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January 25th, 2022 | 12:10 CET

The super battery for Tesla is coming: Standard Lithium, Meta Materials, BASF

  • Technology
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The raw material shortage continues seamlessly into 2022. Whether it is e-mobility, aircraft technology or renewable energies, just about all high-tech segments of industry require raw materials and processed materials in ever-increasing quantities. Manufacturers are struggling to maintain their supply chains because the pandemic is making things difficult. Mines are experiencing illness-related outages, and targeted delivery volumes are falling short of planning. Due to the permanent workload, there is also little time to explore new properties. Politicians are trying to create a certain degree of planning security for the domestic industry through long-term supply agreements with partner countries. We present three stocks that are performing well in the current environment.

time to read: 4 minutes | Author: André Will-Laudien

Table of contents:

    Standard Lithium - First projections for the launch

    Standard Lithium is making a name for itself again! First the massive 2,000% hype, then by the turn of the year 2021/22 a 50% slump. But speculation is now being revived, as initial lithium sales appear to be within reach. In January, the Company announced that a breakthrough in the production of the precious battery raw material had been achieved in the third quarter of 2021. Given the huge market potential, first revenues are now expected as early as 2022. Elon Musk has often called the supply of the white metal a bottleneck, so battery manufacturers would welcome an expansion of lithium supply.

    Canada-based Standard Lithium Ltd. specializes in the mining and production of lithium carbonate in brine leases in Arkansas and California. The Company's flagship "El Dorado" project is located in southern Arkansas, where it extracts the precursor to a battery-grade lithium in a 60,000-hectare brine area - equivalent to about two-thirds the size of the German state of Berlin.

    There are currently gripping project updates on the Company's SiFT pilot plant, as it succeeded in producing battery-grade lithium carbonate for the first time. The purity level reached an astonishing 99.83%; this was achieved in a single crystallization stage, in contrast to a typical process. A well-known US engineering and construction firm has been contracted to conduct a front-end engineering and design (FEED) study to finalize a production facility.

    Standard Lithium plans to scale production at El Dorado in large increments starting as early as 2022. For fiscal year 2021, Standard Lithium still posted a minus in EBITDA of CAD 13.7 million. In the current year, the Company wants to reach the operating break-even point. With a current price of CAD 8.10, the Company is valued at around CAD 1.3 billion, which still corresponds to 16 times the planned sales of 2023. The share is currently under intense pressure, and from a chart perspective, the price could still fall into the CAD 5.25 to 6.75 zone. Nevertheless: Standard is one of the most promising explorers on the way to production.

    Meta Materials - High-tech components for augmented reality glasses

    Meta Materials' (META®) stock faced a lot of praise and headwinds in 2021. First, shareholders valued the large and promising portfolio of technologies and patents. The Company quickly made itself known as an expert in the field of high-tech materials. In Nova Scotia, Canada, META® produces a range of highly functional materials and nanocomposites for diverse high-tech applications. In this context, the Company's proprietary technology platform encompasses three core competencies: holography, lithography and wireless sensing with strong IT networking and artificial intelligence (AI) embedding.

    The high-performance functional materials and nanocomposites developer will be at the SPIE Photonics West 2022 show in San Francisco, January 25-27, with booth #2161 in the Moscone Center. META® will demonstrate a range of photonic, electro-optic and electromagnetic components on the ARfusion™ technology platform for smart augmented reality glasses and demonstrate holoOPTIX™ SLANT, a unique series of high-performance, low-cost holographic notch filters based on Bayfol® HX photopolymer chemistry. The high-tech products should be well received.

    There was a historic turnover in the Meta share between May and June 2021, and 5-10 million shares were still traded per day at the turn of the year. The stock is currently under more pressure and is looking for chart support, currently at USD 1.75, just above the yearly lows. As of the end of Q3, Sept 2021, there was still over USD 140 million in cash, and the market capitalization calculates to USD 486 million. In the current environment, the mood on the NASDAQ needs to improve before investors start speculating again.

    BASF - The chemical giant rehearses change

    BASF shares got off to a solid start to the year. In the very first weeks, it went up by 6%. Especially in sustainably produced industrial goods, BASF's pre-products are very important. There is also good news from the oil and gas sector.

    The constant shortage of natural gas has prompted BASF's majority holding Wintershall Dea to make a strategic decision. Following its merger almost three years ago, the oil and gas subsidiary is optimizing its global exploration and production portfolio. In the future, it intends to focus primarily on natural gas production. Following the changes, natural gas will then account for around 70% of global energy production. The head of the BASF subsidiary, Mario Mehren, wants to work with lower emissions and more sustainability, which is why Wintershall Dea is concentrating on a carbon-efficient business.

    Although the Company also intends to produce crude oil in the future, it wants to focus on selected regions and projects. An agreement was reached with the Mexican oil and gas group Vista on the sale of its 50% share in the Argentinean shale oil blocks Aguada Federal and Bandurria Norte. The transaction value amounts to USD 140 million. Wintershall Dea is also withdrawing completely from Brazil.

    BASF shares are currently one of the highlights of the DAX. At EUR 65.10, the chemical giant regained the level of the beginning of 2020. From a chart perspective, the EUR 70 mark is now in sight. In addition to a book value of over EUR 40, shareholders also count on the high dividend yield of currently plus 5%.

    The high-tech industry is dependent on the delivery reliability of primary product suppliers. The non-availability of chips can slow down entire production lines. In e-mobility and climate protection, the demand is so high that suppliers such as BASF and Meta Materials are sitting on full order books. Standard Lithium will also soon be ready for its lithium production.

    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

    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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