November 24th, 2022 | 12:40 CET
New year, rising prices? BASF, BioNTech and Manuka Resources - Shares in check
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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
Manuka Ressources: Facing a revaluation due to vanadium project?
Manuka Ressources is certainly not known to many investors in this country. But the gold and silver producer is worth a look. Why? For one, Manuka has two projects - Wonawinta Silver and Mt Boppy Gold - that are already in production. They are now the largest silver producer in Australia. In the last fiscal year (ended June 30), Manuka generated revenue of AUD 53.5 million and a positive operating cash flow of AUD 8.9 million. There should be new data on Mt Boppy in the first quarter of 2023. On this basis, a decision on a production expansion will be made later in the year.
In addition to the profitable operating business, Manuka took advantage of an opportunity in the summer of 2022 and secured an exciting project in New Zealand: the South Taranaki Bight project (STB project). This project is a VTM (vanadium-titanium-magnetite) iron sands project. It is said to have a resource potential of 3.8 billion tons. A preliminary feasibility study is already available, and the potential annual vanadium production is estimated at 55 million pounds. This could make it the world's third-largest vanadium producer after China and Russia. Vanadium is a relatively unknown metal, but all the more important. Among other things, it is needed for batteries and is, therefore, an important element for the energy transition. It is, therefore, not surprising that it is counted among the critical raw materials by the US, the EU and Australia. On the stock market - the share is also traded in Frankfurt - Manuka is currently valued at AUD 72 million. That is not too much, given the Company's profitable core business and the importance of vanadium. Those interested should note December 7, 2022, in their calendars. The Company will then present at the 5th IIF online investor conference. Participation is free for interested investors (click here to register ii-forum.com/timetable-5-iif).
BioNTech: Newsflow in sight
With a market capitalization of EUR 38 billion, BioNTech naturally plays in a different league. But for the German biotech star, things have been anything but good on the stock market this year. From EUR 212 at the start of the year, the share price fell to EUR 123 within a few weeks. Since then, the share price has moved sideways with significant upward and downward fluctuations. Since the end of October, the mood has improved considerably, and the share is again trading above EUR 150. The reason: investors are increasingly focusing on the development pipeline of the Mainz-based company. And this is full to bursting.
Thanks to the billions in profits from the COVID-19 vaccine, the Mainz-based company can go full throttle with development, especially in cancer research. The pipeline currently comprises 19 product candidates in 24 ongoing clinical trials. Accordingly, there should be a tidy newsflow at the Mainz-based company in the coming year. BioNTech, for example, has announced new data from up to 10 clinical trials for 2023.
And, of course, there is the ongoing revenue from the COVID-19 vaccine - even if it is declining. In the current year, revenue is expected to be in the range of EUR 16 to 17 billion. At the end of the third quarter, BioNTech already had a bulging treasury. The Company had EUR 13.4 billion in cash and cash equivalents. In addition, a large part of the EUR 7.3 billion in trade receivables outstanding at the reporting date had already been received. As a result, the Company is fully financed for the coming years. To put this in perspective: in the current year, costs for research, sales/administration and capital expenditures total a maximum of EUR 2.6 billion.
BASF: Analysts cautious
Fundamentally, BASF is currently favorably valued. Despite the turmoil on the energy market, the DAX-listed group performed better than analysts expected in the third quarter. Sales rose by 12% to EUR 21.9 billion. EBIT (after special items) of EUR 1.29 billion was down on the prior-year quarter (Q3 2021: EUR 1.82 billion), but the profit is still decent. EBIT (before special items) of between EUR 6.8 billion and EUR 7.2 billion is forecast for fiscal 2022. If the worst-case scenario with blackout and long winter does not materialize, BASF, with a market capitalization of EUR 45 billion, is anything but expensive. However, the share price has also risen by over 30% within a few weeks.
Therefore, analysts are currently cautious. Only yesterday, Baader Bank warned against write-downs. In the analysts' view, the high inventory levels and poor economic outlook will likely lead to high write-downs in the chemical sector. Should BASF have to close parts of its Ludwigshafen plant temporarily, high write-downs would be unavoidable. Jefferies is also cautious. The analysts rate BASF shares as "hold" with a price target of EUR 49. They, too, fear that the current quarter will be challenging in the chemical industry.
Stock market analysts are hoping for a good year in 2023. Numerous study results are pending at BioNTech. If these turn out to be predominantly positive, further increases in the share price are likely. 2023 will also be important for Manuka Resources. In the first months of 2023, there will be news about the gold project. In addition, vanadium will come more and more into focus. BASF is more dependent on external factors such as the gas price and the global economy.
Conflict of interest
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