17/05/22 11:07:00

Scale market report: Dry spell for the time being

17 May 2022. FRANKFURT (Börse Frankfurt).

Many scale shares are also currently suffering from the leaden mood on the stock markets. The Ukraine war, rising interest rates and recession fears are weighing on prices. The Scale All Share index is still up 62 percent over the past two years. But on Tuesday morning, the index, which tracks all Scale members, was only at 1,618 points - a month ago it was 1,761 points. The Scale 30 selection index currently stands at 1,365 points, down from 1,464 in mid-April.

Setback at 2G

Even the cogeneration plant provider 2G Energy, a favorite of "green" investors, is currently showing signs of weakness: After reaching an all-time high of 130 euros in April, the share price - incidentally the highest-turnover share in the Scale segment (see "2G as sales leader") - is now only 102.60 euros. Yet 2G had reported good figures for 2021 and recently also a very strong order intake for the first quarter. This is because 2G products can be used to reduce energy costs. 2G is also considered to be well positioned in the hydrogen sector. In April, 2G received its first order from a U.S. company for a hydrogen-fueled CHP plant.

Meanwhile, 2G Energy (DE000A0HL8N9) has announced a stock split. The split is to be voted on at the annual general meeting scheduled for June 3. The split is to take place via 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. The idea behind this: 2G hopes to make its own shares even more attractive, especially for private investors - and to further increase liquidity in stock market trading.

2G as scale sales leader

2G Energy is also popular on the stock market, or at least much noticed. In any case, the 2G share was the highest-turnover scale stock on the German stock exchange (Xetra and Börse Frankfurt) in the first four months of this year. Mynaric, Deutsche Rohstoff AG, Cliq Digital, Data Group and Ernst Russ AG also recorded high turnover.

Bucking the trend: Deutsche Rohstoff rises and rises

One of the few share price winners this year is Deutsche Rohstoff AG (DE000A0XYG76). The Mannheim-based company identifies, develops and sells raw material deposits in North America, Australia and Europe. The focus is on the development of oil and gas deposits in the USA. For the current year, the management board expects a significant jump in sales and earnings.

The share is now trading at 27.50 euros, up from 20.30 euros at the end of 2021. Incidentally, Thomas Gutschlag, CEO of Deutsche Rohstoff AG, does not see his business model in jeopardy: in a recent interview with the Mannheimer Morgen newspaper, he warned against illusions about the switch from fossil to renewable energy. "The world currently consumes around 100 million barrels of oil per day. That is a gigantic amount. If you want to replace that with renewables, you need not years, but decades."

On a twelve-month view, Deutsche Rohstoff AG currently has the second-best performance, with only Reederei Ernst Russ AG (DE000A161077) doing better. Deutsche Rohstoff AG is followed by Hamburg-based media group Edel SE (DE0005649503), financial services provider JDC Group (DE000A0B9N37) and manufacturer of high-tech milling machines Datron AG (DE000A0V9LA7).

Another newcomer to the segment

Since May 3, the Scale segment has another new member in Engel & Völkers Digital Invest AG (DE000A3DD6W5). The first Xetra price of the share was 13.97 euros, currently it is 9.32 euros. Engel & Völkers Digital Invest AG is a license partner of the well-known real estate broker and is a crowdinvesting platform for real estate.Advanced Blockchain (DE000A0M93V6), Pyrum Innovations (DE000A2G8ZX8) and Beaconsmind (CH0451123589) had already joined the scale segment in March and April.

"2G very well positioned for accelerated energy transition"

Incidentally, many analysts believe that 2G's valuation is now too low. The analyst firm First Berlin Equity Research had already confirmed its "Add" recommendation for 2G in April, with a price target of 123 euros. "High natural gas prices and the threat of an interruption in gas imports from Russia make highly efficient and thus primary energy-saving combined heat and power (CHP) plants attractive," it said. With its wide range of CHP plants, 2G is very well positioned to participate in the accelerated energy transition, it added. This is because, in addition to natural gas, 2G plants could also be operated with lean gases or hydrogen. Pareto Securities had previously advised a buy with a price target of 145 euros, while Metzler Capital Markets and SMC Research also recommend a buy with price targets of 134 and 140 euros.

"mVise on the right track"

In recent weeks, there have been many more buy recommendations for scale stocks, including artec, Blue Cap, Naga and Cliq Digital. SMC Research also currently sees very high upside potential for the IT service provider mVISE stock (see interview) and cites a price target of 3 euros (currently 1.23). Accordingly, the analysts confirm their "buy" rating, albeit "speculative buy". mVISE closed the last fiscal year with a decline in sales, but with a significant improvement in earnings. The company is also on track for the current year and has recently reported strong operating momentum and progress in several important areas.

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