The wind remains rough on the stock markets. Only a few scale stocks can hold their ground; the topic of the hour is supply bottlenecks. One rising star is the biotech company Formycon - with a price increase of 26 percent since the beginning of the year.
14 June 2022. FRANKFURT (Börse Frankfurt). High inflation, the threat of recession, a U-turn by central banks and faltering supply chains - the scale segment has also been affected. The Scale All Share has once again lost ground compared to the previous month. On Tuesday morning, the index, which tracks all Scale members, is at 1,594 points, down from 1,618 points a month ago. The Scale 30 selection index currently stands at 1,297 points, down from 1,365 in mid-May.
Biotech stock Fomycon pulls away
But there are exceptions: Biotech company Formycon (DE000A1EWVY8) is one of them. The share price has risen from around 58 euros at the beginning of January to 73 euros, and at its recent all-time high it was as high as 82.70 euros. The company, based in Martinsried near Munich, develops biosimilars, i.e. low-cost biopharmaceutical follow-on products. The first product, FYB201, is due to be approved in the USA and Europe shortly, and the British Medicines Agency has already given its OK.
Formycon is very optimistic about the future: "With the anticipated commercialization launch of FYB201 later this year, we expect to generate the first commercialization revenues, laying the foundation for sustainable growth and accelerated execution of our growth strategy," CFO Nicolas Combé said when presenting the 2021 figures.
Deutsche Rohstoff with share price doubling
The share price of Deutsche Rohstoff AG (DE000A0XYG76) also continues to climb to new heights. It now costs 32 euros, compared with just under 16 euros a year ago. For the current year, the Management Board expects a further significant jump in sales and Ebitda; the first quarter already went very well. The Mannheim-based company identifies, develops and sells raw material deposits in North America, Australia and Europe, focusing on oil and gas deposits in the USA.
Over a twelve-month period, Deutsche Rohstoff AG now has the best share price performance of all the scale members. Following in second to sixth place are the shipping company Ernst Russ (DE000A161077), the Hamburg-based media group Edel SE (DE0005649503), Beta Systems Software (DE000A2BPP88), the financial investor for commercial real estate Publity (DE0006972508) and Formycon.
2G stock split coming
At least the share of 2G Energy (DE000A0HL8N9) has held more or less constant. It is currently trading at 100 euros, at the end of 2021 it was 105 euros. The combined heat and power plant provider is actually considered a beneficiary of the energy transition: Its plants, which run on natural gas, operate efficiently and can also be converted to hydrogen and biogas. However, the Ukraine war and supply chain problems are causing the company some problems.
At the Annual General Meeting on June 3, the proposed stock split was approved. This is to be carried out by means of a capital increase and the issue of new shares. Three additional shares will then be issued for each old share. The share price will fall accordingly. 2G will provide further information on the implementation date.
Veganz: Sad parallel to Beyond Meat and Oatly
Things are not going so well for Veganz, according to its own information the "only multi-category supplier of vegan food in Europe". The company, founded in Berlin in 2011, was supposed to benefit from the trend toward vegan nutrition. However, the share price has collapsed and is currently trading at just 16.50 euros. The issue price at the IPO in November 2021 was 87 euros. Veganz is also suffering from disrupted supply chains and the Ukraine war, with sales in the first quarter falling significantly. It has been "almost impossible" to launch new Veganz products in stores or run promotions in the discount sector, it said. Food retailers had focused entirely on ensuring basic supplies, it said.
For the full year 2022, the company expects a slight decline in sales and a slightly lower Ebitda. "A nice story does not make a good investment," commented Wirtschaftswoche, referring to the equally disappointing performance of Beyond Meat (US08862E1091), the U.S. supplier of meat substitutes, and Oatly (US67421J1088), the Swedish supplier of dairy substitutes.
Nabaltec: More e-cars, more demand
Nabaltec could also benefit from the energy transition. After all, the company produces - among other things - flame-retardant fillers and specialty oxides that are used in electric cars (see "Three questions to"). Despite recent gains, the share has been in negative territory since the beginning of the year, currently trading at 28.50 euros, down from 36 euros at the beginning of January.
In the opinion of Hauck und Aufhäuser, this is far too little; the analysts recommend buying the stock and name a price target of EUR 42. They believe that the trend towards electric mobility will boost Nabaltec's growth and earnings in the medium term. In the short term, however, supply bottlenecks, which are currently slowing down electric car production, still stand in the way. Baader Bank also sees further upside potential and recommends a buy, but has lowered its price target from EUR 39 to EUR 33.
Further recommendations for scale shares
Analyst/Bank | Scale-Company | Recommendation | target price in Euro | current price in Euro |
GBC | Deutsche Grundstücksauktionen | Buy | 29,65 | 22,90 |
SMC Research | Daldrup & Söhne | Buy | 6,70 | 5,42 |
SMC Research | Lloyd Fonds | Buy | 17,00 | 9,28 |
GSC Research | EQS | Buy | 41,50 | 29,10 |
GBC | EQS | Buy | 48,00 | 29,10 |
SMC Research | 2G Energy | Buy | 140,00 | 100,00 |
First Berlin | 2G Energy | Add | 123,00 | 100,00 |
GBC | Media and Games Invest | Buy | 9,40 | 2,94 |
First Berlin | Media and Games Invest | Buy | 8,20 | 2,94 |
First Berlin | Deutsche Rohstoff | Kaufen | 43,00 | 32,20 |
Nabaltec's share has performed extremely well since mid-2020, but this year it has weakened despite very good figures for 2021 and also for the first quarter of 2022. How do you explain this trend?
Nabaltec's performance should actually speak for an improvement in the share price. However, the capital market is highly unsettled due to the Russia-Ukraine war and the associated geopolitical upheavals, and many capital investors then flee from small cap investments and rather more illiquid stocks.
For which of your two product segments "Functional Fillers" and "Specialty Oxides" or for which product do you see the greatest potential?
Basically, our entire product portfolio shows a very solid development. However, boehmite from the "Functional Fillers" product segment stands out particularly. As a coating material in the separator film for lithium-ion batteries, here above all for electromobility, it promises particular growth potential. The European Commission's recent decision to ban the internal combustion engine in Europe by 2035 gives the whole thing a further boost.
From an investor's point of view: What speaks in favor of your share?
A balanced product portfolio with innovative, promising and high-margin products in the areas of halogen-free flame retardants and electromobility lead us to expect strong organic growth for the company in the future. Coupled with the target of a sustainable double-digit EBIT margin, we continue to see great potential here for increasing the value of the company. The analysts' forecasts underscore this.
Nabaltec AG, headquartered in Schwandorf in eastern Bavaria, is a specialty chemicals group and develops, produces and sells highly specialized products in two segments: "Functional Fillers" and "Specialty Oxides". Its products include environmentally friendly, flame-retardant fillers - for example, for cables in tunnels, airports, high-rise buildings and electronic equipment - and functional additives for the plastics industry. Nabaltec produces in Germany and the USA.
by Anna-Maria Borse
© 14 June 2022, Deutsche Börse AG
Heckmann
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
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