Renk, Manuka Resources, and Airbus with explosive news

Renk: An explosive start

The second shot was on target! After delaying its planned IPO in the fall, the Augsburg-based company, which produces gearboxes for tanks and frigates, successfully made its debut on the Frankfurt Stock Exchange with flying colours last week. The supplier to the defense industry was valued at around EUR 1.9 billion at an issue price of EUR 15. The current environment, marked by increasing tensions in global politics and escalating conflicts, caused the Renk Group's share price to rise temporarily to EUR 28.74 before profits were secured in the last two trading days. The weekly closing price of EUR 25.36 nevertheless represented a performance of around 69%.

The business areas of the Renk Group, which is a global leader in the manufacture of mission-critical drive technologies in various civilian and military end markets, extend far beyond the defense industry.

The Swabian company supplies more than 70 armies worldwide in the field of vehicle mobility solutions, including the security and defense market, with products such as transmissions for tracked vehicles, tanks, engines, suspensions, test systems and so-called powerpacks. Renk also supplies transmissions, clutches, brakes and drive systems to the civil shipping, marine and industrial sectors. Another important segment is plain bearings for electric motors, conveyor belts, pumps, blowers, water turbines and generators. Renk is a global leader in providing standardized electric bearings for electric machines and hydrodynamically lubricated standard plain bearings.

Manuka Resources receives tailwind

Manuka Resources could also rise to become a billion-dollar company in the future. Of course, there is a long way to go; Australia's youngest gold producer weighs just EUR 27.32 million on the stock exchange. However, with the takeover of Trans-Tasman Resources Limited, the owner of the South Taranaki Bight project, an offshore titanium and vanadium deposit, Manuka Resources could become one of the major global battery storage suppliers. The deposit, located off the coast of New Zealand, has the potential to become the third-largest global producer with an annual production of 10,000 tons of vanadium. In comparison, 40,000 tons of vanadium are currently mined in China and 10,000 tons in Russia.

The property is estimated to hold a total of around 3.2 billion tons. The net present value discounted at 10% (NPV10) is USD 1.8 billion, thus exceeding the current valuation many times over.

Manuka Resources received a significant boost from a change of government in New Zealand. The project is anchored in the government's coalition agreements, which were announced on November 24, 2023. The fact that the new leadership will support Manuka Resources' work is not without self-interest. At full production, the island state is expected to receive annual license fees of USD 43 million, an additional USD 110 million in corporate taxes per year, and around USD 600 million in foreign exchange earnings per year.

The Manuka Resources share doubled to AUD 0.10 following the New Zealand government's announcement and is currently trending sideways at AUD 0.07. Given that further positive signals are expected, the share could soon reach a new high for the year.

Airbus - Profiteer of the Boeing crisis

US aircraft manufacturer Boeing has been experiencing increasing quality issues in recent weeks. Particularly concerning is the safety of the 737, which has become a source of growing concern following the end of the grounding. Problems range from loose screws in the rudder control system to incorrect drill holes and issues with the fuselages.

European competitor Airbus, in which both the French and German governments hold a stake of more than 10%, benefited from this. Due to record orders and significantly higher deliveries, the aircraft manufacturer has now announced the payment of a special dividend.

The only small downer was a further burden on the crisis-ridden aerospace division. In the past financial year, the world's largest commercial aircraft manufacturer reported an increase in its adjusted operating profit by 4% to EUR 5.8 billion, while sales climbed by 11% to EUR 65.4 billion. For 2024, Airbus expects a profit of between EUR 6.5 and 7.0 billion. Airbus recommends distributing a dividend of EUR 1.8 per share, along with a special dividend of EUR 1 per share, following the surpassing of the EUR 10 billion threshold in net liquidity.

Airbus expects to deliver around 800 aircraft in the current year. However, a further delay in the delivery of the A321XLR single-aisle jet has been announced, which will now be postponed from the second to the third quarter. However, final assembly of the first customer aircraft already began in December.

Following the figures, the share price corrected to EUR 146.26 after reaching a new all-time high of EUR 152.82 in the run-up to the announcement. The Canadian bank RBC reiterated its price target of EUR 145 with an investment rating of "Sector Perform".

The supplier Renk celebrated a brilliant stock market debut. Airbus benefited from safety problems at its US competitor Boeing and announced a special dividend due to the high order intake. Manuka Resources has enormous potential and should benefit from further steps by New Zealand's pro-mining government.