14. October 2021 | 13:37 CET
ThyssenKrupp, Graphano Energy, BYD: The hype returns
Prices are rising and the economy is booming. Supply chains are not yet running smoothly again, meaning that many basic materials are expensive. But the signs for rising raw material prices are also good in the long term: New technology is driving demand, both for entirely new applications such as batteries and for infrastructure. Buildings, bridges, wind turbines - all of these will remain a topic for years to come. We present three stocks that could benefit from these developments.
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ISIN: THYSSENKRUPP AG O.N. | DE0007500001 , Graphano Energy Ltd. | CA38867G2053 , BYD CO. LTD H YC 1 | CNE100000296
ThyssenKrupp: What can the stock do?
As a steel producer, ThyssenKrupp should always benefit when the economy is doing well. It is not for nothing that companies in this sector are also seen as economic indicators - if cyclicals are doing well, things also look promising for all other speculative stocks. But what is the situation like for the Company from Düsseldorf? ThyssenKrupp is still in the red but is fighting its way out of the trough. To this end, the Rhinelanders have launched a program to increase efficiency. ThyssenKrupp has closed some logistics sites and expanded automation and digitization. Although these measures are not yet overwhelmingly reflected in the figures, the past two quarters have been slightly better. Order intake also increased, growing by as much as 14%.
On the stock market, ThyssenKrupp's share has taken a breather in recent months - over a three-month period it has lost 2.4%. In the past year alone, however, the stock has risen by more than 90%. On a three- or five-year horizon, however, there are still significant losses of around 60%. ThyssenKrupp's share is still a long way from returning to the favorable waters of the past. However, at the current level, a bottom could be in sight. However, the blue-chip is not very promising without a dividend.
Graphano Energy: Battery metals for North America
A completely different caliber is the small Company Graphano Energy, which has set itself the goal of mining graphite and bringing it to market in battery quality. Graphite is characterized by its numerous layers. Within these layers, graphite is very strong, but the individual layers are largely movable or can even be separated. As a result, graphite also has unique properties used in various areas - from the steel industry to battery technology. Specifically, the high melting point and the electrical properties are convincing as the anode in batteries. Graphano Energy is moving forward with its Lac Aux Bouleaux project, close to the only graphite mine in North America and has energy and transportation infrastructure.
The Company itself expects demand for graphite to increase to 5 million tons annually, necessitating dozens of new mines over the next five to ten years. As the industry looks to become increasingly self-sufficient, also against a backdrop of disrupted supply chains, Graphano's location in Canada could be an essential selling point. Most recently, the Company has completed an initial exploration phase at Lac Aux Bouleaux, where it has carried out mapping work, soil sampling and other preliminary work. The remaining work alone could provide clues as to where the journey is headed for the Company. The current schedule calls for a resource estimate and initial indications of feasibility as early as 2022. Currently, the Company is valued at around CAD 5 million.
BYD: Share is on course for an annual high
One of the potential customers of Graphano Energy could be BYD. The Chinese automaker has traditionally had access to raw material deposits in its own country, but depending on how much the brand expands, BYD is likely to tap other sources as well. The Company has always positioned itself as very self-sufficient: In addition to its battery production, BYD also has a chip division that benefits the automaker right now. Although competitors, such as Elon Musk, repeatedly criticize the Company, its success proves the Chinese right. On the stock market, the share is once again heading for the highs of the year. It looks like the e-car hype that electrified the stock markets a little less than a year ago is making a comeback.
While BYD has already picked up steam and is attracting more and more investors, stocks like Graphano Energy are likely to be delayed in benefiting from the growing appetite for e-car shares. For laggards, this may be an opportunity. However, investors should note that such projects are speculative. On the positive side, graphene is also in demand from traditional industries. However, as the example of ThyssenKrupp shows, there is currently little to be gained for investors there.