December 7th, 2022 | 09:45 CET
Volkswagen, Altech Advanced Materials, NIO: Where does the starting signal come from?
Table of contents:
Volkswagen: Solid, but...
The Volkswagen share lost almost 18% of its value over the course of a year. Yet the Company itself is not doing badly at all. Volkswagen has mastered the shift to e-cars better than many of its competitors. Anyone who sees an e-car from VW on the road today will recognize a clear design language. Moreover, the e-cars from Wolfsburg are everywhere. Nevertheless, the Company is struggling with the situation in Germany. The country is in danger of being left behind internationally if the funding practice in Germany, which is often perceived as sluggish, is not accelerated. While Asia has been going full throttle on GreenTech for years, the US is now also chipping in with billions in subsidies and is openly opposing China with its trade policy.
Does this affect Volkswagen's situation? While smaller companies from the German SME sector suffer from the general conditions in Germany, corporations like VW have every opportunity. Only recently, they spoke out in favor of their battery cell factory in Canada, seeing "attractive framework conditions in the country." Canada's southern neighbors are also seen as crisis winners and potential migration destinations for companies from the German SME sector. Globally active companies have every opportunity to benefit from the competition for good framework conditions for investments in future technology. In addition, a rich cash flow and the proceeds from the Porsche IPO will set the course for the future. The attractive dividend yield of slightly less than 5% also makes the stock appealing to conservative investors. However, the ongoing supply bottlenecks and the business with China must be considered a risk.
Altech Advanced Materials: Exciting battery projects and strong partnerships
One company that has many good ideas and several tangible products to offer around the electrification of the economy is Altech Advanced Materials. The Company is currently developing a pilot plant in Schwarze Pumpe, Saxony. It will produce both anode material for batteries in e-cars and advanced solid-state batteries for energy storage. While the anode material should be suitable for maintaining the capacity of corresponding batteries for longer and ultimately producing more efficient energy storage systems, the solid-state business scores with its great independence from supply chains. "From this "ingredients list" alone, it can be deduced that the supply of basic materials will not play a major role in our new business field compared to cobalt, lithium or copper in the lithium-ion battery. The target group for our battery will initially be industry. Overall, however, the future field of application is vast as individual modules of 10kW each can be flexibly connected to form storage systems or be used independently in private households," Director Uwe Ahrens explained in an interview a few weeks ago.
Although Altech Advanced Materials is a German company, it also has business units in Malaysia and a subsidiary company in Australia. Altech thus combines the agility of a German medium-sized company with the internationality of large companies. "Our plant in Malaysia is currently under construction and will produce high-purity aluminum oxide (99.99%), i.e. the raw material for the planned plant in Germany. However, such high-purity aluminum oxide can be used in many areas, which is why the plant in Malaysia can be operated autonomously. Typical applications include semiconductors, medical technology and sapphire glass," says Ahrens. There are also business relationships with SGL Carbon and the Spanish silicon manufacturer Ferroglobe. Today, Wednesday, December 7, Altech director Ahrens will present live at the 5th IIF - International Investment Forum. Interested investors will receive first-hand information about a promising title that is not yet on everyone's lips.
NIO: Ambitious plans, but what is next?
In contrast, the Chinese e-car startup NIO is much better known than Altech Advanced Materials. The Chinese company wants to score points with a battery exchange service that saves users long charging times - the battery is simply exchanged, similar to a tire change in Formula 1. As a Chinese company, NIO should have far fewer problems with having the necessary raw materials up its sleeve for future expansion. However, the share price increase of around 25% in just one week belies the fact that the world is facing a wave of regionalization and that it is by no means impossible that Chinese raw materials from non-sustainable sources will be subject to special taxes abroad in the future. Although the market is currently focusing on possible Corona relaxations in the wake of the protests in China, this does not necessarily mean a liberating blow for Chinese companies. Those who acknowledge geopolitical tensions as a risk may consider whether the recent hype around China stocks is an opportunity to reallocate risk.
While companies dependent on Chinese commodities are facing a turning point that is not yet adequately priced in, companies like VW can position themselves globally and cover their commodity needs from ESG-compliant sources. However, Volkswagen is not entirely without risk due to its dependence on the Chinese market. While the share of Altech Advanced Materials must also be considered speculative, its future reliance on critical raw materials is likely to be among the lowest. The Company is an internationally well-connected small cap with corresponding growth potential.
Conflict of interest
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