coffers. Previously, it had also divested its Nikola shares. The new CEO, Håkon Volldal, who has been in office since last July, is therefore cleaning up. Instead of financial investments, the focus is on expanding production capacities. Only 1 of 4 production lines is active at the manufacturing plant in Herøya. In an interview with the shareholder, the CEO revealed that the long-term goal is to achieve a production capacity of 4 GW in the US, with equal emphasis on PEM and alkali technology.
The most important statement from the shareholder interview is: "In the EU, on the other hand, people are afraid of being left behind and that investments will flow to the US. The governor of Michigan has visited us, and he is interested in Nel building its planned Gigafactory in his state. European countries also want to build an ecosystem for green hydrogen. There is a lot of demand." For more detailed information on the Company, you can read the report at researchanalyst.com. While the stock has jumped about 85% at its peak since mid-October, fundamentally, it is ambitiously valued with a price-to-sales ratio of about 16 this year. One share currently costs NOK 17.69.
Manuka Resources - Silver production starts in Q2
Australian precious metals producer Manuka Resources made a transformative acquisition last year with the acquisition of the South Taranaki Bight (STB) project. The project has 3.8 billion tons of iron sand, vanadium and titanium. Vanadium, in particular, plays an important role in the energy transition, as vanadium redox batteries can be used to store and provide energy when it is needed. It could back up electricity from renewables, improving the integrity and reliability of power grids and supporting the transition to renewables. Demand in this area is expected to grow strongly in the coming years. In addition, vanadium currently comes primarily from Russia and China and is therefore considered a critical raw material in Western industrialized countries.
A permit has been granted for mining 5 million tons of iron ore per year for at least 20 years. This operation is considered to have a low carbon footprint compared to other iron ore operations and is cost-effective. Environmental impacts are minimal and short-term, and no fish will be endangered. According to the schedule, first production is planned for late 2025 / early 2026. Silver production at Wonawinta is expected to restart as early as Q2 2023. The mineral resource estimate assumes 51 million ounces of silver. Most recently, operations have been dormant due to poor weather conditions caused by La Niña.
With a production of about 2.3 million ounces, about AUD 75 million in revenues are expected per year at the current silver price of USD 22.36. Production occurs at the Company's silver and gold processing plant, which can process up to 1.1 million tons. Further exploration is planned for 2023, and the Gold Mt Boppy project, formerly one of Australia's largest gold mines, will also be further explored. More detailed information will be given at the Company's presentation at the 6th International Investment Forum (IIF) on February 15. The stock is trading at AUD 0.095 following a corporate action in December, which puts the market capitalization at just around AUD 47.5 million. The replacement value of the processing plant alone is around AUD 100 million. The enterprise value is significantly higher than the current share price suggests.
TUI - Bookings pick up significantly
TUI was hit by the Corona pandemic like almost no other company. From one moment to the next, the business almost completely collapsed. The Company was only able to stay afloat with state aid. Now that the Corona measures have fallen virtually everywhere, demand should pick up again. Even though travel has become much more expensive due to inflation, the desire to travel is still there. Even if some may only take one vacation, the higher prices more than make up for it.
On December 14, the figures for fiscal year 2022, which ended on September 30, were presented. There was strong business performance, particularly in Q4, with positive adjusted EBIT in all business segments for the first time since the pandemic. Total bookings were 13.7 million, while guest numbers reached 93% in the same quarter from 2019. Group revenue increased by EUR 4.2 billion YOY to EUR 7.6 billion, driven by strength in demand. On the bottom line, the last fiscal quarter brought adjusted EBIT of more than EUR 1 billion, despite the flight disruptions. Bookings for the winter season are at 134% year-on-year and approaching pre-Corona levels.
Given the increase in winter bookings, which should further boost revenues, a positive outlook can be taken for the summer business in 2023. All the more so as it can be assumed that the problems at the airports will not be as severe this year as in 2022. That alone would save TUI costs of EUR 58 million incurred in 2022. The only risk is that travel demand declines significantly due to inflation. TUI's share price has been rising since the beginning of October. At the moment, one pays EUR 2.02 for a share certificate. Only closing prices below EUR 1.50 would break the established upward trend.
Manuka Resources has the greatest upside potential. As soon as silver production starts, more money will flow into the coffers. In addition, with vanadium, one has a critical raw material in the portfolio, which is extremely important for the energy turnaround. In second place is TUI, which has already had a strong run and has fought its way back into the profit zone. If inflation continues to decline, booking levels should remain high. Nel ASA is not yet profitable. The hydrogen market remains highly exciting, but no company can survive in the long term without profits.
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.
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