November 12th, 2021 | 11:19 CET
Siemens, BIGG Digital Assets, K+S - The profiteers of inflation
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Profiteer from the second row
After the much stronger-than-expected figures, precious metals such as gold and silver and cryptocurrencies in particular rallied. Bitcoin, which is capped at 21 million units, is considered the "virtual gold" and is seen by investors as a hedge against inflation. In addition to investing directly in cryptocurrencies, there are already established companies in the industry that can benefit twofold from the bullish market.
BIGG Digital Assets, one of the leading Canadian service providers in the crypto market, has two promising irons in the fire. In fact, with its Netcoins trading platform, BIGG is the only publicly traded Canadian company to offer access to a regulated trading venue for digital currencies based on blockchain technology. Management plans to capitalize on this advantage over unregulated competitors by adding new currencies, launching Netcoins Pay and other new products, expanding into the US and extending advertising campaigns to new channels.
In addition to Netcoins, BIGG Digital Assets focuses on suspicious money transactions with its Blockchain Intelligence Group using its proprietary QLUE software, which is tracked and traced. With greater forensic depth, it investigates where the funds in question come from, where they are transferred to, and the profiles of the bodies involved. Customers of the software include government agencies, banks and exchanges. Recently, Syscoin, a development of Blockchain Foundry and a third-generation blockchain, was fully integrated into the platform's ecosystem. It makes
Blockchain Intelligence Group the first blockchain analytics service to apply this new system. Syscoin is a trusted computing platform that combines both the Ethereum and Bitcoin protocols into an ideal system that will power tomorrow's innovative distributed applications.
This announcement solidifies Blockchain Intelligence Group's position as a global leader in blockchain technology search, risk assessment, and data analytics solutions. It underscores blockchain's market growth, which included a partnership with XinFin's XDC Network and Blockchain Foundry, Inc. in the second quarter of 2021.
In addition to the two promising assets, BIGG Digital Assets holds 450 bitcoins. Its market capitalization at the moment is EUR 325 million. Unlike cryptocurrencies, the Canadians are still far from the all-time high after a stronger correction and thus have catch-up potential.
Due to the strengthening economy, sales and profits also grew significantly. Even the problem with the supply of electrical components and raw materials due to broken supply chains did not affect the Munich-based Company in the past fiscal year 2020/2021. Sales increased by 11.5% YOY to EUR 62.3 billion, while orders received grew by 21%. With an increase of a strong 59%, net profit exploded to EUR 6.7 billion. Because of the excellent results, the payout to shareholders is also to be increased from the previous EUR 3.50 per share to EUR 4.00 per share.
For the year 2021/2022, meanwhile, Siemens is putting the brakes on euphoria somewhat. Particularly in the past fourth quarter, the first effects of the replenishment problem became apparent. The Munich-based company hopes that corona effects and supply bottlenecks will ease over the next few months. Nevertheless, the Group only expects sales to grow by a mid-single-digit percentage on a like-for-like basis.
Kepler Chevreux continues to rate the Munich-based Company as a "buy" and reiterated their price target of EUR 170. The results in the core business had met expectations, which also applies to a large extent to the outlook. However, the earnings forecast leaves room for improvement for the consensus.
Strong figures, weak share prices
In October, MDAX member K+S raised its forecasts, which have now been confirmed with the final figures for the third quarter. Revenues grew by more than 30% YOY to EUR 746 million, while EBITDA grew by 50% to EUR 121 million. Operating profit is expected to increase to EUR 630 million in the current fiscal year.
Despite the excellent figures, the fertilizer producer's share suffered heavy losses following the publication. At its peak, K+S lost more than 10%; in trading, the losses were at least halved. Investors' uncertainty is because of an investigation of the balance sheets by the financial regulator BaFin. Among other things, the balance sheet police had criticized that the Company had not adequately determined the value of its Potash and Magnesium Products unit. K+S considers this to be unfounded. However, the investigation has not yet concluded.
Consumer prices continue to rise, reaching highs seen in the early 1990s. Due to inflation and the defensive stance of central banks concerning interest rate increases, tangible assets such as precious metals, shares and cryptocurrencies are benefiting. In the field of cryptocurrency, the share of BIGG Digital Assets is promising.
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