November 23rd, 2021 | 10:12 CET
Nordex, Memiontec, JinkoSolar: Where sustainable returns await
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Nordex: When will the wind change?
The wind turbine experts at Nordex are perfectly positioned when it comes to the energy of the future. For years, Nordex has been erecting wind turbines primarily in the North Sea and therefore has expertise in all aspects of the future business. But is this enough for a successful share price performance? In recent quarters, the Company has made it clear that it has been working on efficiency and has developed a new platform to cut costs to this end. In the meantime, a large part of the new business is already being processed via this new Delta 4000 platform. But if you look at the operating margin, it is still only around 2.5%. In 2021 as a whole, this margin is expected to increase to a value of up to 5.5%. However, this is still not a liberating blow for Nordex.
The share has been languishing for a year and lost almost 10% of its value in the period. There is no turnaround in sight in the short term, either. Nordex wants to gain a foothold in India and make a breakthrough there, but the market launch is likely to be associated with risks. Although Nordex is making an important contribution to the energy transition, investors remain skeptical. The stock is not very attractive in the short and medium-term.
Memiontec: Secure earnings around water
The situation is somewhat different for the water treatment specialists from Memiontec. Here, the share price rose by double digits during the past five trading days alone. Memiontec is based in Singapore and is mainly active in Indonesia, but also on the domestic market and in China. Memiontec supplies complete solutions for water and wastewater management and tailors these modular packages to individual customers. In addition to the national water authority PDAM, Memiontec also works with the infrastructure developer Jakpro and other companies in Asia.
What makes Memiontec's business special is that the Company has expanded its range of services to include long-term maintenance contracts that ensure revenue even after a project has been completed. In addition, there are sales agreements relating to purified water, which often have a very long-term duration and can thus also be regarded as a stable pillar in Memiontec's business. Since clean water will be a central topic of the future and Asia, with its many urban centers is significantly dependent on clean water, the Memiontec share can be an exciting alternative for speculative investors. The Company has been on the market for twenty years and has built up a good business around water treatment.
JinkoSolar: Are ESG risks lurking here?
JinkoSolar is also doing good business - the prices are right, as is the quality. In addition, the Chinese Company should have fewer problems obtaining the necessary raw materials for production. But there is also a risk involved: Chinese mines are sometimes considered dirty and cannot be reconciled with many Western environmental protection and sustainability standards. If you look closely along the supply chains, you are likely to discover ESG risks in JinkoSolar's products as well - photovoltaics or not.
Nevertheless, the share is currently exciting: The value is trading shortly before a resistance zone around EUR 60. Further tailwind from the overall market or the Company itself is necessary for the share to overcome this resistance. However, after the rally of around 75% in three months, investors should not expect too much. It may well be that JinkoSolar needs to gain momentum first.
The Memiontec share has gone through a consolidation phase and recently broke out of this formation to the upside. Although the water specialist also still faces resistance at SGD 0.89, the chart picture here looks more promising in the short term than at JinkoSolar. While the chart of Nordex hardly makes you want to invest and JinkoSolar has already performed well, Memiontec could offer opportunities in the short term. With a market capitalization of around EUR 110 million, the share remains a small cap that is correspondingly speculative.
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