Rheinmetall, First Hydrogen, BYD – Innovations put pressure on the competition

Rheinmetall – Trend intact

The defense industry's order books are fuller than they have been in decades. According to the latest annual report from the Stockholm International Peace Research Institute, global military spending reached a record level of over USD 2.4 trillion in 2024. NATO also reports that more than two-thirds of its member states now meet or exceed the two percent target. According to its draft budget for 2026, Germany is planning defense spending of well over EUR 70 billion, and the trend is rising. Major programs for ammunition, air defense, and armored vehicles ensure long-term visibility for industry. The trend is likely to continue in view of geopolitical tensions and structural rearmament in Europe.

Against this backdrop, Rheinmetall has announced its next major order. The Group is supplying turrets, main armament, and simulators for the "Luchs 2" reconnaissance vehicle. The client is General Dynamics European Land Systems, the main contractor for the German Armed Forces. A total of 274 CT-025 turrets are to be delivered by 2031, the first major order for the newly developed modular, unmanned turret system. The order value is in the mid three-digit million range.

The group is targeting order intake of around EUR 80 billion for 2026. The order backlog could rise to around EUR 135 billion by the end of 2026, ensuring secure production for years to come.

Despite the excellent outlook, Rheinmetall shares are showing the first signs of a correction. A slide below the EUR 1,410 mark would trigger a stronger sell signal. The 200 EMA, currently at EUR 886, would not be an unlikely target.

First Hydrogen – Poised for growth

The AI revolution consumes endless amounts of electricity. Currently, gas turbines are the main source of power, but low-carbon, clean nuclear energy is becoming increasingly popular, especially in the US.

First Hydrogen is at the forefront of this development, transforming itself from a pure mobility provider to an integrated clean energy player. In addition to hydrogen-powered light commercial fuel cell vehicles, which have already been successfully tested by fleet operators in the UK, the company is working on a zero-emission ecosystem. At the heart of this is a research program with the University of Alberta in the field of small modular reactors (SMRs).

The focus is on molten salt reactors. In an early phase, First Hydrogen is deliberately investigating non-radioactive substitutes in order to realistically replicate physical properties and reduce development risks. The aim is to identify alternative fuel mixtures that come close to uranium-containing fuel salts in terms of efficiency and safety.
If this approach succeeds, it would be a technological breakthrough and another milestone for the company, which is valued at around CAD 20 million.

Strategically, the plan is to combine base-load-capable, clean energy from SMRs with electrolysis. The electricity generated could be converted into green hydrogen and distributed via existing gas networks. Data centers, AI infrastructure, and industry are considered key consumers here.

With prices around CAD 0.38, First Hydrogen offers a speculative option on the next growth spurt. An announced private placement of up to CAD 3 million is intended to finance the next development steps. Further progress in the SMR program could quickly lead to a revaluation here.

BYD – Revolution in battery cell technology

China's e-mobility champions are rapidly extending their lead. According to the latest battery analysis by UBS, electric vehicles are achieving "triple parity" for the first time - cost, range, and charging time are now on par with internal combustion engine vehicles. BYD and CATL are the primary drivers behind this development.

According to UBS, the Shenxing battery developed by CATL has a total cost of around USD 55 per kilowatt hour and is almost 50% cheaper than comparable cells from Western manufacturers. LFP batteries produced in China by BYD and CATL therefore offer a cost advantage of around 35% over international competitors, corresponding to savings of around USD 2,000 per vehicle.

The trend is likely to continue. UBS expects Chinese OEMs to increase their global market share from 25% in 2025 to 35% by 2030. Growth is expected to be generated primarily outside China. Although planned foreign factories to circumvent trade barriers increase cell costs by 20 to 25%, the technological and economies of scale advantage remains. This could delay Europe's cost parity by three to four years.

In the OEM sector, UBS sees BYD as best positioned to profitably expand its market share. CATL, on the other hand, as the world's leading cell manufacturer, is benefiting not only from the automotive sector but also from growing demand in truck, storage, and industrial applications.

From a technical perspective, BYD shares were able to bottom out after a sharp sell-off of around 45%. A breakout above the horizontal resistance level at around HKD 13 would generate a buy signal.

Rheinmetall remains structurally on an upward trend thanks to full order books, even if chart-based risks are increasing. First Hydrogen is a speculative bet on the future of SMR and green hydrogen. BYD impresses with its technological edge and global expansion potential.