December 22nd, 2021 | 12:50 CET
Varta, Graphano Energy, JinkoSolar: Is the climate turnaround off?
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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
Varta: It must happen now!
Germany's battery hopeful, Varta, is something of a phenomenon. The Company, previously known for its button cells for headphones or hearing aids, is now getting into the production of batteries for e-cars. The German Company wants to score points primarily with performance and relies on the so-called round cell format, which Tesla also uses. Varta also emphasizes that it wants to profit from the experience gained from the production of around half a billion smaller battery cells to be competitive in e-cars. But what is the share price doing?
The share was considered an insider tip for a long time, and the price rose to EUR 160. In the meantime, however, disillusionment has set in around Varta. The long-term upward trend seems to be in danger. In addition, analysts no longer see great potential in the share. Orders are needed for Varta to gain new momentum. The time of advance praise is over. Now Varta must deliver. Then the share price can also start to rise again.
Graphano Energy: Graphite demand multiplies
The Graphano Energy share has also undergone strong consolidation - although the stock does not come from the energy sector, as one might initially believe. Graphano Energy specializes in the exploration of graphite deposits. Graphite has unique properties, is exceptionally strong and has good properties as an electrical conductor. As a result, graphite is in demand in both the steel and battery industries. Graphano operates the Lac-Aux-Bouleaux project in Canada and plans to bring it into production as soon as possible. A preliminary feasibility study is planned as early as 2022.
Graphite is experiencing increased demand thanks, in particular, to the mobility revolution. Analysts at Benchmark Mineral Intelligence expect demand from this sector alone to increase more than thirteenfold between 2020 and 2030. By contrast, demand from the other sectors is expected to increase by "only" around 56% within the ten-year period. Given these growth figures, Graphano Energy, which plans to go into production in 2026, could be in the right place at the right time - after all, corresponding deposits are in demand precisely where e-cars are built and sold. In addition, North America, with its environmental regulations, is considered a good location also from an ESG point of view. The share is speculative but exciting.
JinkoSolar: Share in an exciting area
JinkoSolar's stock is also anything but uninteresting. A few years ago, the Chinese already took the pole position around regenerative energies. Solar panels and photovoltaic cells from China are now cheap and extremely good. As the share of renewable energy in house renovations will increase more and more in the coming years, and the legal requirements will also become stricter and stricter, JinkoSolar should also benefit from the sustainability wave.
However, there is no sign of this on the stock market. The share has lost around 33% in the space of a month. If the current level cannot be maintained, there is even a threat of an end to the upward trend that has existed since the summer. Most recently, the threat of the US climate package coming to an end put the entire sector under pressure. Even Democratic Senator Joe Manchin announced that he would not be able to approve US President Joe Biden's package. But there is much to suggest that political skirmishes will remain and the package - in whatever form - will be adopted in the end. The climate turnaround is likely to remain intact regardless of the political disputes in the US.
To profit from the climate and mobility turnaround, investors have many options. While Varta and JinkoSolar are already ambitiously valued, Graphano Energy is considered a newcomer. Although this also entails a certain risk, experienced investors can note the value.
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