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October 19th, 2022 | 14:10 CEST

These stocks are fighting the energy crisis: BASF, Nel ASA, JinkoSolar and Globex Mining

  • Mining
  • Commodities
  • GreenTech
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The current energy crisis is a homemade problem that has been felt primarily in Europe since the start of the war. For decades, Europe has relied on raw material supplies from Russia, and now, these have been sanctioned. Although the "old continent" has already made astonishing progress in upgrading its renewable energies, there is a threat of further price increases, blackouts and even electricity rationing if gas and oil supplies fail to materialize in the coming winter. By mid-2022, there were green power yields of between 43% and 61% of grid capacity, fossil fuels now account for only 15 to 20%, and nuclear power has been contributing only about 3.5% for several years. Nevertheless, a difficult winter probably looms because the fossil component is more than uncertain. Equity investors should look closely at who can prevail in this environment.

time to read: 4 minutes | Author: André Will-Laudien
ISIN: BASF SE NA O.N. | DE000BASF111 , GLOBEX MINING ENTPRS INC. | CA3799005093 , NEL ASA NK-_20 | NO0010081235 , JINKOSOLAR ADR/4 DL-00002 | US47759T1007

Table of contents:

    Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
    "[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

    Full interview


    BASF - Figures down slightly - what is next?

    Investors are currently receiving mixed signals from Ludwigshafen, Germany's largest chemical site. BASF, based there, earned significantly less in the 3rd quarter than in the previous year. Mainly due to depreciation and amortization, profit after tax in the preliminary calculation fell from EUR 1.25 billion to EUR 0.91 billion. This was heavily burdened, but not cash-effective, by write-downs on the majority shareholding in Wintershall Dea amounting to around EUR 740 million.

    Sales nevertheless increased by 12% to almost EUR 22 billion due to higher sales prices and good exchange rate developments. The 28% lower operating result of EUR 1.35 billion surprised analysts positively, as estimates were lower. The stock jumped shortly after the announcement at EUR 40 and traded at EUR 45.4 just under a week later. At BASF, higher procurement prices led to higher revenues.

    Group headquarters would like to flank the generally gloomy economic development in 2023 to 2024 with a EUR 500 million savings program configured specifically for Germany. It seems that the Ludwigshafen-based Company can counter the approaching crisis relatively well. BASF will present its detailed Q3 report on October 26. The outlook should be exciting.

    Nel ASA - Mega order from the Outback

    New CEO Hakon Volldal has some blockbuster deals to report since taking over the post, as Nel ASA surprises with bigger and bigger deals in a gloomy stock market environment. For the equivalent of EUR 60 million, Nel Hydrogen Electrolyser AS, a subsidiary of Nel ASA, has signed a contract for alkaline electrolysis equipment from Australia's Woodside Energy for its planned H2OK hydrogen project in Ardmore, Oklahoma, USA. A 200 MW project in the US had already been landed a few months ago.

    In Oklahoma, H2 electrolysis makes sense because the US state has sufficient water and, thus, green energy. H2OK is Woodside's first major hydrogen project in the US. The initial phase will produce 60 tons of H2 per day to make liquid hydrogen for fuel cells in commercial vehicles and heavy haulers. Nel ASA's stock is jubilant after the sell-off, jumping from EUR 0.95 to EUR 1.11 within 48 hours. The share is still not cheap, but positive momentum is noticeable again.

    Globex Mining - Now the opportunity is good

    Well-diversified Canadian commodity explorer Globex Mining is seen as a potential supplier of valuable metals in the energy renewal process. With international action being sought in favor of sustainable climate change, there is a need for a plethora of raw materials which find their way into GreenTech solutions. Jack Storch has been in the business for a very long time and is using the current market weakness to round out his portfolio, from which he has been able to generate a great deal of deals in recent years.

    Globex has now been able to close one such option deal with its 50% interest in Duparquet Assets Ltd. The Duquesne West/Ottoman property consists of 38 cells totaling 1,389 hectares and covers the gold-bearing Porcupine-Destor fault. Previous exploration indicated a number of gold zones along the strike length of the property. A NI 43-101 resource estimate is already available from 2011. Now, the proportionate property is being optioned to Emperor Metals Inc for a total of CAD 10 million and 15 million shares over 5 years.

    Global networking, access to raw material deposits, and the necessary courage to invest make the Canadians very successful, and even difficult times can be survived because of the abundance of interesting projects. Globex Mining has secured good jurisdictions and benefits from consistent royalty payments over time through many partnerships. The correction across the sector is well underway as even balanced stocks like Globex have lost over 60% in value. Jack Storch was still able to show a cash balance of CAD 9.8 million at the half-year point, yet its market capitalization has plummeted to CAD 37.3 million. If you are looking for entry opportunities - this is one of them!

    JinkoSolar - Even sometimes a quarter with a loss

    Investors considering solar technology from China should have JinkoSolar, one of the largest solar module manufacturers in the world, on their radar. Recently, the Company announced that it had received another large order for the supply of solar modules from its customer China Datang Corporation Ltd. Tiger Neo N-type solar modules with a total capacity of 780 megawatts (MW) will be supplied; the Company already received its first order from China Datang C for a total capacity of 1 gigawatt (GW) in June this year. According to the latest tests, the module efficiency of the n-type technology is said to reach up to 26.1%, making them much more efficient than conventional PERC modules. JinkoSolar is one of the first companies to commercialize this technology. The modules can be used for both energy utilities and rooftop installations.

    JinkoSolar more than doubled sales at the half-year point, but the Company temporarily slipped into the red due to high procurement costs. The sales prices have to now be adjusted, but this cannot be done overnight. From the high of around EUR 77, the share price has already weakened by 40%. S&P Global Market Intelligence analysts have an average Outperform rating with a medium price target of EUR 67.7.

    After weeks of sell-offs, the first countermovements are now taking place on the stock market. The momentum jumps to green, and there they are again, the price increases in the popular trend stocks. If you want to build up long-term holdings now, choose a balanced mix of value and growth and diversify across several sectors.

    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.

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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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