January 25th, 2021 | 08:00 CET
Samsung, Xiaomi, Silver Viper: Business is booming here
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"[...] Internally we expect the resource to significantly grow the deeper we mine. [...]" Dennis Karp, Executive Chairman, Manuka Resources
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.
Batteries and payment: Samsung has a finger in every pie
If you want to profit from the boom in consumer electronics, you simply buy the big manufacturers' shares - at least that's the assumption. The South Korean giant Samsung offers everything that we Germans enjoy in lockdown: TVs, smartphones, and all sorts of other technical bells and whistles, such as smartwatches. The South Koreans are also well positioned in memory chips and processors and are also known for their LCD technology. Even if electronics do not carry the Samsung brand name, the chances are good that some Samsung products are installed "under the hood."
Thanks to the excellent market power around smartphones and smartwatches, Samsung could also get involved in contactless payment besides purely consumer electronics. Google Pay already works without problems on Samsung's smartphones. Samsung has chosen battery production as another growth area. The Company already supplies batteries for Audi and could soon equip other German premium brands. Samsung is a jack-of-all-trades and the share price has rightly risen by more than 60% in the past twelve months. Many growth areas, including areas around electromobility, justify this increase.
Xiaomi: The challenger without an ESG profile
When it comes to smartphones, those who do not want to reach for the first best brand may buy a Chinese model like Xiaomi. An insider tip years ago, Xiaomi has become one of the largest smartphone manufacturers in the world. The Chinese concept is simple: They deliver reliable quality at a low price and score with innovation in flagship models.
Xiaomi's smartphones are - typical for Asian models - always a bit bigger. That makes the phones a bit unwieldy but offers large screens and even larger batteries. When it comes to battery life, no one can beat Xiaomi's models in a hurry. Besides smartphones, Xiaomi has all kinds of other products in its portfolio and sells fashion accessories, Bluetooth speakers, smartwatches and smart home accessories.
The share has put in a performance of around 110% over a period of twelve months. However, the value has been weakening a bit for a few days and is in consolidation mode. The P/E ratio for 2021 is currently 37. If the Company stays on the growth path with the upcoming quarterly figures, this will justify a continuation of the success story. The hunger for consumer electronics should remain even after the pandemic. Xiaomi has established a solid market position. Only in the area of sustainability do the Chinese have no unique selling points.
Silver Viper: In search of the precious metal
At first glance, Silver Viper has little in common with Samsung or Xiaomi. The silver Company from Canada is in search of the precious metal in Sonora, Mexico. The La Virginia property is still in the early stages of development. Silver Viper's goal is clear - to further define and develop silver deposits already found and bring the project into production in the long term with the help of partners, or sell it directly to a major producer. The region around the project seems to be predestined for such a project: Companies like Fresnillo, First Majestic and Silvercrest Mines are mining in the area due to the low costs and could be interested in La Virginia in the future.
However, the euphoria that drove the Silver Viper share to CAD 0.75 in the summer of 2020 has subsided, with the share now trading below CAD 0.40. The Company intends to continue exploration in 2021 and, at the end of September 2020, had funds of CAD 4.2 million. Given the dulling share price and the still filled cash register, it can be assumed that no further capital measures are pending in the short term.
For investors, the current market phase could be an excellent opportunity to look at Silver Viper. Unlike gold, for example, silver is also used as a kind of industrial metal in many areas. Examples include medical technology, consumer electronics, and many areas of renewable energy. In the end, Silver Viper has more in common with companies like Samsung or Xiaomi than one might think.
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