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March 31st, 2022 | 11:57 CEST

Varta, Phoenix Copper, JinkoSolar, Nordex: Numbers upon numbers, where is the explosive?

  • Copper
  • Electromobility
Photo credits: pixabay.com

The copper price reached its preliminary high on March 7, 2022, at around USD 10,730. Since then, we have seen a standard consolidation of 3-4%, which is not an unusual occurrence in the present uptrend. Thus, the coveted metal has exploded by over 100% since the beginning of 2020. Large mining groups and copper mines have often been able to post a multiple of this performance for themselves in the same period. For many market participants, the medium-term upward scenario for the industrial metal remains set. Since the political closing of ranks on e-mobility, demand for copper and battery metals has shot through the roof. Mine operators and governments worldwide are alarmed because the current recoverable capacities cover just 85% of the current year's demand. Who can close the gap?

time to read: 5 minutes | Author: André Will-Laudien
ISIN: VARTA AG O.N. | DE000A0TGJ55 , PHOENIX COPPER LTD. | VGG7060R1139 , JINKOSOLAR ADR/4 DL-00002 | US47759T1007 , NORDEX SE O.N. | DE000A0D6554

Table of contents:


    Nick Mather, CEO, SolGold PLC
    "[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC

    Full interview

     

    Varta - Highest excitement ahead of the figures

    It has rarely been this exciting. Varta is delivering its annual results for 2021 today. We have looked at the figures in advance and want to summarize the expectations of market participants and experts going into today's publication.

    The battery manufacturer is facing critical days, as the share price has been bobbing back and forth between EUR 85 and EUR 95, about 40% lower, since the last profit warning in the fall. At the height of summer 2021, up to EUR 166 was paid for the share. Due to the strong price correction in recent months, it is now crucial that the potentially unfavorable Varta share can provide a promising outlook for 2022 and subsequent years. In particular, the market is waiting for the super battery V4Drive and further deals with the well-known premium manufacturers.

    Most recently, Varta had repeatedly dampened the exaggerated market expectations. According to market consensus, sales should end up at around EUR 900 million. In terms of operating profit (EBITDA), the Executive Board and analysts are unanimously expecting around EUR 275 million, corresponding to an operating return of almost exactly 30%. As far as the outlook is concerned, a statement on the e-battery business is expected. The timing of market maturity is also crucial, as the competition, especially from Asia, is rushing ahead in leaps and bounds. So far, stock market analysts are only pricing in a sales increase of around 12% for 2022/23, which is too low for a growth value. After all, the planned turnover is currently valued at a factor of 3.5.

    It is, therefore, worth taking a close look at Varta today. Will the figures help the share back above the EUR 100 mark, or will it possibly continue to go down? Technically, the price should not fall below EUR 78; otherwise, there is a threat of trouble in the medium term. For a detailed update, please visit www.researchanalyst.com during the course of the day.

    Phoenix Copper - The next supplier from Idaho is in the starting blocks

    There cannot be enough copper suppliers at the moment. GreenTech producers have a massive need for the electrically conducting metal CU in all electrical components. Manufacturers of power equipment and high-tech products, in particular, are scrambling for favorable long-term contracts for supplies of the industrial metal, which has become rare.

    London-listed Phoenix Copper Ltd, with an operating property in Idaho (USA), owns the Alder Creek mining deposit rights. According to current plans, open pit mining could begin as early as mid-2023, and exploration work for this is in full swing. The total size of the Phoenix claims, including the Navarre Creek gold property, has now increased to 32.5 sq km, and a positive feasibility study with a revenue potential of USD 836 million has already been finalized for the planned copper mine.

    Last week there was news on the operating figures. A slightly reduced loss of USD 969,250 was reported for 2021. Net assets at the Empire Mine grew from USD 13.8 million to USD 37.8 million, with a total of USD 26.1 million invested in further property development. There was still USD 13 million in cash on the balance sheet at the end of the year and no debt. Management has slightly increased its stake in the Company by exercising warrants. The stock is now listed on the OTCQX board in the US and has gained a whopping 30% since mid-March. Despite the Ukraine crisis, the Idaho copper story is running like hotcakes with the immanent copper shortage in the market. Get in!

    Jinko Solar versus Nordex - Which GreenTech stock to prefer now?

    The GreenTech specialists JinkoSolar and Nordex are regularly on our radar. Both companies have now published their annual figures for 2021, and we take a brief look at how the companies have developed fundamentally.

    Jinko reported its 2021 numbers on March 23, and on the revenue side, the Company posted CNY 40.8 billion, up from a lower CNY 35.3 billion last year, a healthy 15.5% increase. Earnings per share for the full year were CNY 10.84. The Company reported a net income of CNY 21.51 per share in the previous year. While sales disappointed, earnings were in line with expectations. The stock came under pressure and lost about 10% to EUR 44.8 by yesterday but recovered strongly to over EUR 47.50.

    Nordex's management has become cautious because of the problematic supply chain issue. According to Group CEO Jose Luis Blanco, the wind turbine manufacturer will post a loss in the current fiscal year. In 2021, Nordex reported a net loss of EUR 230 million after a minus of EUR 130 million the year before. The first quarter will be weak but has already been factored in. Hopes rest on a general easing in the second half of the year. The Group is trying to pass on the increased costs for energy, raw materials and transport to customers and is slowly meeting with understanding.

    However, the global impact of the Ukraine crisis is hardly foreseeable. Nordex is currently trying to relocate projects in Ukraine which have not yet been started to other countries. However, the indirect consequences of the war are serious. These include, for example, the effects of high steel and logistics prices, and Russian shipping companies are now being dispensed with altogether. In the current year, Nordex is aiming to at least match the previous year's results in terms of sales and returns. Revenues are expected to be between EUR 5.4 billion and EUR 6.0 billion, with a narrow EBITDA margin of 3.5%, which is expected to rise to 8% in the long term.

    Chart-wise, we give the Nordex share preference at EUR 15.7, but fundamentally JinkoSolar looks better. Both companies are hanging on the same theme: a shortage of raw materials and high costs! In the current environment, volatility will remain high.


    High-tech manufacturers are suffering from high raw material and logistics costs. If interest rates continue to rise, public sector investments could also come under pressure. The real economic effects of the Ukraine crisis are not even calculable at the moment. Varta, JinkoSolar and Nordex are all dependent on a stable growth environment. Phoenix Copper can shine in this environment with its demonstrated results and continues its projects with a filled cash box.


    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") currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a "Transaction"). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
    In this respect, there is a concrete conflict of interest in the reporting on the companies.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
    For this reason, there is also a concrete conflict of interest.
    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    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



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