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August 17th, 2023 | 07:20 CEST

Return on investment thanks to recycling: NEL, RegenX Tech, BASF

  • recycling
  • circulareconomy
  • renewableenergies
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Many people view recycling with skepticism and are reminded of regulations for waste separation, even though a significant portion of carefully sorted recyclables ultimately end up in incineration plants. On a large scale, however, recycling is a beacon of hope. For Germany, in particular, a functioning circular economy could bring many advantages - after all, energy requirements and dependence on foreign countries are high. Recycling is also about the future of the industry.

time to read: 3 minutes | Author: Nico Popp
ISIN: NEL ASA NK-_20 | NO0010081235 , REGENX TECH CORP | CA75903N1096 , BASF SE NA O.N. | DE000BASF111

Table of contents:

    BASF and Co.: Recycling is gaining in importance

    Germany has a large energy requirement thanks to its industry. Fossil fuels still play a major role for various reasons. If more products were reused, this could, on the one hand, save energy. In addition, recycling could significantly reduce industry's dependence on raw material imports. Industrial companies could also presumably reduce costs in a functioning circular economy. In order to establish such a circular economy, experts are calling for greater digitization. Information would have to be available across companies, and the linear supply chain would have to be broken up. If players from different sectors had access to data on available basic and raw materials, the circular economy could gain momentum.

    Recycling has always played a role in the chemical industry. As early as 2021, BASF acquired a company in the US that processes industrial catalysts and extracts platinum from them. This platinum can then be used to manufacture new catalysts that are urgently needed for chemical processes. Platinum is also built into some hydrogen production plants. For this reason, analysts such as those from Commerzbank and the World Platinum Investment Council (WPIC) also expect platinum demand to multiply in the coming years.

    RegenX Tech: Green platinum for the hydrogen economy

    The Canadian company RegenX Tech has developed a modular process to effectively recycle catalysts. With this approach, the Company follows a business model that prompted BASF to make an acquisition in North America two years ago. RegenX sees its process as having an advantage over the competition and promises recovery rates of more than 90%. According to the Company, only about 30% of the catalytic converters from diesel vehicles disposed of yearly are currently recycled. Regenx Tech sees great potential in this area.

    In addition, the market for catalytic converters is not shrinking, even despite the mobility revolution. Demand from the hydrogen industry is expected to increase significantly - companies such as NEL, but also many others, are currently expanding capacities and registering more and more incoming orders. RegenX Tech, therefore, also sees itself in the midst of a growth story. On a one-year horizon, the value has already increased by around 50%. One of the factors driving the share price in the first half of the year was the commissioning of RegenX's first recycling plant in Greeneville in the US state of Tennessee. Further plants are to follow.

    Climate-neutral raw materials are in demand internationally

    Financing this planned growth should be easier for RegenX Tech than for traditional mines - after all, sustainable business models offer tangible advantages in financing in many regions of the world. Platinum from RegenX's recycling plants is also likely to be in demand on the global market - every company is currently striving to make their supply chains as sustainable as possible. In order to identify RegenX's business model as sustainable, the Company could seek certification to this effect.

    If further progress is made in the coming quarters and RegenX can demonstrate to potential customers and investors how robust its business model is, the share should also offer additional opportunities. Numerous industrial companies and governments have recognized the opportunities of a circular economy and want to create conditions to help recycling achieve a breakthrough - the EU, in particular, has already made corresponding stipulations in recent years. Examples include the "Right to Repair" and the ban on the production of certain disposable tableware and cutlery.

    While top-tier hydrogen stocks, such as NEL, are already familiar to many investors, recycling stocks like Regenx Tech are not yet on the radar of many investors. However, the focus on platinum fits the times. RegenX Tech's stock has established a sideways movement in recent months. Even given the market capitalization of only around CAD 35 million, investors should have the stock on their radar. Recycling is likely to gain traction in the coming years, thanks in part to digital innovation.

    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

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

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