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January 10th, 2022 | 11:56 CET

Steinhoff, Almonty Industries, MorphoSys - Closer and closer to the goal

  • tungsten
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Will the crisis-ridden international retail group Steinhoff have a happy ending after all? Now that the settlement is likely to be successfully put to bed at the end of January, the highly indebted company's survival is at stake, and it is now striving to gold-plate its well-performing subsidiaries. At Almonty Industries, on the other hand, the signs are pointing to growth. The mega project in South Korea will make the Company one of the most important players in the production of raw materials for the energy transition, with significant upside potential.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: STEINHOFF INT.HLDG.EO-_50 | NL0011375019 , ALMONTY INDUSTRIES INC. | CA0203981034 , MORPHOSYS AG O.N. | DE0006632003

Table of contents:

    Steinhoff seeks cash

    Now that Steinhoff has reached an agreement with the former Tekkie Town owners and Trevo Capital, the Western Cape High Court on Jan. 24 should also have enough arguments to approve the main settlement. The first hurdles have thus been cleared, and the German-South African group can now concentrate on reducing its horrendous debt burden of around EUR 10 billion.

    The Company still has several assets that could at least partially reduce this burden. After the Polish subsidiary Pepco was sent to the Warsaw trading floor last year, Mattress Firm could now be the next asset to be lifted. Steinhoff's stake is just under 50%, and now the initial registration form S-1 has been filed with the SEC. The US financial regulator requires this form if securities of the companies are to be listed on a national stock exchange. Mattress Firm had revenues of EUR 1.69 billion for the half-year.

    The claims for damages should be a thing of the past, but the high debt and extreme interest burden remain. A possible IPO should only mitigate this somewhat. Thus, Steinhoff remains a risky game of fire.

    Almonty Industries - Target within reach

    There is good news for all those who have had the Almonty Industries share on their watch list. Although the construction of the Sangdong mine at the Almonty Korea Tungsten deposit is progressing rapidly, the share price is barely moving, offering the opportunity to participate in the success of one of the world's largest tungsten projects.

    Around 50% of the world's tungsten supply outside China will be produced by Almonty's 100% subsidiary, Woulfe Mining. The stock market value is currently at EUR 125.36 million. The share price is quoted in Frankfurt at EUR 0.67, around 25% below its high of last year.

    The general starting conditions are outstanding because the demand for tungsten is higher than ever. The rare metal is needed in energy and lighting technology to aerospace, telecommunications, and medical technology. The downside, around 80% comes from China here as well. The potential of the Sangdong mine after full utilization is 1.2 million tons of rock, while at the beginning, only about half will be exploited.

    In addition to tungsten mining, the deposit offers additional potential through a larger molybdenum deposit, which is to be explored in more detail this year. In addition, Almonty Industries has excellent potential with two further projects in Spain and Portugal. The fact is, the closer the Company gets to production, the hotter the tungsten wire glows.

    Investors dump MorphoSys

    The suffering of MorphoSys shareholders continues. Although the Company from Planegg near Munich aims for further growth with the important cancer drug Monjuvi in the US in the current year, the stock has fallen in price and is trading at EUR 30.53, its cheapest level since 2013. At the same time, the prominent support at EUR 32.90 was recently breached with high volume, which does not bode well for the chart situation.

    With Monjuvi, net revenues are expected to grow to between USD 110 to USD 135 million. Last year, MorphoSys generated USD 79.1 million with the drug in the United States, according to preliminary figures. "We expect sustainable growth in 2022," MorphoSys CEO Jean-Paul Kress said of the drug. Gross margins are expected to be 75% to 80% in the process.

    Research and development spending is also expected to grow at the Munich-based company. For this year, the management expects EUR 300 to EUR 325 million. According to the Company, the reasons for the higher costs are the ongoing Phase 3 registration studies. In contrast, cash revenue from milestone payments should not be expected in 2022.

    While Steinhoff fights for survival, construction work at Almonty Industries continues briskly. Production is getting closer and should soon further demonstrate the potential. At MorphoSys, on the other hand, extreme caution is currently called for.

    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.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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    • tungsten

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