Nel, Bitcoin Group, VCI Global with Super Micro Computer: Shares on the verge of a mega rally?

VCI Global: On board with Super Micro Computer

The VCI Global share is likely less well-known to investors in this country. However, this could change in the coming weeks and months, enabling share price gains. The Malaysia-based holding company is active in high-growth sectors such as fintech, AI, robotics, and cyber security. In addition to the NASDAQ, VCIG shares are now also listed on the Frankfurt Stock Exchange. The Company has also established operational links to Germany. A joint venture with Cogia AG, which specialises in artificial intelligence and secure communication solutions, was recently announced. The new company AiSecure Limited - VCIG is the majority shareholder with 70% - will further develop and market the messenger platform developed by Cogia for governments and security-relevant organisations. After the first customers - for example, government organisations or the military - AiSecure is to be developed over the next 12-18 months in such a way that an IPO on the NASDAQ with a correspondingly high valuation can take place. VCI Global had previously published some strong AI-related news. The Company can invest up to USD 30 million in the TalkingData Group. This is a leading provider of big data analyses and AI-supported solutions. Its customers are said to include global corporations such as Google, L'Oréal, PepsiCo and Nike. TalkingData also aims to go public on the NASDAQ.

The latest announcement also promises potential: VCI Global has joined the AI Computing Alliance (AICA). This makes the Company a partner of Super Micro Computer and Fortinet, among others. The alliance aims to install AI Computing Centres (AICCs) worldwide and thus establish an AI ecosystem. The first high-performance computing centre (AICC) will be built in Taiwan and will be one of Asia's fastest AI computing centres thanks to the high-performance H200 Tensor Core GPUs from NVIDIA. With the AICCs, the alliance aims to provide world-class services to governments, financial institutions, and enterprises.

VCI Global will establish an AI data centre in Malaysia for the AICA initiative by mid-2025. This will also serve as a central hub to promote AI research, development and application, drive industry growth, and strengthen Malaysia's prominence in the global AI landscape. The alliance plans to establish more AICCs, including in Singapore, Hong Kong, Japan and Indonesia, to cater to the growing demand for computing power.

Being on board with partners such as Super Micro Computer and Fortinet can only be an advantage for VCI Global. In addition to the operating business, the potential IPOs of the shareholdings are creating share price fantasy. Even if only one of these investments makes it onto the NASDAQ, VCI Global's current market capitalisation of less than EUR 40 million is likely to be significantly undervalued.

Nel share: -35% or +100%

Analysts have provided widely differing evaluations of the quarterly numbers. Predictions range from a doubling of the stock price to a decline of around 35%. RBC has confirmed its "Outperform" recommendation. The price target for the hydrogen pureplay was lowered only slightly from NOK 13 to NOK 12. According to the analysts of the major Canadian bank, in the second half of the year, investors should pay particular attention to the order development of the Herøya production line and the development of licence income.

UBS, on the other hand, sees the fair value of the Nel share at just NOK 4. The share is currently trading at just over NOK 6. Therefore, their recommendation is "Sell". The revenue development in the second quarter significantly missed market expectations, and the operating loss was also substantially above consensus estimates.

Following the spin-off of the fuelling division, Nel reported a 10% decline in revenues from continuing operations to NOK 332 million for the second quarter of 2024. The operating result was NOK -125 million (Q2 2023: NOK -112 million), and the net result was NOK -118 million (Q2 2023: NOK -228 million). Order intake totalled NOK 270 million, an increase of 18% compared to the same quarter of the previous year. At the end of the quarter, the order backlog stood at NOK 2.0 billion. This was 13% less than in the same quarter last year. Cash on hand at the end of the quarter totalled NOK 2.2 billion. In the future, Nel expects a lot from the partnership with the Indian conglomerate Reliance Industries.

Nel CEO Hakon Volldal commented: *"I am very proud* that Reliance has chosen Nel as a partner out of all the electrolyser OEMs in the world. The combination of Nel's technology leadership and Reliance's execution strength will significantly enhance the competitiveness of this platform for the benefit of all Nel customers worldwide. In addition, we expect this agreement to create a very attractive revenue stream in a fast-growing market that we could not have tapped on our own."

Bitcoin Group: Is the correction over?

And how is the Bitcoin Group doing? After tripling, the crypto exchange's share price has corrected significantly in recent weeks.

The crypto exchange's 2023 financial year was largely characterised by the "crypto winter," resulting in low customer trading activity. Turnover fell year-on-year from EUR 8.3 million to EUR 7.8 million. This decline is due in particular to the first three quarters. It was not until the substantial recovery of Bitcoin in the fourth quarter of 2023 that trading activity on Bitcoin.de also increased. The annual result improved from EUR -2.4 million to EUR 1.9 million. The positive earnings performance was primarily based on reversals of impairment losses on the Bitcoin treasury portfolio.

Net crypto holdings increased to EUR 164.8 million as of the 2023 balance sheet date due to the price increase on the crypto market, compared to EUR 70.8 million as of December 31, 2022. Currently, this figure is likely over EUR 200 million. Cash and cash equivalents amounted to EUR 11.1 million, down from EUR 14.9 million at the end of 2022. A dividend of EUR 0.10 per share is to be proposed at the Annual General Meeting on August 30.

As usual, the Company is cautious in its forecast - which is understandable given the volatility of the crypto market. With stable revenue, EBITDA is expected to be slightly positive in 2024. The Company's market capitalisation currently stands at around EUR 297 million.

Nel's latest quarterly figures show that the Company is not out of the woods. The quarter was a setback on the road to profitability. In the second half of the year, losses must be reduced, and incoming orders must increase. Operationally, things seem to be going well at VCI Global. The Company is benefiting from the AI boom, and the two potential IPOs could be real price drivers. The stock should benefit from this. The Bitcoin Group, on the other hand, is dependent on Bitcoin. It seems unlikely that this dependency will change in the foreseeable future.