16. December 2020 | 10:22 CET
NIO, Osino Resources, Baidu - E-mobility, the giants are coming!
E-mobility has been one of the hottest topics on the global capital markets this year and will remain so next year - however, high price fluctuations are to be expected. Demand for shares in e-car companies remains high. While Tesla seems to have run a bit hot, Chinese player like BYD, NIO, Li Auto and Xpeng are still on investors' buy lists. And more big players are about to enter this segment.
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ISIN: CA68828L1004 , US0567521085 , US62914V1061
Gold shines again
What should also move back to the front of the investor list are gold mining stocks. After the gold chart sustainably held the critical support line at USD 1,800, the next minor resistance is at USD 1,900. If successfully overcome, the all-time high at USD 2,075.19 beckons. That mining shares then develop disproportionately strong, can be observed several times in the past. An exciting pick, which has already been recognized by institutional investors such as Rothschild or Mackenzie Investments, is the share of the gold explorer Osino Resources, which is active in Namibia. The flagship project of the Canadians is Twin Hills Central, which is located southwest of Otjikoto and has been defined with a length of 1.3 km so far.
In mid-November, the Canadians came up with fantastic, high-grade drill results. In total, 108 drill holes have been drilled since August 2020 for a total length of 25,000 meters. Company management was more than positively surprised by the drilling results. It was announced that economic mineralization at Twin Hills Central could more than double to over 3000 meters of strip length to the east. These discoveries provide insight into the significant growth potential of the entire Twin Hills Central gold deposit and nearby satellite bodies along the strip and on parallel trends. The positive results at Twin Hills West and Barking Dog are the best drilling results to date in these areas. Exploration will be expanded over the next year.
Even before the successful drilling results, Osino Resources was rated a "top pick" for the fourth quarter of 2020 by analysts at Echelon Capital Markets. The price target was set between CAD 2.30 and CAD 2.45. The current price is CAD 1.20. Given the new, positive developments, the analysts will certainly reconsider their stated target range.
A new player in the e-mobility industry?
The successes of Tesla and BYD are attracting technology leaders from outside the industry. Technology group Baidu, for example, is looking into building its own electric car. The Chinese competitor of search engine provider Google is currently looking for a suitable car manufacturer. According to insiders, a joint venture with a carmaker is planned, with Baidu holding the majority. Besides Geely, the Guangzhou Automobile Group and the China FAW Group are under discussion.
Technology already developed
Similar to Amazon, Alphabet or Tencent, Baidu has been developing technology for autonomous driving for some time. One partner in this is Volkswagen. The Company already operates the autonomous cab service Go Robotaxi in Beijing and plans to expand it to 30 cities over the next three years. Last week, Chinese authorities approved testing five cars in the capital, Beijing, with no driver in the car.
Continued strong growth
Chinese manufacturer NIO has been successful in the electric car sector for some time. Now NIO is taking advantage of its high share price to further fill its coffers by issuing new shares. At the end of September, cash and cash equivalents already stood at USD 3.3 billion. The new shares are to be issued at a price of USD 39.0. In total, the automaker could receive USD 2.65 billion in fresh money, and even USD 3.05 billion with the exercise of the greenshoe. The proceeds are to be used primarily for research and development of new products, for the next generation of autonomous driving technologies, expansion of the sales and service network, and market penetration.
Experts remain positive
The analysts at Deutsche Bank continue to issue a "buy" recommendation with a price target of USD 50. The Company's growing brand awareness is a result of a significant year-on-year increase in customer recommendation rates and a production increase to 7,500 vehicles per month for January 2021. Deutsche Bank analyst, Edison Yu, also expects "continued record sales heading into the Chinese New Year." In addition to its impact on the capital market, there is also positive strategic news.
A cooperation agreement was reached with utility State Grid earlier this week. The two partners plan to cooperate more closely in the area of charging technology for electric cars. In addition, NIO and State Grid EV Service are working together on the development of so-called V2G (vehicle-to-grid) technologies to avoid peak loads in the power grid. Thus, the goal is for vehicle charging to occur during periods of generally low electricity demand.