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October 11th, 2022 | 10:50 CEST

Stocks on a roller coaster ride, pay particular attention here: BYD, Manuka Resources, Porsche, VW

  • Mining
  • Gold
  • Silver
  • Electromobility
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Currently, there are few highlights to report from the stock market. However, the mega-deal for 100,000 e-vehicles between BYD and Sixt is worth mentioning. The successful IPO of Porsche AG was also quite exciting, and for VW, it is an important strengthening of liquid funds for the transformation process towards e-mobility. In addition to inflation figures of just under 10%, we are also seeing significant markdowns in the Bund futures. Interest rates continue to rise, and a wake-up call for precious metals is spreading. Here are a few ideas.

time to read: 5 minutes | Author: André Will-Laudien

Table of contents:

    BYD - Price slump despite the order of the century

    BYD recently closed a huge deal with the German car rental company Sixt. It is for the delivery of about 100,000 vehicles of different model classes until the year 2028. Sixt wants to present the E-innovations of the Chinese tech company to its customers with this campaign. For BYD and Sixt, this is a classic win-win deal because BYD can give its previously unknown cars to a wide audience for testing, while Sixt could probably negotiate a considerable discount because of the large number of units. There is perhaps no better way to clinch a deal.

    Shortly after the mega-deal with Sixt, BYD's stock rose sharply and reached the important line of EUR 28 again. Unfortunately, however, it went down again very quickly in the last few days to the catch-up zone of EUR 20 to 25. In a good stock market environment, such an announcement would have been good for a real rally. The disappointing share price performance is probably due to the fragile overall market situation. After all, there was also a price slump of almost 5% on the home stock exchange in China at the start of the week. The hardest hit were the two EV startups Li Auto and NIO, both of which lost double digits, while BYD suffered further losses. Chinese government leader Li Keqiang admitted that China's economy is currently weakening and still suffering from the consequences of the pandemic. A severe real estate crisis has also hit the country, and the purchasing power of the Chinese population is suffering greatly under these circumstances. For BYD, the expansion of international exports is therefore very important, and with the Paris Motor Show, things are really taking off in Europe.

    Manuka Resources - Super New Zealand deal not yet included in the share price

    Black clouds hang over the Swiss banking market, as the venerable Credit Suisse is reportedly in serious trouble. Is the financial institution, which has already attracted attention with scandals in the past, mutating into a Lehman Brothers 2.0? Since the rumors about a renewed bank failure, there has been a remarkable recovery movement in gold and silver. Within only 72 hours, gold rose a whole USD 100 to USD 1,725, and silver, at the same time, a jump of 15% to USD 20.60. Currently, there is no further news and the precious metals are correcting slightly again.

    Those who do not want to invest directly in the commodities can search around the world for promising precious metal projects, one of which can be found in Australia. Manuka Resources Limited, based in the Cobar Basin of New South Wales, is the 100% owner of two fully permitted mining projects, one gold and one silver, both located in the Cobar Basin. The Mt. Boppy project was one of Australia's largest gold mines in the early 20th century. While production was ongoing, interesting new discoveries were made at the site. Currently, production is dormant, and management is continuing drilling activities. A new mine plan is expected to be in place by the end of the year for prospecting operations starting in Q1-2023. Overall, this is a massive exploration zone of about 1,150 sq km.

    With the recent acquisition of the South Taranaki Bight project (STB), located off the west coast of New Zealand, the Company has reached a new order of magnitude. Not far offshore, 3.8 billion tons of iron sand, vanadium and titanium await mining. As a result of the acquisition, the number of shares issued has risen from 287 to around 465 million. Despite the significant leap in size, they currently cost only AUD 0.14, bringing the market capitalization to a low AUD 65 million.

    In addition to the new multi-metal reserves, things could get really exciting for gold and silver next year, as various research houses see "golden years for precious metals" with price targets between USD 2,000 and USD 2,500 and USD 30 to 40 per ounce, respectively, due to high inflation. Manuka shares are traded in Australia and Frankfurt, and investors can buy the stock at EUR 0.09 to 0.10. Because of the recent sell-off in small exploration companies, the opportunities clearly outweigh the risks here because, after all, Manuka projects can immediately go back into production and provide cash flow.

    Porsche and VW - EUR 10 billion for e-mobility

    Group parent VW has successfully placed its "prettiest child", Porsche AG, on the stock exchange. With an initial listing at EUR 82.50, the 25% transaction flushed a whole EUR 9.7 billion into the Wolfsburg-based company's coffers. And anyone who thought that the new shares would collapse is wrong so far. Despite the poor environment, the Porsche share was even able to reach prices of around EUR 90 at the beginning of October. So there is demand not only for the classic vehicles from Zuffenhausen but also for the stock.

    But more important than the short-term rise is the long-term perspective of the Swabians. First, the investment community can rejoice at the stock market return of a very well-known automotive group. After the failed takeover of VW by the founding families in the crisis year 2008, shareholders only benefited indirectly from the Company's strong operating success. Thanks primarily to its commitment to China, Porsche increased its sales from around 100,000 to 300,000 sports cars between 2008 and 2021. Currently, China is ahead of Europe and North America in the geographical distribution of sales. In the last three years alone, group sales have risen from EUR 28.5 billion to EUR 33.1 billion, and that is in the midst of the pandemic. Porsche now has an equity ratio of 45%, which is unique in the automotive sector.

    The capital injection of almost EUR 10 billion appears important for VW. Currently, there is a wait of between 8 and 12 months for a desired e-vehicle from Wolfsburg. The Group would therefore be well advised to invest heavily to avoid falling behind the competition in terms of sales figures. Porsche is also likely to continue its noticeable upward trend, irrespective of the development in the e-sector. The brand is popular, and buyers can also afford the expensive fuel. In a comparison of the two shares, VW is analytically significantly cheaper, but the Group naturally lacks the special charm of Porsche.

    The stock market remains volatile and unpredictable. For investors, however, such a time is an opportunity to cherry-pick stocks that may have fallen by the wayside due to general trends. BYD and VW are very interesting at EUR 24 and 124, respectively. Manuka shines with a super deal, which has not been considered in the valuation so far.

    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    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 also 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

    André Will-Laudien

    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.

    About the author

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