August 31st, 2022 | 11:46 CEST
Poison pill slows down Nel share - will BioNTech and Almonty Industries soon 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 reaches a milestone and receives the second tranche of KfW financing
The trip by Chancellor Scholz and Economics Minister Habeck to Canada has shown that the issue of reducing dependencies in the supply of raw materials has probably never been more acute than it is today. This applies not only to oil and gas from Russia but also to numerous raw materials from China. For example, photovoltaic and battery production and numerous other high-tech areas are dependent on raw materials from the Middle Kingdom. This also applies to tungsten. And this makes Almonty interesting.
The Canadians operate mines in Spain and Portugal: but the trigger for the share is in South Korea. There, Almonty is currently building the Sangdong tungsten mine. When fully commissioned, the Sangdong mine will be the largest tungsten mine in the world. It would make Almonty responsible for 50% of the world's tungsten production outside China in the future and thus be of strategic importance for the security of supply in Western industrialized countries. For this reason, the project is also being co-financed by the German KfW. The loan commitment totals USD 75.1 million. Of this, the second tranche of USD 4.1 million has just been disbursed.
Almonty says it has reached a milestone in the development of the mine. The adit at the hanging wall has reached the first level. That means exploration and mining work can now be carried out in the ore zone. The progress was achieved despite heavy storms. 220mm of rain were measured in the Sangdong region in just three days at the beginning of the month. It was the highest rainfall in decades. Almonty CEO Lewis Black said, "We are pleased that the Sangdong mine infrastructure has passed this stress test. We see this as a testament to the quality of the engineering work and studies that have been undertaken over the past few years towards the construction of our world-class Sangdong tungsten mine."
Almonty shares are traded in Germany in a narrow range of EUR 0.56 to EUR 0.74 this year (currently EUR 0.66). Considering the importance of the Sangdong mine, the market capitalization of around EUR 140 million appears attractive.
Nel share between hydrogen euphoria and the downtrend
The Nel ASA share is currently battered from a chart perspective. It is surprising because the hydrogen specialist's news situation is positive overall. The Company has a record order backlog, and hydrogen is being produced worldwide.
Most recently, a huge climate package was passed in the US. Then last week, a deal between Plug Power and online giant Amazon also boosted the entire hydrogen sector. However, the Nel share was only able to benefit from this for a short time. It is currently trading at around EUR 1.50. It is thus still in a medium-term downward trend. In November 2021, the Nel share was already trading at just over EUR 2, and in mid-March of this year, it was still at EUR 1.75. What is causing the Company problems is the rising interest rate level. It acts like a poison pill. Like its industry colleague Plug Power, Nel's operating growth is manageable and heavily in deficit.
Will BioNTech shares take off in September?
BioNTech's business is anything but loss-making. The Wiesbaden-based company's Corona vaccine is still flushing billions into its coffers and enabling it to push ahead with a strong product pipeline. Revenue could soon gain new momentum as shipments of the vaccine, which is adapted to virus variants, are scheduled to begin in Germany next week. Of course, this presupposes the approval of further development - something shareholders have been waiting for for some time. As "Der Spiegel" reported, BioNTech and Moderna are to deliver around 14 million doses as early as the first two weeks of September. These are to be vaccines adapted to the BA.1 variant. A few weeks later, vaccines adapted to variants BA.4 and BA.5 could follow. The majority of the orders will probably be placed with BioNTech. As a result, the Wiesbaden-based share should regain momentum and launch a new attack on the EUR 200 mark. The last attempt at the beginning of August ended at just over EUR 180. Currently, the share is trading at EUR 148.
Rising interest rates are poison for the Nel share with its loss-making business. In contrast, the Almonty share seems ripe for an upward breakout. Positive approval decisions should also ensure a good mood at BioNTech in the coming days.
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