October 24th, 2022 | 10:45 CEST
Rock Tech Lithium, TubeSolar, JinkoSolar - Breakthroughs in green innovation
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Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Rock Tech Lithium - It is done
Electric cars are an essential component of the energy transition. Lithium is the elementary component of all standard battery cells. The cleantech company Rock Tech Lithium owns an area of around 30 sq km in the southwest of the province of Ontario for mining the lithium ore spodumene, from which high-quality lithium hydroxide can be extracted through a complicated chemical process.
At the end of August, an agreement between the Stuttgart-based carmaker and Rock Tech Lithium was hinted at during the German-Canadian Summit, now followed by the conclusion of a binding offtake agreement with Mercedes-Benz AG for the supply of an average of 10,000t of lithium hydroxide per year. Over the contract period of 5 years and a qualification phase starting beforehand, the contract covers an estimated sales volume of around EUR 1.5 billion. It is expected to utilize around 40% of the converter's capacity planned in Guben, Brandenburg. The annual supply volume of lithium hydroxide is expected to be sufficient to supply around 150,000 Mercedes-Benz electric vehicles with high-performance batteries.
"The signing of the supply contract is a significant milestone in our offtake strategy, and I am very pleased that Mercedes-Benz is thus showing confidence in Rock Tech as a new but reliable player in a diversified European battery supply chain," said Markus Brügmann, Chief Executive Officer of Rock Tech at the contract signing ceremony in Sindelfingen.
The announcement of the long-term purchase agreement with the global player should certainly facilitate the financing talks currently underway concerning the construction of the converter. Analysts at Montega AG were also positive after the triumphant announcement. The experts continue to see the German-Canadian cleantech company as a buy candidate and assign a price target of CAD 10.00, which is around 200% above the current price level.
TubeSolar - Milestone and fresh money
Years ago, the either-or principle applied to open spaces, meaning agricultural use or energy generation via solar modules. With the advent of agri-photovoltaics, the simultaneous use of agricultural land for food production and PV power generation killed two birds with one stone. However, this efficient and profitable type of double cropping is difficult to implement with surface collectors. In contrast, the patented tube modules from Augsburg-based TubeSolar offer significant advantages over classic flat modules. They are light and water permeable for optimal plant growth and lighter than comparable technologies and are particularly suitable for elevation at a height of 7 m above the respective field. In addition to protection against excessive solar radiation, the tubular modules also minimize damage from hail and heavy rain. Another decisive plus point is the efficiency, which is significantly higher with the tubular modules.
The Company, which was formed from a spin-off of the former Osram/Ledvance, was able to celebrate a milestone after a long wait. Thus, TÜV Rheinland bindingly announced that the TubeSolar PV modules have successfully passed the certification process and that the requested certification will be granted. That now clears the way for series production, which is scheduled to start this year. Over the next few years, the goal is to expand to 8 production lines with an annual production capacity of 250 MW, equivalent to utilizing around 250 hectares of farmland. However, according to CEO Felix Mantke, demand from interested parties already exceeds the planned capacity.
Several capital measures are currently underway for expanding capacity and the planned series production. The basis is a cash capital increase at a ratio of 6 to 1 with a subscription price of EUR 4.25, which will increase the number of shares by almost 15% to 14,782,352. That means a cash inflow of EUR 8 million. The fact that the total amount is already in the bag is another asset of TubeSolar because the successful series founder and major shareholder Bernd Förtsch secured the complete inflow of funds with a guarantee.
In addition, the anchor shareholders BF Holding GmbH, TSG 1. Vermögensverwaltungs GmbH, BD-Vermögensverwaltungs GmbH and Solar Invest International SE will contribute existing loan claims against TubeSolar AG as a contribution in kind in the amount of more than EUR 13.6 million to the Company. In return, TubeSolar will issue more than 3.2 million new shares to the companies at EUR 4.25 each. As a third component, the Augsburg-based company announced a conditional capital increase through the issue of a convertible bond with a volume of EUR 8 million. The conversion price is expected to be EUR 5.50, with an interest rate of 2% per year and a maturity of 4 years.
Agri-PV technology has developed dynamically in recent years and has spread to almost all regions of the world. In this context, the patent-protected tube technology offers significant advantages over the competition. The market capitalization is currently EUR 66.58 million. If the highly automated production line is set up successfully, market interest in TubeSolar AG will likely increase again. The strategic investment in the US company Ascent Solar Technologies Inc. should be mentioned, in which the Bavarians own 15.6%. That alone represents an equivalent value of USD 23.56 million.
JinkoSolar - Bullish analysts, chart-technically battered
Analyst opinions on the leading solar module and solar cell producer JinkoSolar are also positive. The investment bank HSBC gave the Chinese company a "buy" rating with a price target of USD 76.00.
Compared to the current price of USD 45.12, this represents an upside potential of around 67%. From a chart perspective, JinkoSolar shares should be treated with caution in the short term. With a break of the upward trend formed since the Corona low in March 2020, further pressure will likely come on the price, which could offer the vertical support zone at USD 38.15 as the next stop.
A large order for the delivery of solar modules to Dubai was recently concluded. It involved the delivery of solar technology for Phase B of the 900 MW AC DEWA Phase V project in the Mohammed bin Rashid Al Maktoum Solar Park. Operation of the solar power plant is scheduled to start before the end of October, and the customer, Dubai Electricity and Water Authority, has already been identified.
The share of renewable energy in the overall energy mix is expected to increase to over 30% by the end of the decade. However, this vision poses serious problems for the economy. In addition to the shortage of raw materials, there is a lack of open space for photovoltaics in Germany. While Rock Tech Lithium wants to supply the automotive industry with lithium hydroxide, TubeSolar is working on a breakthrough in the agri-PV sector.
Conflict of interest
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