August 17th, 2023 | 08:30 CEST
Plug Power, JinkoSolar, Altech Advanced Materials: Only one share is strong
Table of contents:
"[...] When we acquire something, we want to make sure that the acquisition fits with our strategy and has the potential to be successful for our shareholders. [...]" John Jeffrey, CEO, Saturn Oil & Gas Inc.
Altech: Better than Tesla?
E-car pioneer Tesla is working flat out on its new generation of batteries. Mass production of the "4680" cells is to start next year with partner Panasonic. The new battery packs are to be installed in the Model Y, the Semi e-truck and the upcoming Cybertruck, among others. Germany's Altech Advanced Materials wants to eclipse Elon Musk's company, and investors seem to think this is possible. Altech shares, for example, have gained 250% this year and are now trading at EUR 14, putting its market capitalization at EUR 110 million. Despite the fulminant price development, the share is not correcting significantly - which would not be a surprise - but is consolidating sideways. The relative strength is also due to the fact that further exciting newsflow can be expected in the fall. Altech Advanced Materials is working with its partners on two battery revolutions.
In the field of lithium-ion batteries, the Company wants to achieve a quantum leap in battery performance and battery density. The Silumina Anodes is being developed for this purpose. This innovation relies on the use of a patented ceramic nano-coating technology for graphite-silicon anodes - the result: high range, more power and lower costs. The pilot plant is currently being built in Saxony and is nearing completion. The Silumina Anodes material is to be produced as early as the third quarter so that customers from the automotive industry can test it. The raw materials graphite and silicon for mass production are to come from Europe. SGL Carbon and Ferroglobe have been brought on board for this. The economic feasibility study shows an annual EBITDA of USD 65 million and a value of over USD 500 million. Altech Advanced Materials holds a 25% stake in Silumina.
But Altech has a second hot battery iron in the fire: together with Fraunhofer IKTS, they are developing the CERENERGY® Sodium-Chloride Solid State battery (SCSS). The aim is to tap into the huge market for battery energy storage systems. In order to finally be able to store inexpensive energy from solar, wind & co., low-cost storage systems are urgently sought after. The market volume is expected to explode from USD 4.4 billion in 2022 to USD 15.1 billion by 2027 - and the trend is rising. Altech and Fraunhofer want to conquer the market with a solid-state battery based essentially on common salt and nickel. It has a lifespan of more than 15 years without sacrificing performance, is fire and explosion proof and does not require critical raw materials such as cobalt, copper and lithium. The feasibility study is expected to be published later this year. Sales to customers such as utilities and industrial plant operators are scheduled for 2025. Altech Advanced Materials holds an 18.75% stake in this potential billion-dollar business.
Plug Power: Target price significantly reduced
There has been no talk of consolidation at a high level for Plug Power for a long time. In the past 52 weeks, the shares of the hydrogen specialist have lost around 72% in value. At EUR 8, the share is trading at the level of summer 2020, and the market capitalization is still a proud USD 5.34 billion.
Although most analysts recommend the share as a buy, the support is crumbling due to disappointing quarterly figures, including a high loss. Most recently, Roth MKM downgraded Plug Power shares from "buy" to "neutral." In addition, the analysts of the investment boutique have significantly reduced the price target from USD 13 to USD 7.50. From the analysts' point of view, the US company is unlikely to resolve the issues with its gross margin quickly. A cash burn of more than USD 1.6 billion in 2022 puts revenue growth into perspective. In addition, Plug Power might need a capital measure before reaching break-even.
JinkoSolar: Strong figures do not help
JinkoSolar's half-year figures are something to behold. Sales increased by 60.5% to CNY 53.6 billion. The net profit of the Chinese solar group increased by an impressive 324.5% compared to the same period last year, reaching CNY 3.8 billion. According to JinkoSolar, the high growth was due to strong sales of its high-efficiency cells and modules with passivated N-type tunnel oxide contact, which have higher photoelectric conversion efficiency and gross profit margin. Demand for these modules exceeds production capacity, the Company said. Production volumes are expected to expand further during the year. JinkoSolar said it was on track to sell a total of 70 to 75 GW of solar modules this year, up from 44.5 GW last year.
The only downside was the announcement of a capital increase - JinkoSolar plans to raise CNY 9.7 billion via a private placement. The major part of the proceeds is to be used to partially finance a PV industrial park. A giant complex for the production of monocrystalline silicon rods, wafers, cells and modules is to be built in northern China's Shanxi province. The project, which will be built in four phases, is expected to be operational from the first quarter of next year and completed by the end of 2025. Investment costs total CNY 56 billion. In addition, a factory is also to be built in the US state of Florida.
Despite the strong figures, Jinko shares are trading at a new annual low of EUR 31.50.
A purchase of the Jinko share, which has been favorable for years, is currently not compelling. Investors do not seem to trust the strong figures but are probably more concerned that the high investments could lead to overcapacity. At Plug Power, reaching for the falling knife is also unlikely to be worthwhile. Being dependent on capital measures in the current interest rate environment could become problematic. A capital increase is, therefore, likely. In contrast, the shares of Altech Advanced Materials shine with relative strength. With positive news in the fall, the stock could reach new highs.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.