20. September 2021 | 13:21 CET
Palantir, AdTiger, Deutsche Bank - The digital revolution is on!
Digitization - for years, this term has been omnipresent in political debates and the subject of what feels like every third talk show. The individual protagonists never tire of emphasizing the countless benefits of digitization. The overriding goal is to further improve the quality of life for everyone and to make education accessible to all. Optimally implemented, this would unleash new economic and ecological potential. The German government is spending more than EUR 5 billion on this in 2021, and digitization has already been a fixed item in companies' spending budgets for years. We take a look at different business models.
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ISIN: PALANTIR TECHNOLOGIES INC | US69608A1088 , ADTIGER CORP.LTD. | KYG009701064 , DEUTSCHE BANK AG NA O.N. | DE0005140008
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.
Palantir Technologies - Like a spider in the web
The American Palantir Technologies is like the spider in the web when it comes to data mining. The Company is a pro at collecting and analyzing consumer and movement data from thousands of people. Its most lucrative clients come from the government sector, where Palantir is repeatedly booked for highly sensitive issues. In the civilian sector, Palantir has big ambitions to disrupt the siloed ERPs and CRMs of the corporate world through its success in the government sector.
Following criticism from data privacy advocates, the UK government terminated a controversial contract with Palantir. Last August, the UK Department of Health and Social Care issued a tender to replace the Palantir Adult Social Care Dashboard system it was using. The successor system will be provided by British defense giant BAE Systems. Palantir may have to work on its privacy rules first to get back into UK government contracts.
With estimated revenues of USD 1.5 billion in 2021, the Company will grow to nearly USD 4 billion in just four years, a rate of plus 27% a year. Profits are on an even steeper upward trajectory from the current USD 370 million to USD 1.2 billion. The margin is considerable at just under 30%. The only downside is that with a market capitalization of USD 56 billion, Palantir is already paying a price-to-sales ratio of 37. The P/E ratio is, of course, beyond 100, as is the case with many NASDAQ stocks.
Palantir stock has become a darling on the NASDAQ in recent weeks, rising over 30% since July from USD 22 to about USD 29. If it manages a sustained jump above USD 30, the stock should continue its recent uptrend to an all-time high of around USD 45.
AdTiger - Digital advertising with artificial intelligence
Far smaller than Palantir, but no less interesting, is AdTiger, a grown online specialist from Asia. The Company mainly places advertisements on well-known websites, such as Facebook, Google, Twitter, Snapchat and even TikTok.
In doing so, AdTiger uses its technology to achieve high hit accuracies concerning the target group, and this is done with the help of its own optimization platform AdTensor. Algorithms and artificial intelligence are used to generate the best possible conversion potential for ads. Only when an ad has been seen, read and understood can it lead to a veritable further click, leading to the desired monetization for the client. AdTensor automatically connects to the most popular online platforms and collects valuable tracking data in the background via an API connection.
In contrast to the big players on the Chinese tech market, AdTiger is still manageable in size, yet it already occupies a significant place in 'digital marketing'. The growth rates in performance marketing are enormous, especially in young target groups with a high inclination to consume. The agency's customers are mainly in China, and AdTigers' position as a lead agency for Google and Facebook is outstanding.
Investments in the Company's platforms continue dynamically; in the future, the Company also wants to invest in developing apps and expanding internationally. This is done with its own investment company out of Qingdao. In 2020, AdTiger was named the fastest-growing digital marketing company of the year at the IAI International Advertising Awards. The business model is very robust to the pandemic.
AdTiger is listed on its home exchange in Hong Kong under the symbol 1163 and also in Frankfurt. Its market capitalization is currently HKD 511 million, the equivalent of EUR 54 million. With its attractive positioning, the share is one of the growth pearls within the peer group.
Deutsche Bank - Heavy investment in digitization
Deutsche Bank has had to completely reposition itself in several stages between the financial crisis of 2007 and 2010. At the turn of the millennium, the strong investment business was constantly downsized, and the process landscape increasingly digitized. The digital Bank24 was ultimately not particularly successful and was reintegrated again, and the liaison with Postbank also failed due to many digital integration issues. However, the bank learned to survive and now focuses on high net worth individuals and corporate finance. Deutsche Bank is classified as a systemically important financial institution by the Financial Stability Board (FSB). It has been on the list of globally systemically important banks since 2011.
With all the regulatory pressure weighing on the European banking landscape, the big banks could hardly survive without a digital revolution. The entire onboarding and KYC processes must run perfectly digitally in order to serve a large volume of customers with top service. As a result, the investment budget in information technology regularly reaches billions. Digitization will affect all customer and product groups. Ultimately, the financial industry must link advice, sales and financial products into innovative business models.
Deutsche Bank is proving to be very innovative in this regard, and investors are growing more confident after the most successful half-year since 2015. The Group's restructuring is making progress, costs are falling, and CEO Christian Sewing expects significantly fewer loan defaults due to the Corona Crisis than previously estimated. In Q2, the Company achieved a pre-tax profit of EUR 1.2 billion, which means a bottom-line profit of EUR 692 million for shareholders after a loss of EUR 77 million in 2020. If the EUR 11 mark is overcome in chart terms, only the interim high of EUR 12.57 remains in the picture. Then the party can continue.
Digitization is one of the megatrends since the pandemic outbreak. Almost every business model has to face a test. Palantir and Deutsche Bank have invested billions in the topic. AdTiger is a fully digitized company with a good market position and low valuation.