September 6th, 2021 | 10:24 CEST
Varta, EuroSports Global, BYD: New growth opportunities around e-mobility
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"[...] We know exactly what we are doing and are implementing what we consider to be a proven technology in an industrially applicable and scalable way. [...]" Uwe Ahrens, Director, Altech Advanced Materials AG
At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Varta: Where the pitfalls lurk
The Varta share is a classic among German private investors - after all, the brand and prospects are right here. The German Company wants to enter the business with batteries for electric cars and has already set this course. For many investors, the combination of brand and fantasy was enough to make the share seem attractive - at times, the value reached EUR 180. However, Varta recently faced headwinds. Bankhaus Metzler advised selling the share.
Unfavorable price developments could overshadow the planned growth phase at Varta, the analysts said. Also, the dependence on Apple is considerable. The price target of Bankhaus Metzler is thus only EUR 106 - around EUR 25 below the current level. With their current assessment, the analysts express concerns already circulating among investors for months: Growth is always associated with risks. At the same time, competition for batteries for e-cars is likely to be fierce - especially in Asia. It remains to be seen to what extent Varta, as a latecomer, will find its way into the market. The stock is not the best choice.
EuroSports Global: Great potential around e-motorcycles
Currently under pressure is also the share of EuroSports Global. The Company manages the up-and-coming motorcycle brand Scorpio Electric and aims to offer its customers sustainable riding fun. In addition, it sells luxury cars in Asia and offers related services. While e-motorcycles are already almost as widespread as combustion engines in China, the market share in the USA is only around 10%. In Europe, it is only about 5%. For EuroSports Global, this is a major growth opportunity. Already today, Scorpio Electric offers an inexpensive model for around USD 8,000, which has a range of 200 km and scores with a top speed of up to 120 km/h and a rich acceleration.
The share price has dropped significantly in recent weeks - even a buyback program for the Company's shares could do little to change that. But if you take a closer look at the Company, there is much to suggest that it will prevail in the long term after all: The motorcycles have an advantage over the competition from NIU, Vespa or Super Soco. Added to this is the new motorcycle project with Strides Transportation. The joint prototype is to be unveiled this year. EuroSports Global offers a stake in the growth market of e-motorcycles and has a rock-solid foothold with the distribution of luxury cars in Asia. The stock is battered but worth a well-founded look, especially at the current valuations.
BYD: From newcomer to old hand
One Company in the field of electric mobility that all eyes are on is BYD. The Chinese are true pioneers! Around ten years ago, the shares of the then battery manufacturer were already considered an insider's tip for anyone who wanted to invest in the future of mobility. Today, BYD is significantly further ahead. The manufacturer has its cars on the road and scores points with its customers offering longer ranges and competitive prices - the models from Volkswagen do not stand a chance against BYD from many points of view. One reason for the low prices could be the Chinese manufacturer's comprehensive value chain. BYD builds batteries, processors and cars and thus offers a lot from a single source, and of course, the Chinese have good access to raw materials. The share has been trading between EUR 27.50 and 30 in Germany for months. Investors should take this range into account when making short-term investment decisions. In the long term, BYD is fundamentally well positioned, but it is also a bit expensive.
Just a few years ago, BYD was considered a newcomer. When comparing the three stocks, the Company must be seen as an old hand, for which the perspective seems limited. Varta, on the other hand, is considered a latecomer. Here, it remains unclear whether the Germans will smoothly manage the entry into a new market. EuroSports Global may be a small-cap, but it has a great deal of experience in e-motorcycles and can keep up well with the competition. Given the still small markets for e-motorcycles, the value could also become attractive for investors.
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