November 8th, 2023 | 07:45 CET
Should you buy shares now? Plug Power, JinkoSolar, Almonty Industries
Table of contents:
"[...] While tungsten has always played an important role in the chip industry, it is now being added to batteries for e-cars. [...]" Lewis Black, CEO, Almonty Industries
Almonty Industries: Position now for profits in 2024
Are Almonty shares worth almost 200%? The analysts at Germany's Sphene Capital say "yes". And there is good reason for optimism. After all, the Canadian tungsten producer with mines in Spain, Portugal and South Korea is on the verge of a massive jump in sales and profits. Revenue is set to more than double to CAD 60.9 million in 2024 and then exceed the CAD 100 million mark in 2025 - and the trend is set to continue. However, profits look more dynamic. In 2025, earnings after tax are expected to reach CAD 24.5 million or CAD 0.11 per share. This currently puts the 2025 P/E ratio at 5.
But where will this massive jump in turnover and profit come from? For one thing, the Los Santos mine in Spain was serviced in 2023 and only recently put back into operation. In the future, Sphene analysts expect the mine to generate annual sales of over CAD 20 million. To put this into perspective, analysts expect consolidated revenue of around CAD 29 million for the current year. And then, of course, there is Almonty's new flagship mine: Sangdong in South Korea. After years of investment, it is scheduled to start operations in 2024. As production increases, Sangdong is set to become one of the world's largest tungsten mines. And tungsten is in demand worldwide. It is not only needed for the production of batteries. The raw material is also in high demand in the telecommunications, medical technology and aviation sectors - especially if it does not come from China or Russia. Almonty, therefore, has little to worry about in terms of sales.
Plug Power: Tomorrow will be exciting
Plug Power shareholders are currently worried. The hydrogen pioneer's share price has fallen by around a third from its annual high of EUR 17 in February. It is now trading below EUR 6 and thus as low as in 2020. In February 2021, the share price reached almost EUR 60. Since then, it has been volatile, with a downward trend. Tomorrow, Plug Power publishes quarterly figures. And the example of industry peer Nel shows that quarterly results can push stock prices further down. The Norwegians were punished after their quarterly figures. The problems of both companies are very similar: although turnover is increasing, they are still a long way from reaching break-even. Although Plug Power almost doubled its turnover in the second quarter, it also posted a loss per share of USD 0.35.
Especially in times of rising interest rates, investors are becoming increasingly nervous when companies fail to get their losses under control. Plug Power will likely not be able to avoid a capital increase in order to break even in a few years' time. Tomorrow, shareholders should, therefore, pay attention to the loss development and the Company's liquidity.
JinkoSolar: Bucking the industry trend with strong quarterly figures
There have also been weak quarterly figures from the solar industry in recent weeks. SolarEdge and Enphase, among others, have been massively disappointing. This affected not only the shares of the German company SMA Solar but also JinkoSolar. However, thanks to convincing quarterly figures, the shares of the Chinese solar group were at least able to recover from their low for the year. Within a few days, the share price rose from EUR 24.60 to EUR 31.50.
In the third quarter, JinkoSolar increased sales by 63.1% to USD 4.4 billion. Solar modules with a total output of 22,597 MW were delivered. This corresponds to an increase of over 100% compared to the third quarter of 2022. The Company's net profit rose significantly by 140.7% to USD 181.4 million.
The outlook was also positive. Jinko plans to deliver modules with an output of around 23 GW in the fourth quarter of 2023. This is expected to exceed the delivery target of 70 to 75 GW for 2023 as a whole.
Investors in the renewable energy sector currently need strong nerves. However, there are also exciting buying opportunities, such as in the case of the Almonty share. If the estimates from Sphene Capital are met, the stock is significantly undervalued. This cannot be said of the Plug Power share, even after the fall in the share price. The US company needs to get its costs under control. JinkoSolar is being held back by bad news from industry and the "China factor".
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.
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