Rheinmetall, Antimony Resources, Xiaomi – Right on trend

Rheinmetall – Like clockwork

RENK, Hensoldt, and now Rheinmetall. What was unthinkable just a few years ago – adding shares of companies labeled "socially harmful" to your portfolio – is now reality. And despite already ambitious valuations, it seems unlikely that the boom in the defense sector will come to an end anytime soon. The changing times are driving prices, and politics is paving the way for further price increases.

Instead, the decisions taken at the recent NATO summit in The Hague are providing new impetus for the stock markets. The member states of the alliance agreed to invest at least 5% of their gross domestic product in defense and security every year from 2035.

This target is significantly higher than previous agreements and signals a long-term increase in military budgets. Corresponding announcements had already driven up the share prices of defense companies in the run-up to the summit. Investors see the decision as a clear strategic move that should secure stable and growing order volumes for industry.

The prospect of bulging order books is making the sector increasingly attractive to investors, particularly against the backdrop of geopolitical tensions and growing demands for alliance defense. Analysts remain euphoric about the new regulations. US bank JPMorgan has reiterated its "Overweight" rating and sees positive prospects for the industry for many years to come due to increased government spending.

Antimony Resources – Critical and scarce

Due to the uncertain geopolitical situation and the trade dispute between China and the rest of the world, the supply of critical raw materials could quickly come to an end. This would result in disrupted supply chains and exorbitant prices for scarce goods. There was an initial outcry a few weeks ago when Iran announced its intention to block the Strait of Hormuz, which would have had fatal consequences for global trade routes.

The situation for the semi-metal antimony is indeed critical, especially in the EU and the US. China produces around 80% of the world's antimony and thus clearly dominates the global market. It is used in batteries, flame retardants, alloys, electronics, and the defense industry. And China already used its weapons at the end of last year by imposing export restrictions. There is a massive shortage in Western countries, and alternative producers are being sought desperately.

Antimony Resources is committed to becoming a leading supplier of antimony outside China. The Canadian company is rapidly advancing the development of the Bald Hill antimony project in New Brunswick. In early June, the Company secured CAD 318,100 in fresh capital through a private placement, which will be used directly for ongoing exploration and resource expansion. At the same time, the project area was expanded by 650 hectares, covering additional promising zones based on historical exploration data.

The focus is on an ongoing 2,500-meter drill program, of which 1,600 meters have already been completed. The results confirm the project's high potential: visible antimony mineralization was discovered in 80% of the drill holes, including a promising 20-meter zone. Previous drilling had already returned grades of 20.9% over 2.29 meters and 11.7% over 4.5 meters. Surface samples also support expectations. They show continuous mineralization over a length of more than 300 meters with potential for expansion.

The goal is to present an initial resource estimate by the end of 2025 in order to position itself as an independent source of antimony for industrial customers. In addition, the Company has secured an option on a second project in the region, which is operating under the name "Antimony 2.0".

Antimony shares have risen significantly in recent days to CAD 0.16. Should the situation with China come to a head, the current market capitalization of CAD 6.04 million is likely to be pulverized.

Xiaomi – Big surprise

Chinese smartphone and electronics manufacturer Xiaomi is making waves in the automotive market with its new electric SUV, the YU7. Within just one hour, 289,000 reservations were received for the new model, almost three times as many as analysts had expected. This puts Xiaomi in an increasingly competitive position against established players such as Tesla in its most important market, China. The YU7 competes directly with the Model Y, the best-selling SUV in the country to date.

The first Xiaomi vehicle, the SU7, had already outsold Tesla's Model 3. Market observers now expect further market share losses and possible price adjustments at Tesla.

Financially, Xiaomi is on track for growth overall. In the first quarter, consolidated revenue rose by 47.4% to CNY 111.3 billion, while adjusted net profit increased by 64.5% to CNY 10.7 billion. Xiaomi is also expected to reach profitability in its automotive business this fiscal year. The division has so far posted a quarterly loss of around CNY 500 million on revenue of CNY 18.1 billion. This also exceeded analysts' forecasts.

The defense boom is likely to continue due to the changing times and the rearmament of countries. Xiaomi is taking aim at Tesla with its new model, while Antimony Resources stands to benefit from the shortage of the critical metal antimony.