April 6th, 2021 | 10:22 CEST
Sierra Growth, BYD, Ballard Power - Copper versus hydrogen!
Table of contents:
"[...] If we pursue our goals conscientiously, the market will adjust its valuation accordingly, I am sure. Often, all it takes is a trigger. [...]" Ryan McDermott, CEO, Phoenix Copper
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Sierra Growth Corp. - A new star on the copper market
VW Group reported an increase in deliveries of purely battery-powered models for its leading brand in 2020 to nearly double the previous year's level. For e-cars overall - including those with plug-in hybrid powertrains - the increase was 158%. Globally, electric or alternative drive systems to internal combustion engines grew by around 120%. Thus, we can see the momentum behind this trend - and what is needed first and foremost is copper!
The global supply of copper is currently managed from about 10 large mines and 20 smaller ones. Considering this, it becomes clear that a medium-term supply of the coveted raw material can only be achieved through new developments. An e-vehicle requires 4 times the amount of copper used in a conventional vehicle, and around 70% of the world's copper is used in electronic applications. Global demand will be about 1.6 million metric tons (MT) in 2025, compared to a total of 0.6 million MT in 2020, resulting in a 160% increase in demand in 5 years - that is exponential!
Sierra Growth is a junior exploration Company engaged in the acquisition, exploration and development of early stage mineral prospects, currently operating projects in Nevada. The primary sectors the Company is focused on are silver, copper, gold and molybdenum. Currently, the focus is clearly on the 3 properties in Nevada, as the state has been consistently ranked in the top 5 by the Fraser Institute in its annual assessment of mining jurisdictions. The properties are held by experienced license holders who have a proven track record of exploration in Nevada. Excellent infrastructure is already historically in place in Nevada: Power, water, and utilities are available nearby in local mining towns.
Anyone looking for a small successor in the copper market and looking at the supply situation over the next 5 years recognizes the potential of current copper projects. Sierra Growth shares have recently been quoted in Frankfurt at around EUR 0.12; trading volumes are still low. Since the market capitalization is still a manageable EUR 6 million, a limited entry could soon pay off.
BYD - The "Blade" super battery
BYD has presented its business figures for 2020. Sales rose by 22.6% year-on-year to the equivalent of around EUR 20.3 billion. Profits climbed by about 162.3% to around EUR 550 million. BYD justifies the profit growth with an "improvement in overall operational efficiency" and new products. The automotive division contributed EUR 10.9 billion, about half of the Group's revenue.
However, as a look at production and current deliveries shows, the Chinese were able to make gains primarily in the combustion models. BYD produced a total of 431,954 vehicles, down 5% year-on-year. The decline was mainly due to lower sales of electric cars and plug-in hybrids by 12.5% to 162,893 units, while sales of combustion models increased by 3.8% to 231,715 vehicles. Worldwide, BYD is ahead with its electric buses, while passenger cars are currently available mainly in China and are still little known internationally.
Currently, the Group is focused on its expansion into Europe: after a test last year, more units of the Tang EV SUV will be sold in Norway. The Group intends to slowly abandon the existing NCM battery-based BEVs and roll out more "LFP blade battery" based vehicles from April, with a new BEV platform to be unveiled in 2021. BYD wants to stand up to Tesla and other manufacturers in this way because the blade battery is supposed to be more stably protected against external influences and minimize the risk of fire in the event of an accident. In tests, the battery was even shot with nails under maximum load; a conventional lithium battery would have reached temperatures of over 500 degrees under this stress. The "blade battery" only heated up to 30 to 60 degrees in the process.
After its high of EUR 29.5, the BYD share price corrected to EUR 17.2 and quickly turned upwards again. The EUR 15 line is likely to hold at this point, so take aim at the stock again.
Ballard Power - Big goals, weak share price performance
Ballard Power has always had ambitious goals. Since 1995, a large-scale growth strategy has been aimed at capturing as much of the fast-growing global market for fuel cells as possible. At the beginning of the millennium, the share was at EUR 140, then followed 19 years of tragedy with price losses of up to 99% from the high. It wasn't until 2017 that the share attracted attention again when the Company put the first commercially viable fuel cell into operation.
Today, no one doubts that fuel cell technology is a relevant future development. The latest milestone in kilometers driven is proof of this. The Company recently announced that PEM fuel cell technology has now powered vehicles with an industry-leading total mileage of more than 75 million kilometers. If we do the math accurately, we would have circled the globe about 1,870 times with that number. Approximately 80% of the miles traveled to date have been by fuel cell vehicles in China, with the remainder completed in Europe and North America.
Ballard has developed its share price upwards by more than 100% in the last 2 years. Therefore, CTO Dr. Kevin Colbow is also convinced that Ballard has industry-leading field experience in powering commercial vehicles. The target group for future development is therefore buses, trucks, trains and ships. We are curious to see whether the global commitment to zero-emission mobility will lead to the mass production of fuel cells or whether battery propulsion will ultimately win the race. The share price has almost halved in the last 3 months. We warned of the impending correction at an early stage.
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