June 29th, 2022 | 12:10 CEST
The super battery is coming: Varta, Altech Advanced Materials, BYD, VW - Who will supply it?
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"[...] We know exactly what we are doing and are implementing what we consider to be a proven technology in an industrially applicable and scalable way. [...]" Uwe Ahrens, Director, Altech Advanced Materials AG
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.
Varta AG - In 2023, it could become really exciting
There are always rumors surrounding VARTA concerning further advances in the lithium-ion division for motor vehicles. Most recently, Varta announced that it would extend its V4Drive technology to the overall market for battery electric vehicles, i.e. it also wanted to produce larger formats. Varta sees the new power cell being used primarily in electric sports cars and other premium vehicles. The so-called 21700 cells should charge in just 6 minutes and still be powerful even at extremely low temperatures. Porsche was rumored to be the first customer. The markets still have the delivery vision of 2023/24 internalized here, which is already within reach from today's point of view.
At the Annual General Meeting this week, Varta shareholders were given an overview of the latest business development and an outlook for future development. In addition, the distribution of a dividend and the approval of a capital increase to finance the growth offensive was obtained. Varta is sticking to its target of increasing sales and expects group sales of between EUR 950 million and EUR 1 billion for the current year, which corresponds to an increase of up to around 10% compared to the previous year. The Ellwangen-based company continues to invest in the expansion of its production capacities, especially for lithium-ion batteries. Currently, the Company is delivering several tens of thousands of ultra-high performance lithium-ion round cells per month for release tests to customers from its pilot line in Ellwangen.
The Varta share had recently failed several times to regain the EUR 90 mark and had reached its low of around EUR 68.50 in May. Recently, the value has risen steadily to over EUR 80. The fundamental figures should gradually improve, so stay alert but remain cautious!
Altech Advanced Materials - Several patent applications provide proof of concept
Once again, Heidelberg-based Altech Advanced Materials AG (AAM for short) has taken a significant step forward, as it has filed its first patent applications for the Company's proprietary Silumina AnodeT battery material technology. The Company is targeting core markets such as the USA, Europe, China, Japan and Korea, but applications have also been filed for up to 156 other countries. The technology in question is to be manufactured at the planned battery coating plant in Saxony. Altech Advanced Materials holds a 25% stake in this plant, with the remaining shares held by the Australian parent company Altech Chemicals Limited. Setting up a complete battery materials plant costs a lot of money, which is why Altech has embarked on this project with its financially strong parent company Altech Chemicals Limited. The delivery of test material for qualification purposes will soon be made from a pilot plant right next to the future factory.
With the technology at hand, AAM has already successfully developed a battery with 30% higher performance and lifetime. If one follows the statements of the AAM management, there is huge potential. The automotive industry is desperately looking for new processes and technologies to give the e-mobility idea a secure technological basis. Ranges of up to 500 kilometers are not yet a sufficient substitution argument for drivers of a German premium combustion engine, and the industry still has a long way to go. For mass production in the planned plant in Saxony, Altech has already published a pre-feasibility study. Details on AAM's technology can also be found in a detailed study on researchanalyst.com.
The AAM share has been able to soak up significant spring air in the wake of the fossil fuel price explosion. It has performed very well in the first 6 months of the current year with a 45% gain in a partially collapsing overall market. However, the rally could only be at the beginning because of the interesting future product.
BYD and VW - The Chinese market shows us how it's done
Hardly any other market is implementing the topic of electromobility as impressively as the Chinese market. The sales figures of the most important suppliers are rolling over from month to month. These are not Tesla & Co. across the board but domestic mass manufacturers such as BYD and the newcomer NIO.
VW had also been able to report steady growth in Asia through 2019. However, VW China's sales figures have declined since the Corona pandemic. A burdening factor, in addition to the availability of sufficiently low-priced models, was, of course, also the steadily growing competition. To counteract this development, VW is now restructuring its China business. Starting in August, Ralf Brandstätter will take over the position of board member for China and plans to establish a board under his leadership. The members are well-known in the industry from the executive suites of Audi, Volkswagen and the software subsidiary CARIAD. Former VW Russia boss Stefan Mecha and Marcus Hafkemeyer - most recently at Huawei Automotive - are also on the board.
In a direct comparison, BYD shares are clearly ahead, having gained 53% in the last 12 months. The VW share is different, having already lost more than 30% in the wake of expected production declines due to disrupted supply chains. However, investors should now take notice because the Chinese miracle could also suffer from rapidly rising interest rates, and the spread between BYD and VW could quickly narrow again. Fundamentally, VW is trading at prices around 140 with a P/E ratio of 4.5 and a dividend yield of over 7%. At BYD, it is mainly institutional investors like the Korea Investment Management Fund that are currently buying. There, the growth stock, valued at a P/E ratio of 70, is a top pick. The BYD share looks very good from a chart perspective and can certainly rise even further. VW investors should at least put the share on the turnaround watchlist. A significant economic slowdown, however, would not be good news for either stock.
The automotive industry currently has to master many complex issues. The shortage of raw materials and the supply chain issue are having a total impact on operating performance. VW is heavily dependent on suppliers, while BYD produces important parts itself. In the battery sector, Altech Advanced Materials is making exciting progress, and Varta should also turn the corner in the course of the year.
Conflict of interest
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