May 24th, 2022 | 13:26 CEST
Plug Power and BYD shares are strong: when will Almonty Industries take off?
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"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Almonty: When will the stock take off?
Almonty shares have been trading in a narrow range between EUR 0.56 and EUR 0.73 for several months. However, the chances are good that the tungsten producer will soon break out to the upside. The Company is making good progress in completing its Sangdong mine in South Korea and has secured financing. Almonty CEO Lewis Black was confident at last week's IIF investor conference, saying, "The Sangdong mine dwarfs all other global tungsten mines. It is in a politically stable country, about 3.5 times larger than usual projects and offers a lot of potential for scale. That is why we have been able to attract tier-one financing partners." As early as 2024, Almonty will be responsible for 30% of tungsten production outside of China, and the trend continues to rise. The full presentation is available here.
Almonty is making great strides toward the start of production. With the closing of a USD 3.3 million private placement, the final condition precedent for the release of the USD 75.1 million KfW financing has been met. The funds are expected to flow before the end of May. In addition to CEO Lewis Black and the Austrian Plansee Group, Deutsche Rohstoff AG is also one of the anchor shareholders, with around 12.2% in the promising company. The potential is huge. Tungsten is indispensable for the modern high-tech industry, thanks to its outstanding properties. In the field of electromobility, tungsten is on its way to overtaking the environmentally harmful cobalt. The problem with the tungsten market and the opportunity for Almonty: China has a quasi-monopoly with a market share of around 80% of global production. Russia is responsible for another 7% of the global supply. Therefore, it is not surprising that the EU has placed tungsten high on its list of critical raw materials. Almonty should therefore have no problems finding buyers for its production volumes. For more details on the Company and the market, interested parties can refer to a study on researchanalyst.com.
Plug Power: Political support and large order
The Plug Power share was one of the winners of the past week and is starting the new one on a friendly note. Yesterday the security of the hydrogen specialist was over 1% in the plus at EUR 15.63. Thus, the disappointing quarterly figures - the loss more than doubled to USD 0.27 per share compared to the previous year - seem to move more and more into the background. Instead, investors are focusing on Plug Power's future prospects, which look promising. Hydrogen is expected to replace fossil fuels worldwide in the long term and is being promoted accordingly by governments. This is particularly true for Germany due to its dependence on Russian natural gas. As recently as mid-May 2022, the German government invested a further EUR 2 billion in hydrogen research. In addition, the EU presented its REPowerEU plan last week. Green hydrogen is an essential component of the plan. A production capacity of around 10 million tons is to be built up in the EU by 2030 and a similar amount imported. In addition, Plug Power was able to land a major order - something that Nel shareholders, for example, have been waiting for for some time. Plug Power will supply an electrolyzer for the production of green hydrogen to H2 Energy Europe. With a capacity of one gigawatt, it is the largest electrolyzer order ever, according to Plug Power. The plant is to be built in Denmark and will, among other things, supply Hyundai fuel cell trucks with green hydrogen. H2 Energy also plans to build more than 250 hydrogen refuelling stations in Denmark, Germany and Austria in a joint venture with energy company Phillips 66.
BYD: Credit Suisse expects rising margins
The BYD share also shone with relative strength last week. The Chinese electric car and battery producer was able to decouple itself from the overall negative market and the lockdowns in China. A positive commentary from Credit Suisse contributed to this. Thus, the price target was raised from HKD 350 to HKD 368, and the rating "Outperform" was confirmed. The performance in the first quarter of 2022 had been in line with expectations. Going forward, Credit Suisse expects BYD's margins to increase. Among other things, higher sales prices for electrified vehicles should contribute to this. BYD had announced that it would focus on pure electric cars and hybrid vehicles in the passenger car segment with immediate effect. The many pre-orders for the new Denza D9 luxury sedan are also positive. BYD plans to introduce two more Denza models in the current year. These are to be SUVs for the middle and luxury classes.
Relative strength is an important indicator in volatile times. BYD and Plug Power are currently shining with it. And in the case of Almonty, too, it seems to be only a matter of time before the share picks up.
Conflict of interest
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