May 5th, 2021 | 10:00 CEST
NIO, Geely, IBU-tec, Silkroad Nickel - Attention, watch closely here!
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"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
NIO - Chip shortage and price correction
Chinese electric carmaker NIO reported mixed results in its latest quarterly report for Q1 2021, unexpectedly reporting a loss of about USD 70 million. While revenue increased 482% year-on-year, significantly exceeding analysts' expectations, the stock market sentiment continued to dampen. The stock has already lost 45% from its January high.
The good news is that NIO once again saw brisk demand for its cars. In total, NIO delivered 20,060 vehicles for the quarter. The majority of sales currently continue to be made in China and the US. The Company is presently offering three different models: A sedan, a premium SUV and a coupe version of an SUV. In terms of the product range, this meets current demand trends, and sales figures are rising continuously.
However, the supply chain is causing problems in particularly scarce components such as semiconductors. The Company has already had to halt production at one of its plants in Hefei province for five days. During its quarterly earnings presentation, NIO further noted that it has begun planning and building a new plant at Xinqiao Industrial Park in Hefei, which should help create new production capacity. Whether this will help NIO stock move higher again in the short term remains to be seen. From a chart perspective, keep an eye on the EUR 30 mark.
Geely Automobile - Billions for the e-Lotus
Geely is a Chinese car and motorcycle manufacturer with around 80,000 employees. The Company has seven sites for the complete production of motor vehicles; the turnover in 2020 is about HKD 140 billion. The "Geely International Corporation" responsible for exports and imports was founded in 2002 and is based in Shanghai.
Geely now wants to electrify the British sports car legend Lotus. In the summer of 2019, the first pure electric sports car was already launched on the market, but its sales success was manageable. Lotus stands for British engine and vehicle efficiency, and the Company is also known for its successful F1 team, which was sold to the French automotive group Renault in 2015. The traditional British manufacturer wants to build e-sports cars in the UK together with Geely, using the GBP 2.5 billion injection from China.
Geely is risking quite a lot with the Lotus commitment because, for years, only a few thousand cars have been coming off the production line at Lotus. In the future, however, it should be more than 10,000 units per year. So far, the Geely share has not reacted very enthusiastically to this plan; last week alone, the price lost around 10%. From a chart perspective, weak support could be identified at around EUR 2.00. If this line does not hold, the short-term target could be EUR 1.70.
IBU-tec - Next generation battery materials
The growth ambitions of e-car manufacturers are based on the expectation that battery raw materials will be available in sufficient quantities. Since the offensive of the German manufacturers, IBU-tec from Thuringia has also integrated this into its business model, as it aims to develop from an industrial material supplier to a battery specialist in cooperation with renowned research institutes.
In the fall of 2020, IBU-tec announced that it would offer its first own battery material for electric cars and stationary energy storage from 2021. Meanwhile, the Company continues to ramp up activities in this area. IBU-tec will also participate in three funded research projects to further develop innovative battery materials. These projects aim to develop new battery materials for e-mobility as well as for other industry-relevant applications.
Partners include the renowned Fraunhofer-Gesellschaft, the Technical University of Braunschweig and several well-known companies from the automotive industry. In addition to opening up new combinations of materials and application areas, the Company also wants to drive forward its battery products. According to IBU-tec, the future of battery construction is the development of lithium iron phosphate battery cells, which are already finding favor with well-known suppliers and OEMs. IBU shares recently jumped to EUR 50 and were trading at EUR 39 yesterday. In just 12 months, the Thuringians have already gained 218%, and the current consolidation is still in the uptrend.
Silkroad Nickel - Raw materials for future batteries
Silkroad Nickel is an Indonesian mine operator that mines scarce industrial metals such as nickel and cobalt and processes them until they are ready for export. The Singapore-listed Company has deliberately associated itself with the Silk Road, as the central rail link from Asia to Europe runs alongside this route and ends at the German industrial site of Duisburg, a key location for European blast furnace and iron-smelting operations. For centuries, essential trade relations with Asia have run along this route.
In addition to firm supply agreements with China's Tsingshan, the world's largest stainless steel producer, Silkroad is also investing with other Chinese partners in a plant to produce battery base materials. Indonesian nickel products have a global reputation, but much of the production is state-owned.
Important for Silkroad Nickel is its independence and flexibility as a listed company. Like IBU-tec, this allows it to participate in the e-mobility megatrend with further investments as both nickel and cobalt from its laterite ore and the lithium from its cooperation partner Ganfeng Lithium Co, are highly relevant for major international key customers in the vehicle industry. Nickel is also an important raw material for refining iron into stainless steel.
From today's perspective, Silkroad Nickel is excellently positioned to grow strongly with the current technology boom despite the pandemic. The prospects are unfolding in parallel with the exponential development of e-mobility and the shortage of raw materials in the current economic upturn.
Silkroad's share price stands at SGD 0.42 in Singapore, bringing its market capitalization to around SGD 105 million. Due to the large spread in Frankfurt, please be sure to limit or buy on the home exchange.
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