October 25th, 2023 | 08:10 CEST
New stock favorites? BYD, JinkoSolar, dynaCERT
Table of contents:
"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
dynaCERT: Is the breakthrough in emission certificates imminent?
Does the dynaCERT share currently offer investors an exciting entry opportunity? The Canadians have been on an operational streak for several weeks. Among other things, a significant order for 161 HydraGEN™ units was reported. These units are going to various mining companies in South America via a distribution partner. The HydraGEN™ units will be installed in the heavy trucks of these companies. Mining companies are under increasing pressure to reduce their CO2 emissions to meet environmental and ESG requirements - including from customers in the US and Europe. In addition, more and more companies are testing the electrolyser offered by dynaCERT and partner Cipher Neutron for hydrogen production. So when sentiment in the hydrogen sector picks up, dynaCERT should benefit.
But even before that, dynaCERT has a real game-changer in the pipeline that could significantly boost the stock. The Company now seems to be clearing the last hurdle to obtain the important Verra certification for emission certificates. Earthood Services Pvt. Ltd. is working to complete an assessment report on the methodology for improving the efficiency of fleet vehicles and internal combustion engines. dynaCERT announced yesterday that results should be available no later than December 31, 2023. The technical test results could even be expected as early as mid-November. In early 2024, Verra is expected to complete the certification process, allowing dynaCERT to generate additional revenue. That is because, in the future, customers' carbon credits are to be sold through the use of HydraGEN™ Technology, with dynaCERT receiving 50% of the proceeds.
BYD: Strong figures, positive analysts
There is also a lot of positive news at BYD at the moment. Last week, the Chinese car company surprised with positive quarterly figures. While competitor Tesla had to report falling profits, BYD's cash register is ringing. The growth driver is the expansion outside China. According to preliminary calculations, BYD's net profit is expected to increase by up to 102% to up to CNY 11.5 billion in the third quarter. BYD thus shows itself largely unimpressed by the price war with Tesla and the growing number of competitors. UBS was also impressed by the figures, which exceeded market expectations. BYD has been able to command higher prices and keep costs under control. For analysts, BYD is a top pick in the sector. The price target is HKD 345.
Unfortunately, the "China risk" continues to weigh on the share price. There is probably no other explanation for BYD shares trading just below EUR 30, the same level as at the beginning of 2021. The market capitalization of EUR 86 billion is below that of Mercedes (approx. EUR 90 billion).
Can JinkoSolar shake off the SolarEdge burden?
Last week, SolarEdge's profit warning dragged the entire sector down. But operationally, not everyone is doing poorly. JinkoSolar, for example, also reported more orders after reporting compelling numbers. The latest was an order from Saudi Arabia's power plant developer ACWA, according to which JinkoSolar will supply modules with a capacity of 1.581 GW for the Al Kahfah project and 2.257 GW for the AR Rass 2 project. Yunhe Lv, Executive VP of ACWA China, praised the quality of Jinko's products, saying, "The N-type TOPCon technology will help our solar projects meet performance targets to provide clean energy at competitive prices for desalination and hydrogen production, as well as for our customers in the Middle East."
Previously, the Chinese solar company reported projects in Nigeria and Japan. To Solarmate Engineering in Nigeria, Jinko will supply an energy storage system. The order in Japan has already been completed. There, Jinko has supplied an energy storage system with a capacity of 15 MWh in combination with 5.7 MW solar modules to Grand Works.
The current market situation is not for the faint of heart. However, opportunities also arise in such situations. BYD and JinkoSolar are developing into market leaders in their future industries - if only the "China factor" did not weigh on the shares. In contrast, dynaCERT is just beginning to roll up its market. Certification by Verra and the associated entry into emissions trading would be a game-changer for the Company and its shares.
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