The next gold rush with silver! dynaCERT and JinkoSolar remain winners, caution with Nel and thyssenkrupp

JinkoSolar – Now it is Germany's turn

The stock of Chinese solar panel expert JinkoSolar is down more than 25% for the year, making it one of the year's losers. Persistent pressure on margins, falling export figures, and a struggling domestic real estate market are causing trouble for the Company. In Q2, total output delivered rose by 36% to 25.3 megawatts, but sales fell by almost 22% to USD 3.3 billion. The gross margin in the reporting period was a weak 11.1%, compared to 15.6% in the same period of the previous year. The bottom line was a minus of USD 156.6 million, and the operating margin plunged to negative 4.6%. "Due to the global oversupply, the sector is facing consolidation," summarized Frank Niendorf, Head of Europe.

However, the market leader continues to focus on Germany. The Company plans to carry out a capital market placement in the near future. The technology subsidiary Jiangxi Jinko intends to offer shares on the Frankfurt Stock Exchange. Including a greenshoe option, a total of around 1 billion shares with a nominal value of 1.0 yuan in the form of Global Depositary Receipts (GDRs) are expected to be offered. Each GDR represents ten ordinary shares of Jiangxi Jinko's original shares, which are currently only listed in Asia. Approvals from the Shanghai Stock Exchange, the Frankfurt Stock Exchange, and the German Federal Financial Supervisory Authority are still pending. In the long term, Jiangxi Jinko is an interesting growth stock, and this move will also provide fresh capital for the parent company.

dynaCERT – In Pole Position with VERRA

The Canadian company dynaCERT is a technology supplier for the transportation industry across all segments. With the company's in-house hydrogen add-on units under the name HydraGEN™, diesel combustion processes can be optimized to such an extent that, depending on the type of use, fuel savings of between 8 and 15% can be achieved. In addition, the soot and nitrogen oxide levels are reduced, so the exhaust gases are cleaner. The technology is particularly suitable for public transport companies, logistics fleets, and mining companies to achieve ESG guidelines and reduce the CO2 footprint of entire fleets.

After a long run-up, the important certification by VERRA finally took place at the beginning of October. HydraGEN™ technology is now a recognized process and part of the VERRA organization's range of applications. What sounds highly scientific is of inestimable value for dynaCERT because now customers with a comparatively low entry of about CAD 6,000 per vehicle can be offered an environmental solution that not only provides significant fuel savings but also generates tradable emission certificates. Large-scale carbon reductions are an important topic for the future, particularly for fleet operators, mines and public transport. What needs to be considered now are the new orders that will soon be invoiced. Several deals are expected to be finalized in 2024.

The DYA share price jumped by over 40% at the beginning of October. The Company is now also an ESG-relevant and heavily traded company in Germany, with trading volumes of over 2 million shares on some days. With a market capitalization of more than CAD 100 million and the long-awaited certification, there is now also an incentive for institutional investors to add the stock to their portfolios. The big upswing in the share price is still to come!

Nel ASA and thyssenkrupp – Ongoing problems create pressure

Not all stocks can look back on a good year of investment despite booming markets. The two industrial and technology specialists, Nel ASA and thyssenkrupp, are suffering from exceptional charges. In the case of Nel ASA, it is the never-ending operational pressures. The last quarter, for example, again fell short of analysts' expectations, with only 2 of 21 analysts on the Refinitiv Eikon platform now issuing a "Buy" recommendation. The median 12-month price target is NOK 5.00. With the current price at NOK 4.45, the potential is obviously limited.

The situation is not significantly better for the Duisburg-based steel and technology giant thyssenkrupp. In September, the share price fell to a 5-year low of EUR 2.76. Analysts do not expect the big rebound in the figures until 2025. Then earnings per share are expected to rise again to EUR 0.77. With prices of around EUR 3.25, the current P/E ratio is a low 4.5. A spin-off of the marine division could also be an exciting prospect, as business here is booming due to increasing orders in the armaments sector. Certainly, some investors have already speculated on such an event, as the price was able to shoot up by a further 20% within four weeks. With a market capitalization of EUR 2.16 billion, the German industrial pearl is dramatically undervalued because the restructuring is already well advanced. Collecting in the range of EUR 2.90 to 3.30 makes sense, but the next technical resistance is already lurking at EUR 3.50.

The stock markets are currently celebrating a series of interest rate cuts, which are on the cards due to slightly lower inflation figures and a declining economy. Geopolitical uncertainties have become more of a buying argument, as they are boosting certain sectors of the economy. In terms of stock selection, there are opportunities in the high-tech, defense and energy sectors. Our selection group is benefiting from the current trends, with dynaCERT, in particular, appearing to be well positioned.