November 25th, 2021 | 15:19 CET
Varta, Graphano Energy, BYD, NIO: Who supplies the blockbuster battery?
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"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
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.
Varta - Investors remain in a waiting position
The Varta share has recently regained its footing after the sharp sell-off during the summer months. Since the beginning of October, the value has gained over 25% again to a good EUR 130. Most recently, there was once again a revision by management on the 2021 sales target, which has put the price under pressure with high turnover. Fortunately, Tesla shares are now back on the gas and, as the industry leader, pulls all protagonists like a magnet.
A look at the technology now draws a fairly well-defined pattern between EUR 110 and EUR 130. The price seems to fluctuate back and forth more or less dormant in this range; a breakout on one side or the other is likely to ignite a stronger price momentum. The falling 200-day line currently has a limiting effect at around EUR 128, but the current price is a good EUR 10 away from this. After reaching the stop at EUR 127.50, we removed the share from the list; now, we wait to see what is reported fundamentally. A return of momentum seems possible at any time in the current environment.
Graphano Energy - An essential material for the future
The demand for energy storage is putting high-tech producers around the world in a bind. The exponential increase in demand in the battery sector leads to an enormous shortage of available resources and brings active mines to full capacity. On the stock market, lithium and copper stocks are predominantly in demand on this topic, although experts point out that graphite is also an essential material for battery production.
Graphite is rare and occurs naturally in isolated flakes and grains in carbon-rich metamorphic rock and as veins in pegmatite. It functions as an important anode material after processing and is indispensable in today's Li-ion cell. In addition, it is a multifunctional building material in the high-tech industry because of its flexibility in processing.
Graphano Energy is an exploration and development company focused on developing energy metal resources from exploration to production. It was a spin-off from Canada's Manganese X-Energy and has been independently listed on the stock exchange for just over 2 months. The Company's Lac Aux Bouleaux property in Québec is a known area that has natural graphite. Recent exploration results from the eastern and southern zones have helped identify several new deposits. Geophysical surveys are proceeding well as expected and are providing indications of additional mineralization. Approximately 190 samples have been sent to the laboratory for assaying. Assay results have been received to date on about 50 samples, ranging from 0.34% to 23.5% graphitic carbon (Cg).
Graphano share is trading very actively in Canada and Frankfurt, with several hundred thousand shares traded per day. The valuation is currently CAD 12 million, which is still small compared to other battery stocks. Compared to the starting value in September of CAD 0.36, the price has approximately doubled. Limit your entry so as not to be over-served.
BYD versus NIO - The industry leader runs ahead
The BYD share has been running great over the past few months. Even with the May correction with prices around EUR 15, the value survived with a subsequent doubling. Even the scandals surrounding the Chinese real estate industry affected BYD investors only slightly. Now, the price could even positively resolve the dangerous double-top formation at EUR 36. Thus, the zone around EUR 30 now becomes massive support to the downside. Fundamentally, BYD is very strongly committed to electric buses. Nobina, the largest public transport company in Scandinavia, has ordered another 70 buses of the latest vehicle generation from BYD to make its bus fleet more emission-free.
The situation is somewhat different at NIO. The Chinese company is still young but is currently presenting an exciting range of new e-SUVs. It has also aroused the interest of state institutions in the use of zero-emission cars. NIO was thus able to deliver eight police cars in Qingdao, East China's Shandong province. The model in question is the ES6, a five-seat SUV. As a result, it has paved the way for access to public-sector customers.
Unlike the established manufacturer BYD, NIO is still a start-up - but visibly ambitious. In a direct price comparison, NIO has recently come under some pressure, with the 12-month return remaining negative at minus 18%. BYD, on the other hand, can report a positive performance of 64% over the year.
In the industry context, both manufacturers remain attractive, and the greater certainty indeed lies with BYD. NIO is said to want to roll up the SUV market with 30% cheaper models. Speculatively, one can certainly follow this project, but a positive cash flow will probably only be achievable for NIO from 2025, whereas BYD could already manage this in the coming year.
The struggle for market share in the e-mobility market will also be decided by the important parameter "battery". Tesla, VW and BYD are taking different paths here. The consumer can still sit back and drive a combustion engine until the offer appears sufficiently attractive. For Varta and Graphano, the requirements of the industry are set. Now it is just a matter of delivering!
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