Olympic turnaround expected: TUI and Lufthansa bombed out, dynaCERT on the move, and BayWa poised for a comeback!

BayWa - A shareholder loan provides temporary relief

Since July 2022, the BayWa share has lost 65% of its value. The reason: A restructuring is being initiated due to excessive debt. The market is highly unsettled, and the half-year figures were published last week. Revenue fell by 14.8% to EUR 10.7 billion; market experts had expected over EUR 11.2 billion. EBITDA declined to EUR 149.5 million, a drop of 53.6% and dramatically below analysts' estimates of over EUR 220 million. With an EBIT of exactly EUR 0, management has withdrawn its guidance for the current year, as the initial expectation was to achieve an operational result of EUR 365 to 385 million.

In order to support a recovery, the major shareholders are now stepping in. The holding company of the Bavarian cooperative banks, as the largest shareholder with 33.8%, has signaled rapid support but expects to see progress in the restructuring process. At the Annual General Meeting in June, CEO Pöllinger announced socially responsible job cuts and the sale of non-essential business areas. This debt was primarily accumulated by Klaus Josef Lutz, who left the Company in 2023. Lutz transformed BayWa into a conglomerate, expanded globally, and notably built up the renewable energy business as a second pillar of the Company. Currently, it is advisable to let the experts do the math; the published price targets of the analysts are sure to be revised.

dynaCERT - Ready for takeoff

The Canadian company dynaCERT is a technology supplier for the transportation industry across all segments. With its proprietary advanced hydrogen add-on devices like HydraGEN™, diesel combustion processes can be optimized to achieve fuel savings ranging from 8% to 20%, depending on usage. In addition, the soot and nitrogen content is reduced, making the emissions cleaner. The technology is especially well-suited for public transportation companies, logistics firms, and the mining industry to achieve the ESG guidelines and reduce the carbon footprint of entire fleets.

Last week, CEO Jim Payne announced that the Cipher Neutron investment received an Advanced Contract Award Notification (ACAN) to design and build two 250-kilowatt electrolyser stacks for Simon Fraser University (SFU). This groundbreaking project represents a major step forward in the innovation of green hydrogen and its applications in academic and research institutions. Launching in Q4, it will, of course, utilize Cipher Neutron's leading AEM electrolyser technology. The project involves developing and deploying a state-of-the-art half-megawatt AEM electrolyser designed to meet the university's stringent research and operational requirements. The accompanying research initiative aims to develop a scalable next-generation hydrogen production technology. The AEM technology is expected to reduce the cost of green hydrogen production while providing high performance and stability. Cipher Neutron can offer significant advantages here by ensuring the production of high-purity hydrogen with superior energy efficiency.

dynaCERT is working with the VERRA organization to ensure that CO2 certificates can be issued in the future for the use of its technology. As soon as VERRA certifies the HydraGEN™ solutions, there will be tradable pollution rights in addition to the economic incentive from the fuel savings. The DYA share price rose quickly by 100% at the beginning of July. It could rise significantly more this year.

TUI and Lufthansa - Summer debacle instead of vacation dreams

Investors would undoubtedly have imagined things differently. In the middle of the vacation season, shares in the tourism industry are trading at the bottom. Unfortunately, both German giants TUI and Lufthansa are still grappling with legacy issues that pose ongoing recovery challenges. TUI recently issued convertible bonds worth EUR 487 million to buy back old bonds and reduce its debt burden. While these measures reduce interest costs and improve the Company's financial stability, they also increase the number of shares outstanding. However, analysts rate the summer business positively and see a green light again in the cruise segment. **It is likely that the EUR 6 mark can be stabilized.

At Lufthansa, there are repeated reports of cancellations by climate activists. Claims for damages often come to nothing here, as nothing can be recovered from the individuals concerned. In addition, Lufthansa has recently lagged behind other airlines in international service comparisons. Germany has not been an easy market since the COVID-19 pandemic, which is severely hampering Frankfurt's long-term prospects. Rising prices are also not an effective means, as they reduce the load factor because customers can fly cheaper with the competition. Add to this the computer glitch with CrowdStrike, and the adversities are piling up conspicuously. Now, a major competitor of Lufthansa has also presented weak figures, and tomorrow, the time has come for Lufthansa. The Swiss investment bank UBS is still flying the flag and has left its rating for Lufthansa at "Buy" with a target price of EUR 12.30. However, the consensus on the Refinitiv Eikon platform has dropped significantly to EUR 6.50. A technical breakthrough above precisely this level would be crucial. Until then, it is advisable to stay cautious.

Investors currently have to contend with many challenges. Geopolitical uncertainties, profit warnings, and a one-sided shift of all share purchases into the AI sector are causing many opportunities in other segments to be overlooked. BayWa could manage a recovery, as could TUI and Lufthansa in the medium term. For the Canadian company dynaCERT, things are expected to take off in the short term.