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April 28th, 2023 | 08:30 CEST

Price-moving news at Nel ASA, Power Nickel and Varta

  • Mining
  • Nickel
  • Batteries
  • renewableenergies
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The first-quarter earnings season is currently at its peak. In addition to RWE, which doubled its quarterly profit, Deutsche Bank also reported further growth in profit. Surprisingly strong results were also reported from the second tier. As a result, there are interesting opportunities to enter the market, especially for stocks still lagging behind.

time to read: 4 minutes | Author: Stefan Feulner
ISIN: NEL ASA NK-_20 | NO0010081235 , Power Nickel Inc. | CA7393011092 , VARTA AG O.N. | DE000A0TGJ55

Table of contents:

    Jerre Foo, Corporate Development Executive, Silkroad Nickel
    "[...] China has become the manufacturing capital of the World, and because of its infrastructure, expertise and capabilities, Silkroad Nickel has strategically positioned itself to partner with Chinese companies in the Stainless Steel and EV industries [...]" Jerre Foo, Corporate Development Executive, Silkroad Nickel

    Full interview


    Nel ASA - Hydrogen innovator with a surprise

    Considering the critical chart constellation, the positive impulses came at the right time for the Norwegian hydrogen company Nel ASA. With a price jump of more than 13% to NOK 13.62, the share moved away from the low for the year and the critical support area at NOK 12 and was even able to break through the downward trend formed since February 2023 at NOK 12.98 with high volume. A setback is, therefore, not unlikely. Due to the substantial rise, the share tore a price gap that is likely to be closed sooner or later at NOK 12.54.

    The trigger for the positive swing was the publication of the figures for the first quarter. Here an increase in turnover of 68% to NOK 359 million was reported. The analysts' consensus was for revenues of NOK 323 million. The loss of NOK 121 was also above the experts' forecasts, who expected a loss of NOK 190 million. Another highlight was the increase in new orders by more than 100% to NOK 580 million.

    Following the announcement of the figures, the Canadian bank RBC reiterated its price target of NOK 22 and continues to see Nel ASA as an outperformer. US investment bank Goldman Sachs is also positive, maintaining its NOK 20.60 price target and "buy" rating.

    Power Nickel - Strong developments

    Bullish signs from both a fundamental and chart perspective come from emerging nickel explorer Power Nickel. The Canadians, who should benefit disproportionately from the transformation of the transportation sector in the coming years, have an option agreement to acquire up to 80% of the NISK project, a 20 km strike property that has already proven high-grade mineralization of nickel, as well as copper, cobalt, palladium and platinum. The goal of the experienced management is to develop NISK, which is located not far from James Bay in the province of Quebec and is equipped with first-class infrastructure, into the world's first carbon-neutral nickel mine. Power Nickel has already received certification from Verra, the world's most widespread greenhouse gas crediting programme. Further work, such as using green hydropower to supply the mine with energy or verifying the CO2 footprint, is to be started as soon as possible to finally be able to start trading with emission certificates.

    Fresh over the ticker were final drill results from the 2022 autumn drill programme and the initial drill results from the 2023 winter drilling. The Company confirmed further occurrences of high-grade Ni-Cu-Co-PGE mineralization in the main NISK zone. In addition, a further Ni-Cu-Co-PGE zone within the same rock sequence was identified approximately 800 m east of the Main Zone. With the surprise high-grade drill holes 23 and 24, the Company can now expand the mineralization in the down-dip angle above previous high-grade mineralized holes. These extend into an area where only low-grade mineralization was expected until recently.

    CEO Terry Lynch, who will be presenting Power Nickel at the 7th IIF - International Investment Forum, was enthusiastic about the results: "We are very pleased with the continued success of our exploration drilling at NISK. The samples from hole PN-23-023 have been excellent, and we are confident that our exploration to both the east and west away from the Main Zone has allowed us to gather some valuable clues as to where our next 'pod' is similar to the Main Zone at NISK may be located."

    With the closing of the second tranche of the CAD 5 million private placement, announced on 13 March 2023, the Company now has gross proceeds of CAD 2.585 million, which will be required for further exploration activities. This year the resource is to be evaluated in accordance with NI 43-101. The Company is also planning to start a 15,000 m Phase 4 drilling programme and to submit a preliminary economic assessment (PEA).

    In addition to the main project, Power Nickel has additional imagination through the spin-off of non-core assets into a separate company. Consolidation Gold and Copper's portfolio is expected to include the 100% interest in the Golden Ivan project in British Columbia's Golden Triangle, several concession rights in Chile and the Copaquire Royalty. The spin-off is expected to take place in the third quarter, with each shareholder receiving additional shares in the new company.

    Power Nickel's share price consolidated after reaching a new high for the year at CAD 0.35 and successfully defended the prominent support area at CAD 0.21 after a setback. Currently, the share price is CAD 0.25. If the resistance at CAD 0.27 is overcome, a new buy signal will be generated, retesting the previous high for the year.

    Varta - On the verge of a rebound?

    Battery manufacturer Varta's preliminary full-year figures for 2022 were less impressive, with a total loss of more than EUR 200 million, which the Company said was due to a write-down on property, plant and equipment in its lithium-ion button cell division. In terms of EBITDA adjusted for special effects, however, Varta exceeded the forecasts that had already been lowered in November with a result of EUR 69.5 million. Sales amounted to just under EUR 807 million, compared to EUR 903 million the previous year.

    The year 2023 is now dominated by cost-cutting measures and restructuring. Varta has already reached an agreement with the banks and larger shareholders on a restructuring of the group. Unfortunately, the measures include that around 800 employees will now have to look for a new challenge. In total, the Varta Group employs approximately 4,700 people worldwide.

    Despite the weak news and several negative analyst opinions, the price of the Varta share remained stable and was able to hold the important support at EUR 22.70. A breach of the EUR 25.61 mark would offer a short-term trading target up to the closing price gap at EUR 28.48.

    Positive news came from the recently battered hydrogen specialist Nel ASA. The price of the Varta share was robust despite the disappointing figures and could start a countermovement in the short term. Power Nickel shone with the publication of excellent drilling results.

    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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