Trump makes peace – Maybe? Strong profit prospects for BYD, Pasinex Resources, and DroneShield

DroneShield – That went badly wrong

When Ursula von der Leyen registered drone flights over Lithuania, Latvia, and Poland, there was a massive outcry in Brussels. "We must be able to defend ourselves against this invasion of unknown flying objects!" Even before anyone could think about ordering suitable drone defense systems, the share price of Australian drone defense specialist DroneShield exploded. In just four weeks of trading, the share price quadrupled from EUR 0.60 to EUR 2.40, then consolidated slightly and continued to rise to a high of EUR 3.78 in October. There were already concrete declarations of intent from the EU to combat drones effectively. Several airports even had to divert or cancel hundreds of flights due to suspected drones above runways - resulting in millions in damages, but at the same time highlighting a billion-dollar market opportunity for DroneShield.

In mid-October, however, a strange announcement reached the public. Through clever option agreements linked to certain revenue hurdles, company employees were able to purchase a full 5% of the outstanding capital as shares and sell them immediately. The revenue threshold was the AUD 200 million mark. And because there appear to be no limits to self-service here, the next revenue thresholds for further options have already been agreed at AUD 300, 400, and 500 million. At the beginning of November, it became known that even the entire management team had thrown all their incentive shares overboard. As expected, the market reacted with a dramatic collapse in the share price from EUR 3.78 to EUR 0.82. The crux of the matter: we had reported in several reports on the exorbitant valuation of DroneShield with a P/E ratio of 40, and now, even 80% lower, the share is still valued at a P/E ratio of 8. **In addition, the Company will only start making a profit in 2030, provided that its ambitious plans come to fruition. A return of the share price to its February levels, around EUR 0.50, appears likely, representing another 50% downside from yesterday's closing price. We will reassess our valuation once the dust has settled.

Pasinex Resources – High-grade zinc for a fully electric future

A variety of critical metals are necessary for high-tech and defense applications. Zinc is one of them due to its metal refining properties, and it is also irreplaceable in battery production. Explorer Pasinex Resources is increasingly establishing itself as a strategically important player in the global zinc market. This sector is becoming significantly more important in light of the energy transition driven by e-mobility and sustainable battery technologies. Zinc is used as corrosion protection in infrastructure and is indispensable for modern zinc-ion batteries, which are considered safe alternatives to lithium-based energy storage devices. While high-grade zinc deposits are dwindling worldwide, Pasinex's projects in Turkey deliver exceptionally high ore grades of up to 50%, well above the market average of 10%. The Company is continuously expanding its position in Turkey. With the acquisition of the Sarıkaya project and full control of Horzum A.Ş., which includes the high-grade Pinargözü zinc mine, Pasinex brings together two first-class properties under one roof.

The quarterly figures as of September 30, 2025, reflect the investment and growth offensive. While a moderate net profit of USD 42,989 was reported for the third quarter (previous year: USD -245,877), the nine-month result showed a net loss of USD 1.13 million, impacted by one-time and administrative costs. Production and sales also diverged significantly. In the most recent quarter, 71 tons of zinc product were produced, but 700 tons were sold, indicating inventory levels and sales from stockpiles. The average zinc content of the products sold was a strong 43.4%. Total production for the first nine months was 1,044 tons, a strong sign of increasing production volumes.

Current strategic guidelines include planned expansion, in particular direct control over all assets, and a strengthened management structure, for example, through the nomination of Dr. Mehmet Kömürcü to the supervisory board. The complete takeover of Horzum A.Ş. and the Sarıkaya project secures exclusive access to high-quality zinc resources and opens up considerable exploration opportunities in the short to medium term. Through its expansion in Turkey and its 51% stake in the Gunman project in Nevada, Pasinex is further expanding its pipeline of potential high-grade deposits. The latest capital measures strengthen equity, with the number of shares increasing to 204.8 million. The market capitalization currently remains low at EUR 12.5 million, keeping Pasinex in an early valuation stage with far-reaching growth potential. Collect!

Listen to Pasinex Chairman Dr. Larry Seeley in conversation with IIF correspondent Lyndsay Malchuk in the following video.

https://www.youtube.com/watch?v=dV9QQmn0kug&t=4s

BYD – No end in sight for the sell-off?

Things are really heating up at Chinese e-mobility growth star BYD. The stock has already reached prices of over EUR 17 this year, but last week the price briefly fell back to EUR 10, ending the year in negative territory. Several problems have now come to light: Q3 quarterly profits have slumped by around 30%, which is attributed to intense price competition in the Chinese EV market. Regulatory intervention is also weighing on the Company, particularly as the Chinese government criticizes aggressive discounts and delayed supplier payments. BYD has also slowed down its production plans and postponed its planned capacity expansion in China, raising doubts about its future growth momentum. The plant in Hungary will not start production until mid-2026, while management has significantly revised its annual delivery target downward, from 5.5 million to 4.6 million vehicles. Analysts also view the product portfolio as no longer quite as fresh, as new models are not expected to hit the market in large numbers until 2026. The sharp drop in valuation is certainly positive: a P/E ratio of only 11.1 is expected for 2026, and experts on the LSEG platform calculate an upside potential of 45% over the next 12 months. The stock is likely to have ended its cyclical downward trend soon!

The stock markets are prone to slight corrections. Whether this will lead to a complete sell-off is questionable. After all, the major stock markets have gained a good 25% since April 2025. Is everything hunky-dory? Certainly not. As always, selection is key. Pasinex Resources could multiply in value from a standing start, while DroneShield continues to correct. BYD appears to be worth buying in the long term.