Close menu

June 22nd, 2021 | 12:07 CEST

Varta, BYD, NIO, Tesla, Almonty Industries - Battery becomes next billion-dollar topic!

  • RareEarths
Photo credits:

The extent to which reality sometimes diverges from stock market trends is especially noticeable in hotly traded stocks. Early last week, it was the postponement of CureVac's vaccine launch that caused the stock price to lose 50% briefly. Then on Friday, there was the virtual AGM of Varta AG. The mood was very good in the run-up and the share reached a 5-month high of EUR 142. But then there was a correction of over 10% and the price found itself yesterday at EUR 127. The reason: premium manufacturers like Porsche are now going into battery research themselves. This opens up a competitor for Varta among the intended customers - they certainly had not bet on this, but the battery issue is a billion-dollar thing!

time to read: 5 minutes | Author: André Will-Laudien
ISIN: DE000A0TGJ55 , CNE100000296 , US62914V1061 , US88160R1014 , CA0203981034

Table of contents:

    Varta - Good figures for the Annual General Meeting, but the pressure is rising!

    In the run-up to the AGM, the Varta share was able to make significant ground and break out of the sideways range of several months. Still, during the AGM, the share marked a new course high at EUR 142. In the absence of new buying arguments, however, the bulls ran out of steam. The change of mood on the US stock exchanges caused additional uncertainty.

    In general, the business with its battery solutions is going well for Varta. The increased profitability and the low level of debt make it possible this year to pay the shareholders a dividend of EUR 2.48 and at the same time to continue to invest massively. The construction of a new lithium-ion cell factory at the Nördlingen site will start soon. The pilot line for the new, large-format lithium-ion round cell V4Drive at the Ellwangen site will also go into operation on schedule at the end of 2021.

    Then, over the weekend, Porsche's plans to take the battery issue into its own hands became known. Porsche wants to produce high-performance battery cells on a small scale with Customcells, a cell specialist based in Tübingen, Germany. The battery factory is to be built in the Stuttgart area. Many market participants had put Varta into play here as a possible partner, but now things turned out differently. Again no good news for the Ellwanger; the analysts of the DZ Bank downgraded from Buy to Hold with the reason being - the potential is exhausted for the time being. Stay cautious, the Varta share has gained a full 30% in just 5 weeks.

    BYD - The price for chips is raised significantly

    BYD can currently enjoy great demand for its products. At the subsidiary BYD Semiconductor, there was recently an announcement about price increases of over 5%, affected are mainly the IPM and IGBT products, as Chinese media reported. Due to market changes, the costs for creating the Company's service portfolio are rising sharply, and the pressure at the supplier level is increasing analogously. Companies are still struggling with the disrupted supply chains related to the COVID pandemic. It will likely take months to regain equilibrium here.

    The BYD share is certainly not cheap, with a 2022 P/E of 70, but it still has a P/E ratio compared to many other Chinese high-tech companies, so it is in the black. And the rumor mill continues to bubble with activity at BYD. Now it is apparently about a cooperation with the Chinese smartphone manufacturer Xiaomi. The upward movement is therefore probably not over yet. However, after a 50% increase in 6 weeks, they should set a tight stop at around EUR 23.5 to stay on the winning road after the rally.

    NIO - Stronger growth than Tesla

    The year 2020 went exceptionally well for the US electric car manufacturer Tesla, culminating in its inclusion in the S&P 500 Index on December 21. And its Chinese competitor NIO can also look back on a successful year, with the Company increasing its share price tenfold in 2020. However, neither Company is resting on its laurels and has already made major investment plans for its electric offensive.

    Looking at the growth figures, NIO is ahead in the current comparison. Tesla is the pioneer in the electric vehicle business, especially compared to conventional car manufacturers, but innovation currently leaves a lot to be desired. Higher absolute sales figures are not less decisive in comparison; the Company's current focus is to achieve the highest growth in registration figures with its new models.

    The expansion of the market position in China is proceeding rather sluggishly for Tesla. Although much ado has been made about the China-made Model 3 vehicles, Tesla has sold only a little over 80,000 of these cars by mid-2021. That was good enough to claim the third-largest market share but is certainly not a real gamechanger. While Tesla may dominate the global market, there is not yet much evidence of its supremacy in China. For investors who can cut through the "noise around Tesla" and Elon Musk and simply want to bet on the growth potential of China's electric vehicles, NIO is the better choice. Here, success has been "quieter" - NIO's stock has outperformed Tesla by 25% in 12 months.

    Almonty Industries - Coveted commodity from South Korea

    The issue of scarce raw materials plays right into Almonty Industries' hands. Political pressure around decarbonization is causing global demand for nickel, lithium and rare earth metals to explode. Already since 2019, an excess of demand could be seen for most metals due to mine closures. Yet the energy transition is only at the beginning of its long-term cycle, with the German industry not really getting electrification on the map until 2020. But the Paris climate resolutions are being taken very seriously in Europe.

    Then, even under Joe Biden, the trade disputes with China keep coming up. China probably intends to impose strict export controls on 17 industrial metals, including rare earths. Global dependence on Beijing is once again preoccupying commodity strategists in the Western industrialized nations, leading to persistent price premiums. The same problem exists with the strategic metal tungsten, which is irreplaceable in many sectors of modern technologies due to its unique properties. And the dependencies do not only affect the chip industry, no - pretty much all high-tech industries have to live with this uncertainty factor.

    Almonty Industries, a Canadian explorer and producer, based in Toronto, mines in Spain and Portugal and owns other mining rights to tungsten and molybdenum in South Korea. The current main business is mining, processing and shipping tungsten concentrate from the Los Santos mines in western Spain and Panasqueira in Portugal. In the next few years, production will increase, as, in 2015, they acquired the Sangdong mine. It is historically one of the largest and highest-grade tungsten mines in the world outside of China. Almonty's global market share would then increase to high single digits with the start of the mine.

    Almonty's share price currently fluctuates in a corridor of CAD 1.10-1.20, bringing its market capitalization to just under CAD 200 million. Deutsche Rohstoff AG continues to hold a 12% stake as a core investor. Given the tense international situation around critical raw materials and expected news on the progress in South Korea, one should remain on the ball with Almonty Industries.

    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 in the future hold shares or other financial instruments of the mentioned companies or will bet on rising or falling on rising or falling prices and therefore a conflict of interest may arise in the future. conflict of interest may arise in the future. The Relevant Persons reserve the shares or other financial instruments of the company at any time (hereinafter referred to as the company at any time (hereinafter referred to as a "Transaction"). "Transaction"). Transactions may under certain circumstances influence the respective price of the shares or other financial instruments of the of the Company.

    Furthermore, Apaton Finance GmbH reserves the right to enter into future relationships with the company or with third parties in relation to reports on the company. with regard to reports on the company, which are published within the scope of the Apaton Finance GmbH as well as in the social media, on partner sites or in e-mails, on partner sites or in e-mails. The above references to existing conflicts of interest apply apply to all types and forms of publication used by Apaton Finance GmbH uses for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and etc. on These contents serve information for readers and does not constitute a call to action or recommendations, neither explicitly nor implicitly. implicitly, they are to be understood as an assurance of possible price be understood. The contents do not replace individual professional investment advice and do not constitute an offer to sell the share(s) offer to sell the share(s) or other financial instrument(s) in question, nor is it an nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but rather financial analysis, but rather journalistic or advertising texts. Readers or users who make investment decisions or carry out transactions on the basis decisions or transactions on the basis of the information provided here act completely at their own risk. There is no contractual relationship between between Apaton Finance GmbH and its readers or the users of its offers. users of its offers, as our information only refers to the company and not to the company, but not to the investment decision of the reader or user. or user.

    The acquisition of financial instruments entails high risks that can lead to the total loss of the capital invested. The information published by Apaton Finance GmbH and its authors are based on careful research on careful research, nevertheless no liability for financial losses financial losses or a content guarantee for topicality, correctness, adequacy and completeness of the contents offered here. contents offered here. Please also note our Terms of use.

    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

    Related comments:

    Commented by Stefan Feulner on May 21st, 2024 | 07:00 CEST

    Lynas, Almonty Industries, General Motors - Is the trade war escalating, and what is Tesla doing?

    • Mining
    • Tungsten
    • Electromobility
    • RareEarths

    The stock markets continue their record-breaking run. The Dow Jones Industrial has climbed to the 40,000-point mark for the first time in its history, and the DAX is also on the verge of breaking through the 19,000-point barrier. So far, so good, one might say. However, something is brewing in the background with regard to the trade war between the US and China, which could put enormous pressure on company margins in the future. As a result, critical commodities, in particular, are likely to be on the verge of a strong upward impulse.


    Commented by Fabian Lorenz on March 27th, 2024 | 08:45 CET

    Shares in Focus: TUI, Rheinmetall, and Defense Metals with good reasons for price increases

    • Mining
    • RareEarths
    • armaments
    • travel

    The TUI share was one of the top performers on the German stock market yesterday. The EUR 7 mark was exceeded, making things exciting on the chart. Analysts expect significantly higher prices for the tourism group. Rheinmetall shares are among the top performers of the year. An end to the price increase is not in sight. The armaments group has announced a new order worth billions. The manufacture of armaments, aircraft, cruise ships and numerous other high-tech products would not be possible without rare earths. However, most of these come from China and Russia. This makes the Defense Metals share interesting. The Company is making great strides with its rare earths project in Canada. The share should also benefit from this progress.


    Commented by Armin Schulz on March 19th, 2024 | 07:00 CET

    Volkswagen, Defense Metals, BYD, Rheinmetall - China's weapon in the tech race

    • Mining
    • RareEarths
    • Electromobility
    • hightech

    In the shadow of global power rivalries, rare earths play a crucial role, not only for the defense industry, but also for the booming electric vehicle market and the production of catalytic converters in the automotive industry. These metals are the invisible backbone powering high-tech devices and are of strategic importance for the global economy and security. China's dominance in extracting and processing such resources - as illustrated by Deng Xiaoping's statement: "The Middle East has oil. China has rare earths." - sheds light on potential geopolitical tensions and highlights the importance of supply chain diversification and resilience.