Renk in the defense boom - Power Metallic Mines and BYD are also high flyers and uniquely positioned

Renk - On track in the defense boom

Emmerich Schiller takes over the COO role at Renk Group on March 1, 2025. The long-standing Mercedes manager, who has been on the management board for a year, continues to be responsible for production, supply chain, and human resources. His expertise is to support the growth strategy of the defense specialist, which is already celebrating tremendous stock market success under CEO Alexander Sagel. Schiller's appointment highlights the focus on operational excellence – crucial at a time when Renk is massively expanding production capacity to meet demand for tank transmissions and marine systems.

Renks' shares have recently risen by over 15%, driven by increasing defense budgets in Europe. Analysts see this as the start of a structural boom rather than a short-lived hype. NATO countries aim for military spending of at least 2% of gross domestic product, which will benefit technology leaders like Renk. In Q4 2024, revenues rose by 33%, and the EBIT margin climbed to 17%. With full order books until 2026 and a pipeline of EUR 12 billion until 2031, growth remains predictable. Hybrid-capable drives for tanks like the Leopard 2 are particularly in demand – with over 70 armies relying on Renk's technology.

Despite a P/E ratio of 28 (2025), experts such as Warburg Bank consider the share to be undervalued. The price target of EUR 36 implies 20% upside potential. Drivers are the high cash flow margin, economies of scale, and the strategic partnership with KNDS. In addition, Renk is diversifying skillfully: 35-40% of sales come from aftermarket business, while wind power and industrial solutions spread the risk. Renk remains a key player for investors betting on the "defense supercycle," even if the rocket has already ignited. The stock has gained a good 78% since the beginning of the year and has since consolidated slightly. Currently, a share is available for EUR 29.13.

Power Metallic Mines – New name, new ambitions

With the renaming of Power Nickel as Power Metallic Mines, the Company underscores the polymetallic character of its flagship Nisk project in Quebec. Thanks to stable politics, partnerships with First Nations, and tax credits of up to 50% of exploration costs, the region is considered a global mining hotspot. The Nisk project combines high-grade nickel, copper, precious metal deposits, and sustainability. Green electricity from Hydro-Québec and CO₂-neutral processing technologies are planned to make the project the first climate-neutral mine of its kind. A collaboration with CVMR will also increase profitability through innovative metal finishing technologies. The Company intends to use satellite-based exploration techniques, such as ambient noise tomography, to identify additional deposits at depths of up to 2 km.

The latest drilling results from the Lion Zone confirm the potential of the Nisk project. For example, hole PN-24-079 returned a 20-meter copper equivalent (CuEq) value of 4.29%, including a 10-meter zone grading of 6.26% CuEq. PN-24-095a also returned an encouraging 19.4 meters of 4.29% CuEq, including 5.35 meters of 10.6% CuEq. The drilling campaign is utilizing targeted electromagnetic surveying to locate sulphide conductors, a method that led to the discovery of the Lion East Zone. Three active drill rigs are planned to be available for exploration work through April to expedite a new resource estimate. VP Exploration Joe Campbell said, "Further targets are expected along the trend between the Nisk and Lion deposits, providing additional drill targets for our 2025 winter program."

Power Metallic Mines recently completed a private placement of CAD 50 million, including CAD 40 million through flow-through shares at CAD 2.83 each. The remaining 10 million were placed through common shares at CAD 1.45. Prominent investors such as Robert Friedland and Rob McEwen have participated. At the same time, the spin-out of the Golden Ivan property and some Chilean assets into Chilean Metals was finalized. Power Metallic remains focused on Nisk, aiming to establish one of North America's most valuable polymetallic sources. Due to the strong outlook, it was possible to place the flow-through shares well above the current market price of CAD 1.75, demonstrating the strength of the Company.

BYD – Broadening its base

The Chinese electric vehicle and battery manufacturer BYD is consistently working on the development of solid-state batteries to expand its technological advantage. The first pilot series is to be used in premium vehicles as early as 2027 before a widespread market launch can take place in 2030. The sulfide-based batteries promise a longer lifespan, greater safety, and faster charging. At the same time, the Company intends to retain its proven lithium-iron phosphate systems for at least the next 15 years in order to continue serving affordable models profitably. This dual strategy ensures stability in the volume market and growth opportunities in high-end segments.

In addition, BYD is making significant strides in the energy sector: A major order for energy storage from Saudi Arabia with a capacity of around 12.5 GWh should further enhance the Company's international reputation. BYD is addressing the growing demand for stable grid solutions by integrating its MC Cube-T energy storage systems with cell-to-system technology. The Saudi Arabian project offers significant revenue potential and solidifies the Company's position as a multinational storage solutions provider. This diversifies the Company away from the automotive sector.

At the same time, BYD is expanding its portfolio in the field of self-driving systems. With 'God's Eye' technology, the error rate in autonomous driving should decrease significantly and be installed in all models. At the same time, the Company aims to enter the Indian market with an investment of around USD 1 billion to create production capacity for new models. Observers see this as an opportunity to strengthen regional market leadership and offset the potential of established suppliers. These projects reflect BYD's strategic research, development, and global diversification mix. The stock has gained over 50% year-to-date and is currently trading at EUR 47.79.

Renk, Power Metallic Mines, and BYD stand out as key players in a world that prioritizes decarbonization and strategic resource security. Renk is benefiting from the global defense boom with high-precision solutions for armaments and industry. Power Metallic Mines is driving the commodities transition by sustainably mining critical metals in Québec. BYD is revolutionizing e-mobility and grid solutions with solid-state batteries and energy storage systems. The recent share price gains of all three companies reflect structural growth drivers – from geopolitical budgets to the green transformation.