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August 8th, 2023 | 09:15 CEST

Powerful movement through the flood of figures - Siemens Energy, Almonty Industries, Nio

  • Mining
  • Tungsten
  • RareEarths
  • Energy
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The second quarter number season is at its peak, and surprises on both sides promise high volatility. BioNTech, the vaccine manufacturer, was hit hard after the end of the COVID-19 pandemic. Siemens Gamesa's wind power business also negatively affected the parent company's balance sheet. There are currently plenty of opportunities in the market, especially for traders.

time to read: 3 minutes | Author: Stefan Feulner

Table of contents:

    Siemens Energy AG - Buy on bad news?

    First, the good news. After the figures for the third quarter, the burdens from the wind power subsidiary Gamesa have now finally been put on the table. In addition, Siemens Energy is not planning a capital increase, as the business beyond the Spanish subsidiary generates cash and went according to plan in the past quarter.

    The figures impressively show how poorly the third quarter developed, especially for the wholly-owned subsidiary from Southern Europe. For example, Siemens Gamesa posted an adjusted loss of EUR 2.55 billion, compared with a loss of EUR 382 million in the prior-year quarter. Although the traditional gas turbine and transmission business showed significant profit increases, this could not compensate for the difficulties. As a result, Siemens Energy Group as a whole reported an adjusted loss of about EUR 2 billion, compared with a minus of EUR 0.2 billion in the previous year. After considering a write-down on capitalized deferred taxes of about EUR 700 million, the net loss amounted to about EUR 2.9 billion, compared with EUR 0.6 billion in the previous year.

    After Siemens Energy had to revise its full-year forecasts at the end of June due to the weak business performance of Siemens Gamesa, the stock has since lost about 37% in value to EUR 14.75. For the full year, Siemens Energy expects a net loss of around EUR 4.5 billion. Analyst Akash Gupta of US bank JP Morgan highlighted that the power engineering group's past quarter had been good for its old gas and power businesses and that margins had been surprisingly strong but that losses in its wind business had counteracted everything. As a result, the expert expects negative revisions to consensus estimates. The price target of EUR 23 with the verdict "overweight" were maintained despite everything.

    Almonty Industries - Busy months

    The energy transition has triggered a wave of demand for critical raw materials such as lithium, tungsten, copper and rare earths, with demand outstripping existing supply. Geopolitical tensions between the West and China, where China has a quasi-monopoly on tungsten and rare earths, add to the complexity. Amid the crisis, Canada's Almonty Industries in South Korea is forging ahead to create a tungsten production facility that, at full capacity, could be responsible for about 30% of the world's ex-China supply.

    The Almonty Korea tungsten project has made significant progress in recent months, including completion of engineering and construction work on key components. Delivery of the necessary equipment from France, Brazil and Turkey is expected, while commissioning is expected to be completed by the end of 2024. Germany's state-owned KfW-IPEX Bank is supporting the project with USD 75 million in financing, of which USD 40.2 million has already been drawn.

    The Sangdong deposit has a potential life of 90 years and will expand in two phases, with annual production of 2.3 million tons to 4.8 million tons of tungsten oxide. The estimates show that the deposit has significant resources that could play an important role in global supply and push Almonty Industries' stock into higher valuation territory. Currently, the Canadian company has a market value of CAD 135.24 million at a share price of CAD 0.59.

    Nio - Strong growth

    The Chinese manufacturer of luxury electric vehicles attracted attention when it published its sales figures for July. The Company sold a total of 20,462 electric cars, an impressive increase of almost 104% compared to the same period last year and an increase of around 100% compared to the month of June, in which 10,707 units were sold. Nio thus outperformed competitor XPeng, which shipped 11,008 units but was behind Li Auto, which posted explosive month-on-month growth of 228% with 34,134 vehicles delivered.

    After a weak start to the year and Tesla's price-cutting strategy, Nio has gained mighty ground in recent months. For one, the market launch of the redesigned ES6 SUV model in May gave the Company a boost. Furthermore, in early June, a price reduction of around USD 4,200, equivalent to 10% of the base price for some models, may have boosted demand significantly.

    After a price performance of over 100% since the beginning of June to USD 15.14, Nio was able to complete its bottom formation. The next important hurdle is the high from October 2022 at USD 16.88.

    The numbers season promises high volatility for the companies concerned. Siemens Energy suffered further due to higher-than-expected losses at its Gamesa subsidiary. Nio was able to double its sales figures compared to the previous month. Almonty Industries reported further successes in the construction of the Sangdong mine.

    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.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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