December 27th, 2024 | 07:30 CET
Renk electric tanks with Rheinmetall? Buy Nordex shares? XXIX Metal profits!
Is electric mobility coming to the battlefield soon? This is likely to be only a matter of time. For example, Renk is already working on hybrid models that are expected to offer clear advantages in the field and could also be used to electrify Rheinmetall tanks in the future. In addition, the new transmissions pave the way for autonomous driving tanks. Electric vehicles are driving the demand for copper just as much as artificial intelligence and renewable energies. XXIX Metal is benefiting from this. The Company emerged from a merger this year and has become a leading player. The copper content of the projects, which already exists, is convincing. And what is Nordex doing? The wind turbine manufacturer has reported a new order. The stock has remained relatively stable throughout 2024. Analysts see upside potential, but there are also risks.
time to read: 4 minutes | Author: Fabian Lorenz
ISIN: NORDEX SE O.N. | DE000A0D6554 , XXIX Metal Corp. | CA9013201012 , RENK AG O.N. | DE000RENK730
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Author
Fabian Lorenz
For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.
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XXIX Metal: Strong copper projects in Canada
Experts predict a golden future for copper. According to Statista, the copper market is expected to grow from around USD 170 billion in 2022 to USD 260 billion by 2030. Numerous growth drivers exist: high-performance cables and cooling systems for data centres, motors for wind turbines and solar panels, and electric vehicles. The consolidation of the copper price in the second half of 2024 and the accompanying consolidation of stocks in the sector offer an exciting entry opportunity because one thing is clear: The world will need significantly more copper in the future.
New deposits in Canada are currently being developed by XXIX Metal, named after the atomic number 29 of the element copper. The Company was newly established this year through a merger and is focusing on two copper projects with a current copper equivalent of 4.8 billion pounds – and rising. One of these is the 13,000-hectare Opemiska project. This is an open-cast mining project with the highest copper content in Canada. The grade is even higher than Newmont's projects and three times the peer group average. And the second project, Thierry, is also in the top 5 with almost 0.40% copper.
In 2025, both projects are to be advanced to increase the resource. The Company is already well financed for this and does not need to rely on a capital increase. This means that shareholders can look forward to positive news flow in the coming year. It seems only a matter of time before the copper price rises again, and by then, at the latest, the XXIX Metal share – which is now also traded in Germany – should rise disproportionately.
Renk is working on a hybrid tank
It will likely take a few more years before we see a fully electric tank. Then, the required copper could also come from XXIX Metal. Renk has shown this year that the trend on the battlefield is also moving towards electric drives. The German defense supplier, together with a partner from the UK, has presented switchable electric motors for tanks. This is intended to further develop the Leopard 2 and provide it with concrete advantages in action.
Renk calls the new hybrid transmission ATREX. It enables slow driving purely electrically, with the combustion engine only kicking in later. ATREX enables new functions such as Silent Watch, Silent Manoeuvring and Sprint Boost, which increase the passive protection of combat vehicles and at the same time create tactical advantages. Thanks to the battery, the vehicle can be driven with reduced noise and heat during emergency trips independently of the diesel engine. If a critical situation arises, the boost function can be used to move the vehicle quickly out of the danger area with electrical energy, with the diesel engine starting up at the same time. The electromechanical steering system can also serve as a generator to recharge the battery. Thanks to the drive-by-wire technology, ATREX is also expected to pave the way for autonomous driving.
The new technology has not yet affected the current price development of Renk shares. However, it shows that the largest manufacturer of gearboxes for the defense industry is preparing for the future.
Nordex: New year brings uncertainty
The wind energy sector also relies on copper, which is driving the share price of XXIX Metal. Like most companies in the renewable energy sector, 2024 was not an easy year for Nordex. However, the Nordex share has held up relatively well with a gain of around 11%. It is currently trading at just under EUR 12.
The most recent order was from Greece. Energy producer Alterric has ordered nine turbines from Nordex for the 56 MW Chalkidiki wind farm. In addition, a service contract has been signed for the next 25 years. Full commissioning is scheduled for mid-2026. Patxi Landa, CSO of Nordex, commented: "The Chalkidiki project marks the first time that our most powerful turbine, the N175/6.X, for regions with low wind speeds will be used in Greece. The turbine is perfectly matched to the wind conditions at site. We are pleased to have received this first order from Alterric in Greece and look forward to working together to advance the energy transition here with our latest technology."
Analysts at Jefferies expect Nordex to be able to increase profitability in the coming year. They note that the supply chains are stable and the order backlog solid. As a result, they have issued a "Buy" recommendation for the Nordex share with a price target of EUR 18. The analysts at Barclays are more skeptical. The battle with Chinese competitors remains fierce, and the upcoming change of government in the US brings uncertainty in this important market. As a result, the analysts recently reduced their price target slightly from EUR 15.10 to EUR 14 and recommend the Nordex share as "Equal-Weight".
XXIX Metal has exciting projects and offers the potential for a sharply rising share price – because copper demand is driven by megatrends. Renk shares have underperformed compared to the peer group, although the Company does not appear to be as broadly positioned as Rheinmetall and Hensoldt. Nordex has come through 2024 relatively unscathed, but whether the share can take off in 2025 is doubtful, given the competition from China and the Trump administration in the US.
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