TUI, dynaCERT, Evotec - The profit is in buying

TUI - Prospects are visibly improving

Given a growing desire to travel, TUI, Europe's No. 1 travel provider, is facing a promising year. The Company's management, represented by CEO Sebastian Ebel, is optimistic, particularly regarding popular destinations such as Majorca, which is expected to welcome millions of German vacationers. The German travel market has had a strong start to the year, indicated by an increase in overnight stays, and appears to be heading for another record year, almost on par with the pre-pandemic year, 2019. The global tourism economy is also showing signs of recovery and could soon return to pre-pandemic figures.

To appeal to even more customers in the future, the Company is using artificial intelligence to improve the booking process. Following a successful pilot project in the UK, TUI now intends to make greater use of the technology. In addition, the Group has published internal guidelines on the use of artificial intelligence, which focus on employee qualification, comprehensive training and ethical considerations. In terms of expansion, TUI is focusing on the DACH region and plans to open new hotels. These innovations are intended to strengthen the hotel portfolio on the one hand and to appeal to a target group of young, high-earning individuals on the other.

Despite these positive signs, the TUI share has only improved slightly. Turnover in the sector is showing stronger momentum, for example, due to longer lengths of stay and growing demand for upscale hotel categories. Accordingly, the outlook for the share is positive. This is also the view of the analysts at Morgan Stanley, who have issued a "Buy" recommendation with a target price of EUR 10.00. From a technical perspective, the share exceeded the important EUR 7.50 mark on Tuesday, which could generate upward momentum. The share is currently trading at EUR 7.52.

dynaCERT - Revolutionizing diesel engines with hydrogen technology

Every year, millions of diesel engines are produced worldwide, of which more than one billion are currently in operation in various sectors such as transportation, shipping, construction and power generation. The problem is the emissions from these engines for the environment. With its HydraGEN™ technology, dynaCERT has made it possible to reduce these emissions. Using an innovative electrolysis unit, distilled water is converted into hydrogen and oxygen gases on demand, improving combustion efficiency in diesel engines. In addition to reducing emissions, less fuel is consumed.

HydraLytica™ software collects data on the vehicles with the integrated HydraGEN™ technology. These fuel savings and greenhouse gas reductions are used to generate data for potential emission credits. These CO2 certificates are to be issued by Verra. Work on this has been ongoing for some time but has now reached the final stage. At the end of November, Earthood Services delivered the last missing report for Verra. The Verra website now also shows that the dynaCERT technology is in the "Final Verra Review" phase. So it cannot be long now until dynaCERT gets the green light.

This would be a milestone for both customers and dynaCERT. Customers could use the carbon credits generated as an advertising opportunity as their carbon footprint improves - dynaCERT shares the carbon credits with customers, generating recurring revenue. In addition to the HydraGEN™ system, the Company is also involved in Cipher Neutron. It is a cleantech company that focuses on producing low-cost green hydrogen using AEM electrolyser technology. Further information can be found in the presentation by CEO Jim Payne from the 10th International Investment Forum that took place in February. The share is currently trading at CAD 0.15.

Evotec - Candidate for a takeover?

Evotec is characterized by global development partnerships and is positively highlighted by analysts for its broad project pipeline and the potential for future pharmaceutical successes. With the expectation to increase revenues to EUR 1 billion and adjusted operating profit to at least EUR 300 million by 2025, the Company is looking ahead to further innovative breakthroughs in drug development. The unexpected resignation of the former CEO, Werner Lanthaler, should no longer play a role in the future, even if it is responsible for the share price crash.

Last month, the Company reported three pieces of positive news. The first was a framework agreement between Evotec and Claris Ventures to accelerate the programs of Claris' portfolio companies into the clinical phase using Evotec's platform. On March 14, Tubulis closed a EUR 128 million financing to accelerate the clinical development of its solid tumor ADC pipelines. Evotec indirectly benefits from this through its strategic partnership with Bristol Myers Squibb, which is responsible for the development and commercialization of the antibody-drug conjugates.

Then, Evotec's spin-off Breakpoint Therapeutics GmbH announced that BTX-011, a promising polymerase theta inhibitor, has been nominated as the first preclinical development candidate for the treatment of solid tumors and that IND-preparatory activities have started. The share has not yet experienced any real upswing. With a market capitalization of around EUR 2.4 billion and a share price of EUR 13.79, the share could become a takeover target. There have recently been a number of takeovers in the biotech sector.

All three companies presented appear favorable in the current environment. The TUI share has not yet been able to participate in the general industry recovery and has some catching up to do. dynaCERT would achieve the big hit with the Verra certification, and the share would have to be revalued immediately. Evotec has come under pressure due to the resignation of the CEO, but operations are going well, and so are the prospects. The share price should rise if the Company becomes a takeover target.