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July 4th, 2024 | 07:05 CEST

Takeover battle, boom, and price surge: Evotec, Siemens Energy, Royal Helium in focus

  • Helium
  • renewableenergies
  • Biotech
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Is Evotec heading for a takeover battle? The share price crash has likely attracted private equity. Now, the biotech company is said to have hired an investment bank for defence plans. An order from the US Department of Defense comes at the right time. Helium is also likely to gain importance in the US. The noble gas is indispensable for quantum computers, rockets, and other high-tech applications. In Canada, Royal Helium is currently making the transition from explorer to producer. The share is ripe for a price surge. Siemens Energy's share price currently only knows the way up. And according to analysts, a further 50% is possible.

time to read: 4 minutes | Author: Fabian Lorenz

Table of contents:

    Royal Helium: Breaking from the bottom formation?

    The importance of helium is massively underestimated by the general public. On the one hand, it is necessary for technical processes that use superconducting magnets, such as in magnetic resonance imaging. The noble gas is practically irreplaceable as a coolant in the field of high technology, including particle accelerators and quantum computers. There is also no alternative to helium in the semiconductor industry, in rockets and fibre optic cables.

    Royal Helium is currently taking the exciting step for investors from explorer to helium producer and aims to become a globally renowned supplier in the coming years. The Company has secured more than 400,000 hectares of promising helium concessions and leases in Canada. In the Canadian province of Saskatchewan, the Val Marie project is being developed together with Sparrow Hawk Developments. The cooperation partner is providing an impressive CAD 25 million for the project.

    The Steveville project is already in production. The purification plant can process 15 million cubic feet of raw gas per day and is supplied from two helium wells drilled by Royal. Steveville is designed to last 25 years.

    Royal CEO Andrew Davidson: "*We are pleased that the helium purification plant at Steveville is running at a steady production rate and that the entire team is moving the plant into the final stages of capacity expansion under the world-class supervision of Progress Through Technology. *The plant is designed to be fully automated and self-powered so that once it reaches a steady state, the operation can quickly become cash flow positive with very low operating costs."** The plant will benefit from carbon credits and provide Royal Helium with additional cash flow.

    Royal shares are also traded on Tradegate in Germany and have been bottoming between 5 and 6 euro cents since April. With the positive operating newsflow and the demand for helium, there is significant upside potential. After all, the share was already trading at 50 euro cents in 2021 and was not nearly as advanced operationally as it is today.

    Evotec supports US army and fights for independence

    Will Evotec soon be facing a takeover battle? According to a report in the "FAZ" newspaper, the biotech company is preparing for such a scenario. Bank of America is said to have been mandated to draw up concepts for fending off takeover attempts. Private equity companies are apparently taking a closer look at Evotec. The takeover rumors have given the share a boost in recent days, and the attempt to exceed the EUR 10 mark is underway.

    Operationally, an order from the US Department of Defense was recently reported. Evotec's subsidiary Just is to develop monoclonal antibodies for the rapid response capability of medical countermeasures. The contract has a volume of up to USD 39 million. The production solution optimized by Just will be seamlessly integrated into the US government's rapid emergency response system. Just manager Dr. Linda Zuckerman: "We are proud to have been selected to provide our expertise and technologies to support this important program. We look forward to advancing our end-to-end biologics development platform and partnering with the DOD to bring mAbs to the clinic with next-generation development in a rapid, high-quality and cost-effective manner."

    Siemens Energy facing a golden future?

    While Evotec has to prepare for a takeover after the share price decline, Siemens Energy is bursting with strength. At the end of 2023, the Company was still surrounded by the spectre of insolvency. The problems at subsidiary Gamesa seemed to be a bottomless pit that dragged the entire Group down. But this has long been forgotten - or at least overlooked. The Siemens Energy share is one of the top performers of the current year, and the strong development in the grid business overshadows potential problem areas.

    In an interview with the "Süddeutsche Zeitung", Tim Holt, the Managing Board member responsible for the Grid Technologies division, said: "*In the next 15 years, we will see investments in the grid worldwide that are as large as those of the last 150 years. *We want to participate in this boom and are therefore investing a total of EUR 1.2 billion by 2030 and creating around 10,000 jobs." The jobs are to be created in Germany, the UK, Austria, Croatia and, to a lesser extent, Romania. In the first half of 2024 alone, the grid division recorded an order intake of over EUR 12 billion. Previously, the order volume had already more than doubled from EUR 7 billion to EUR 15 billion in just three years.

    For Goldman Sachs, Siemens Energy's investment plans indicate that the division's medium-term targets are too conservative and offer scope for increases. The "Buy" recommendation was therefore confirmed. The price target of EUR 32.70 is a good 50% above the current level.

    The Siemens Energy share has already had a fantastic run this year, and a consolidation would be healthy. Operationally, however, everything seems to be going well, but Gamesa remains a risk. There are also risks with Evotec. However, many negative factors are likely priced into the current share price. By contrast, Royal Helium's operating progress is not yet reflected in the share price. If the share breaks out, it could go up very quickly.

    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

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author

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